Entering the market in the US

What to expect in the US?

Bootcamps and peer learning: Thanks to the high demand, internationalization camps in the US can be enriched with group activities. Participants benefit from individualized support services as well as network effects and peer learning.

Swissnex in Boston and New York offer a joint virtual start-up Bootcamp several times a year. The Bootcamp gives start-ups a unique opportunity to understand the fundamental business processes in the US and acquire new contacts prior to their travels so they can make more efficient and productive use of their time when they visit the US East Coast in person.

Swissnex in San Francisco offers a 2-week in-person start-up Bootcamp several times a year with toolbox sessions, fireside chats, networking events, a demo night, and more. This unique opportunity gives start-ups strategic advice to internationalise, as well as visibility and a home base to succeed in the US.

Network: Over the course of the past 20 years, Swissnex has built up strong connections to local research, education, and innovation actors. Swiss start-ups will benefit from this extensive network and can meet with potential partners, customers, experts, employees, and investors.

Diversity: To promote their entry into the US market, start-ups can choose to spend their time in Boston, New York, and/or San Francisco based on their individual needs, their technology, and the market they would like to enter with their start-up.

Learn more with Sharon Ambrosio, Entrepreneurship Program Manager at Swissnex in San Francisco

Why expand into the US?
The United States is one of the leading global markets, with ideal conditions for growing a business: a start-up-friendly culture, tons of talent, a high volume of venture capital, lots of incubators and accelerators, a unique mindset, and an entrepreneurial spirit.

What’s the US market like?
The US market is very competitive, with a high level of innovation and opportunities given the size of the country and the market.

What’s the state of innovation?
In San Francisco, the rise of Silicon Valley and the new technologies that have been developed there have disrupted many different traditional industries and business models. From banks and retail giants right through to car manufacturers, numerous companies have set up offices in the region to monitor and adapt to new trends in their respective industries.

The importance of Boston’s ecosystem cannot be overstated. In fact, the density of world-renowned research and medical institutes there is unmatched, making the city and its surroundings a hotbed for life science start-ups and industry. Harvard and the Massachusetts Institute of Technology are the prime actors in the ecosystem.

New York is the most culturally diverse and cosmopolitan city in the US. This is a strength not only through the myriad of perspectives people in the city have to offer but also because it enhances entrepreneurial thinking. New York City’s urban ecosystem benefits from a diverse range of stakeholders which create and promote innovation and entrepreneurship. New York City is therefore the second highest performing start-up ecosystem in the world in 2022 with over 9,000 start-ups.

How easy is it to find qualified employees and partners?
In San Francisco, the Silicon Valley attracts some of the best talent in the world, and universities like Stanford and UC Berkeley strengthen the existing talent pool yet further. It’s relatively easy to find people with entrepreneurial experience. That said, because of the standards set by companies like Google, salaries are high and the best workers expect to be paid well.

In Boston, the dynamic is similar. There’s a high availability of qualified workers, especially with an academic background. But there are also a large number of corporations hiring, with all of the big names in the pharmaceutical industry located in the region. So turnover is relatively high, as are the wages.

New York attracts some of the brightest minds from around the world. Over 36% of people who live in New York City are not from the US. New York’s workforce consists of highly skilled and well-educated individuals. As a result, the New York City employment market is highly competitive and full of qualified candidates. With over 120 schools and universities, the city doesn’t just attract but produces top talent. Its academic institutions have a long history of supporting innovation and entrepreneurship.

What are the advantages of the United States?
Three of the top five global start-up ecosystems – San Francisco, New York and Boston – are located in the United States. The US clearly offers excellent conditions for entrepreneurs and investors. With a GDP of USD 23.0 trillion, the country is by far the world’s largest economy. This means it has strong purchasing power and financial and human capital, making for a highly lucrative start-up ecosystem.

What opportunities do Boston, New York and San Francisco offer?
The Boston area is known for its globally famous institutions, such as Harvard University and the Massachusetts Institute of Technology (MIT). These prestigious universities make the city a hub of research and academic excellence, especially in the fields of biotechnology and medical technology. The city also has a growing presence of CleanTech. In general, the Boston area is a great hub for start-ups, and benefits from a big presence of venture capital.

Population density and diversity remain the most important upsides to New York’s start-up scene. New York is well-connected to the rest of the world and has a strong talent base with a large amount of foreign-born talent. New York is known for a wide range of industries including Adtech, Advanced Manufacturing, AR/VR, Blockchain, Cybersecurity, Enterprise, Food, Fintech, Health and Life Sciences, Media, and Real Estate. In recent years, New York City has also firmly established itself among the community of global urban leaders in sustainability, and is today seeing a push towards decarbonizing its building stock. Innovation and entrepreneurship is supported by local government agencies, accelerators, and the private sector, making New York a leading hub for innovation.

In San Francisco, the Silicon Valley is home to some of the world’s largest tech companies and a place of pilgrimage for start-ups from a variety of industries. The San Francisco Bay Area is the place to be when it comes to innovation, global scale and growth mindset. The Bay Area is the cradle of disruptive visions for the future, with a rich ecosystem of local and international professionals who are building the next generation of global products and services. It has a high concentration of financial and human capital and corporations, offering a unique opportunity for start-ups.

What are the challenges?
The US market is truly regarded as a land of opportunity, especially in terms of venture capital. But while it’s true the investment in start-ups is vast, it can sometimes be difficult for Swiss start-ups to gain access to funding as the market is very competitive with investors who prefer locally incorporated ventures.

Regulations are also complex, and founders have to scale high barriers to enter the market, whether in terms of taxation, incorporation and/or immigration. This complexity is even greater for life sciences companies, which need to obtain regulatory approval from the Food and Drug Administration and negotiate reimbursements with health authorities. The Swiss parliament’s motion to accept medical devices with FDA approval is set to strengthen Swiss-US collaboration and keep the Swiss MedTech industry at the forefront of innovation.

It’s important to understand the US is not just one large, homogenous market. Rather, it’s a patchwork of smaller local markets with different regulations, business cultures, and consumer tastes. That’s why start-ups will need a localization-specific market entry strategy for each region. Expanding into the US market means competing with established brands that already have brand identification and established customer loyalties among US audiences. In the US business environment, there’s also fierce competition from other start-ups as well as more established brands. To successfully compete, product differentiation and effective positioning are key. Foreign start-ups should also expect to navigate the differences in business and cultural practices as they expand abroad.