For startups entering the automation and manufacturing market, the road ahead can be a difficult one. But those coming from Europe into the United States, that road is much bumpier, even with significant funding behind them.

In this episode, Sue Susenburger, Managing Partner at giddyUp! Innovations, explains how the company helps foreign startups enter the market with TECH B2B Marketing’s Winn Hardin. They talk about the steps that should be taken when entering the U.S. technology market, from market analysis and legal requirements to building a team and go-to-market strategy.

Additionally, Susenburger explains the pitfalls that cause many startups to fail and how they can be avoided.

Winn Hardin: [00:00:07] Hello, Everybody, and welcome to our new episode of “Manufacturing Matters,” where we cover the manufacturing trends and technology that are reshaping the global manufacturing landscape. My name is Winn Hardin, host of “Manufacturing Matters,” and I’m lucky enough to be with Sue Susenburger today. How are you doing, Sue?

Sue Susenburger: [00:00:21] Pretty good. Thank you for having me, Winn.

Winn Hardin: [00:00:23] My pleasure. Sue is the principal at Giddy Up! Innovations, and Sue and I just started working together a month or two ago. While you have been helping to bring NEURA Robotics into the North American market, an incredibly interesting German robotic company who actually is kind of the darling at automate this year. So, it’s been very, very impressive. Amazing work you’ve done.

Sue Susenburger: [00:00:43] Thank you. I appreciate that.

Winn Hardin: [00:00:44] Oh, our pleasure. All right, Sue. So, we’re here to talk about — first just tell me about Giddy Up! Innovations.

Sue Susenburger: [00:00:50] Sure. Happy to. So, we’re basically an agency that helps startups or a majority of scaleups to enter the U.S. market. That’s been the main focus. Mostly, they come from Europe, Germany. There’s also the option to do other countries, but that’s been kind of the most natural one for us to do. And we help them in three areas. It could be in the first one, really kind of exploring the U.S. market and starting with strategic corporate partnership after startups go into scaleup phase that kind of requires more of the corporate partnerships to really validate their product, to find the first partner in crime to enter the market with, and potentially through that also sales channels. So, cracking that corporate nut is like one of the, often the, first step where we assist and help them jump through the hoops. And the second one really is, once they’re kind of ready to hit the ground running, they’ll say, okay, we want to figure out which location we want to be at, we want to set up the company, there’s a whole bunch of legal things to be done, we want to build up a team, and we’re basically like a concierge service to lead them, project management them, through that process successfully. It’s very different than it runs in Germany, especially the HR or benefits aspects.

Winn Hardin: [00:02:10] Oh, yes. Absolutely. And even, you know, Canada versus the U.S. Got a lot of variations in that.

Sue Susenburger: [00:02:15] Absolutely.

Winn Hardin: [00:02:17] So, first step is finding that key corporate partner, depending on where you’re going, for possible help filling the coffers, leveraging distribution centers, and everything. Then set footprint. Right? And evaluation. What’s the next step?

Sue Susenburger: [00:02:27] Third one is really get the word out and help them to figure out what’s the go-to market strategy looking like. We kind of help them with a larger vision of that. That could be from PR to corporate communication, really coming up with an integrated marketing strategy to connect that with sales and do this in a manner that  fits the local market and also find them partners for execution, like you guys, to elevate them up and give them a successful market entry.

Winn Hardin: [00:02:57] I appreciate that. Yeah, it’s been fun working with you the last couple of months. Absolutely. And for those who don’t know, of course, “Manufacturing Matters” is also hosted by Tech B2B Marketing. I’m the principal managing director. Hey, how you doing? So, Sue, when you have a company come to you and they want to make they want to jump across the pond. They want to come into North America. Is there a certain set of steps that you’d like to walk them through initially?

Sue Susenburger: [00:03:16] Yes, absolutely. So, often I see them reaching out or wanting to start entering the U.S. market because a U.S. investor invested a substantial amount of money into them to help them kind of through that scaleup phase. So, we’re talking to those that are already startups, scaleups that have a substantial amount, like 80 or 120 million that they already have in funding. And then the investors are kind of pushing for, okay, we want to . . .

Winn Hardin: [00:03:45] Let’s crack that U.S. market.

