Eight years ago, Amcham Finland establish a program to better support Finnish companies enter the U.S. market. At that time, the idea of successfully doing business in the United States was a dream for most executives of the companies we spoke to.
There was a tremendous amount of trepidation as the memories of past failures from larger more well-known companies were still fresh in their minds. Yet, a few brave ambitious executives decided to take the leap all the way across the Atlantic to the American market. Those brave souls began paving the way for dozens of Finnish companies of all sizes and across a variety of industries to follow in their footsteps.
We have had the privilege to work with great companies over this time and witness first-hand the success they have achieved and collectively have learned what are the keys to their success. Nowadays the American market is seen as more approachable by Finnish companies and the opportunities there are unlimited.
What makes the American economy unique?
Before diving into the lessons learned from these successful ventures, let us first understand what makes the American economy unique and attractive. At the most fundamental level it is the scale and scope of the industries that are present in the country. The fact that you can reach markets of such grand size that operate under one language, currency, set of laws and regulations is highly attractive to growth-oriented businesses.
When most of us think of American companies we think of companies like Apple, Google and Boeing just to name a few. But it is important to recognize that 99 percent of businesses in the U.S. are categorized as small businesses. These companies have created approximately 60 percent of the new jobs over the past two decades and employ roughly half of America’s private sector workforce (Commerce, 2021). These businesses also operate across all industries and represent a potential customer base measured in the thousands for most companies selling their products and services into the United States. As we like to say, “there are riches in the niches!”
5 key factors that drive success
Let us now take a closer look at the specific actions undertaking by these companies who have successfully entered the American markets and focus on those that led to their positive results. In doing so, I will outline five key factors that drive the success of Finnish companies in the United States.
Full ownership of developing the market
The most successful companies are those that take full ownership of developing the market. Companies who send key executives to the United States to meet and speak with their potential customers are better positioned to succeed versus those companies who outsource this responsibility to contractors, agents, distributors, or other company outsiders.
It is imperative to establish a dialogue with the market to better understand its needs and the competitive forces you will be facing when entering. We have seen on a majority of cases that the Finnish companies will ultimately have to make some changes to its strategy and/or product offering to better serve its intended market. I these meetings you are also building relationships with the market. As a foreign company you must understand that the U.S. customer may initially see risks in doing business with you. By being present you will eventually remove that feeling of risk and make your U.S. customer more comfortable in purchasing your offering.
A local office
A natural next step for these companies has been the establishment of a local office. American customers can be demanding as it is a very customer centric market. You often here in the U.S. sayings like, “the customer is always right.” I know for many Finns that is difficult to accept at times. Beyond that, most Americans expect that they receive prompt customer service when needed.
The level of support you provided is often a function of the competition you are facing and chances are there be some degree of competition. Therefore, having a local office that is responsive during American working hours is critical. Employing locals who can speak with current and prospective customers is also extremely important. The first two employees of a successful Finnish company in the U.S. consists of a key executive from the Finnish parent, presumably the one who conducted the initial customer meetings and the second employee being an experienced business development professional from the U.S.
The values of the parent company
Why is it important to have a key executive from the Finnish company establishing the U.S. operations I am often asked? In addition to the obvious reasons from decision making capacity to ease of communications with the headquarters, I believe that it is important to ensure that the values of the parent company are established at the U.S. subsidiary company from the very beginning.
Currently, the U.S. labor market is very tight and given demographic forecasts it will remain tight for many years to come. I believe Finnish companies have something unique to offer American workers; the opportunity to work for a company with Finnish values and benefits that offer a more healthy work life balance than one would get from most any American company. Americans are increasingly placing a higher value on things like parental time off work than salary for example. Finnish companies can more easily implement and offer these benefits which will help them attract high quality candidates in a tight labor market.
We have seen that Finnish ingenuity is well received by the American market. American companies are facing unprecedented labor shortages and increasing costs of doing business. Numerous Finish companies provide their U.S. customers with technologically driven products and services that greatly increase efficiencies in their day-to-day operations.
More importantly they help their customers maintain their competitive positions in the market. These Finnish companies are benefitting from the mega trends of ecommerce growth and the onshoring of manufacturing and industrial processes. We still see many opportunities for Finnish companies across a wide range of industries.
Invest in relationships
Finnish innovation often opens the door to opportunities in the U.S., but at the end of the day it’s the people involved who finalize the deals and consummate the relationships. It is for these reasons that Finnish companies have exceled in the United States. Finnish companies have a wonderful reputation of fairness, honesty, and reliability in dealing with their U.S. customers and partners.
So it should be of no surprise that according to Amcham Finland’s 2022 Transatlantic Economy Report, the U.S. market is now the second largest for Finnish goods and services and the fastest growing market as well. We are still in the early stages of Finnish success in the United States. There are still numerous technologies being born in Finland by smart and ambitious teams and they will someday find a home in the U.S.
Mike Klyszeiko is a Silicon Valley native with prior work experience in technology and finance before moving to Finland. He is the founder of Amcham Finland’s Launchpad USA program which has assisted over 100 Finnish and other EU based companies entering the U.S. market since its inception in 2014. Mike is based in Helsinki with his Finnish wife and young son.