Sue Susenburger: [00:03:46] Let’s go right there. So, I like the investors to be involved. They often have a lot of great resources that they’re not always tapping. So, I actively ask, who’s your investor? Have you, you know, thought through engaging them and having them as part of the journey? And then with us they kind of walk through, I’d say like a five-pillar process that is really part of the first setup. I would say the first half-year of work, and the first one really, is I need to make a decision on a legal entity. I’m not a lawyer. So, we work with lawyers that we recommend to the client. They choose the lawyer they want to set up the legal entity and have that right in place. The next part is there is international transfer pricing and accounting and taxes that need to be taken into consideration. So, we find a partner for them to work with that does their accounting, their taxes, and all of that. That’s an important second aspect. That goes along with setting up a bank account. U.S. big banks do not want to deal with little startups. Even the scaleup is still a small startup. So, if you walk into Bank of America and say, I have no credit score here, they’re like, yeah, thank you, but we’re not interested.

Winn Hardin: [00:05:03] Even if you’re bringing 20 million?

Sue Susenburger: [00:05:05] Yeah. They’re like, yeah, you don’t have any tax returns here yet. So we’re not really . . .

Winn Hardin: [00:05:08] Okay.

Sue Susenburger: [00:05:09] So, we have a set of bankers we work with that see that opportunity and really help walk you through it, give you a credit card even without a credit score here.

Winn Hardin: [00:05:18] Is that part of what the VC or the private equity relationships that help open those doors a little bit?

Sue Susenburger: [00:05:23] Not really. I’m surprised about that. They might have here-and-their recommendations, but it’s often a handful of local banks that specialize or have like a niche department in that area to get that set up.

Winn Hardin: [00:05:34] Beautiful. So, you can help companies find those individuals. Because that’s probably not an individual page on a Google search term. I was going to say Yellow Pages, but no one really knows what the Yellow Pages are anymore. So, we’ll move past that.

Sue Susenburger: [00:05:47] Yeah, we have a network of different partners that also speak different languages. The German might like to have another German speaking or someone from the U.K. We connect them and make sure they have guidance on all the tedious processes and have all the right documents in place. So, the third, or fourth, aspect is the whole package of HR and benefits. It blows their minds why the health insurance is not automatically paid by the government. Why you have to figure out this whole benefits package and why there are all different elements of it. It takes a lot of translating work in between to walk them through it.

Sue Susenburger: [00:06:27] And then also coming around and saying you need a competitive benefits package if you want to hire here. To have that understanding. Other conversations I spend a lot of time with is like, why are your salaries so much higher here than, for example, in Germany? And then I was like, guess what? You have like 35, 40 days off a year. Our people get only ten holidays and maybe 10 to 15 vacation days. So, you actually get more working time per employee for the additional employee costs.

Winn Hardin: [00:06:53] That’s hard to hear. That’s just hard to hear. Sorry. Someone who lives primarily in the U.S. Jealousy abounds.

Sue Susenburger: [00:07:03] When you build up a team in the U.S., you get more hours out of them than you do in Germany, right?

Winn Hardin: [00:07:07] Work, slave, work. Anyway.

Sue Susenburger: [00:07:10] A good benefits package means to have those, you know, wellness days or sick days or . . . That’s another thing they don’t understand. Why the U.S. has a volunteer day as a team? It’s actually a good thing. I like that about the culture here to think about having that as a company to offer.

Winn Hardin: [00:07:26] Yeah, yeah, yeah. We’re getting together in a few weeks actually up in Boston for that very purpose.

Sue Susenburger: [00:07:30] There you go. See, it’s a good thing. So, I have a lot of fun doing that and consulting them through the whys and what’s and how to figure that package out. And of course, last but not least, is insurance. You want to make sure liability is bridged. Is this is something they can extend on their existing insurance? Or we have partners we work with here to really put that package together. Those are kind of the foundations. We work with great partners, especially in the HR package to eventually [have] your employer handbook. You need to have good offer letters that go out in different aspects of that. And then it comes down to a hiring plan, right? So, what type of people do you need in the U.S.? What’s the organization supposed to look like? So we have an . . .

Winn Hardin: [00:08:14] An appropriate prioritization of when you’re filling those. Where do you go first? What positions do you have to fill first?

Sue Susenburger: [00:08:18] Who do you fill first? What type of talent do you need? It goes also really closely along with, where do you want to open? Your location. [Those are] always interesting discussions. There might be founders that have heard one city is amazing. We should go there. And then I was like, yeah, that’s cool, but how many travel costs do you want to pay for your people? Where do they need to go?

Winn Hardin: [00:08:41] None of your customers are there! Just might want to think about that.

Sue Susenburger: [00:08:44] Where are the salespeople located, right? Where are your customers? And then are you just like a service provider organization, which means products and everything are done in headquarters and it’s just pass-through sales? Or are you actually going to have engineering developers here.

Winn Hardin: [00:09:03] Production.

Sue Susenburger: [00:09:04] And production, which could be different locations? Let’s look at robotics, for example. The Midwest, they’re called the, you know, the Robotics Belt, kind of where all the manufacturing is going on. Now companies and robotics come here, they would look into, oh a lot of the big OEMs they are in the Detroit area or, you know, in Ohio.

Winn Hardin: [00:09:28] A little bit in the Southeast, depending on which industry you’re in or foundries in the Midwest.

Sue Susenburger: [00:09:34] So, customers might be in the Midwest but also more South. So how to set that up? Of course, there’s also California and others but . . . And then looking. Oh, you have software people. Do you need software people? Well, they’re a little harder to hire in Dayton, Ohio, or in Detroit.

Winn Hardin: [00:09:49] Yes they are. They tend to be bicoastal.

Sue Susenburger: [00:09:50] Coastal or actually Chicago, many people don’t know this. Chicago has more software and IT graduates than the three large universities, like MIT and so on, on the East Coast.

Winn Hardin: [00:10:03] No kidding.

Sue Susenburger: [00:10:03] Yeah. So, there’s a lot of great talent here, especially looking into programs like Python or similar AI capabilities there. The Midwest has, especially Chicago, has done a lot in that.

Winn Hardin: [00:10:14] I wouldn’t be surprised at the way immigration has helped in that area too because it’s expensive to live on each coast. Right. So if you were an Indian software designer or somebody who had some fantastic experience in Malaysia or wherever, I could see you wanting to come into the center to get yourself established.

Sue Susenburger: [00:10:29] And I have to say, COVID kind of contributed to that. People moved. When I talk to friends in San Francisco, they’re like, yay, rent is finally affordable because everybody moved to Austin and other places.

Winn Hardin: [00:10:41] Oh, definitely.

Sue Susenburger: [00:10:42] So, there’s really great talent to find here and to keep here in the Midwest. And it’s pretty exciting. And that goes along with the company culture. Do you want everybody to come into the office or work remote? And how do you create a good remote working culture? I could talk with you all day about this.

Winn Hardin: [00:10:58] That’s good. Well, you should because that’s your job. This is what you do. That’s what you’re passionate about.

Sue Susenburger: [00:11:03] Then figuring out what’s your functional role looking like? What’s your job description looking like? How do you organize your team and then how to set it up and bridge that with your corporate culture that you have within headquarters.

Winn Hardin: [00:11:14] So, what are the biggest barriers that come to mind, or pitfalls, that people need to be aware of when they’re thinking about coming here to North America?

Sue Susenburger: [00:11:22] The reality is there is — in either manufacturing automation, AI startups, or similar, or other industries — there is unfortunately quite a big graveyard of startups here in the U.S. that came from other countries and from the U.S. Tried to enter, put a lot of money behind it, and it was rough to make that successful. A few of the pitfalls that I have seen, and maybe the first one is to really not do enough of an analysis of the U.S. market and kind of come up with the approach “I’m trying to put onto this culture what worked for me in the area I’m coming from.” And that goes from how we approach sales, how we approach partnerships, and also how we incorporate product feedback.

Winn Hardin: [00:12:11] All the way through communication. And visibility is very different in Europe than it is in North America.

Sue Susenburger: [00:12:16] And that’s where I like to start, do almost like a roadshow and a good market study on where things are at. I often see a bit of an ignorance and, “Oh yeah, we know how to do this. We’re the best. We’ve not actually done so much competitor analysis of the U.S. market.” And then it is a little bit of an awakening when we enter. And you go to the first customer who is like, “Oh yeah, I already had five others that offer the same thing that you do. Are you aware of this?” So, there is not always that awareness.

Winn Hardin: [00:12:47] Just to be fair, that kind of lack of due diligence happens just as much with North American native companies as it does for people coming into the marketplace.

Sue Susenburger: [00:12:56] Well, they don’t have to move all kinds of, you know, functions and aspects to another country, right?

Winn Hardin: [00:13:01] Absolutely.

Sue Susenburger: [00:13:02] It makes it then so expensive.

Winn Hardin: [00:13:04] Absolutely.

Sue Susenburger: [00:13:05] I think hiring a good GM or local leader that has a mix of understanding of the American culture, but also I think it’s very beneficial to have somebody who understands headquarter culture because 50% of that leader is going to be translating why we do things differently.

Winn Hardin: [00:13:24] Back to the overseas HQ.

Sue Susenburger: [00:13:25] Right. Having them fly over and be part of like . . . Even in small startups there’s already politics, right? So, you have to build up those relationships and get your mandates and really get going. So, that’s another part. And a pitfall, no matter if you enter a new market or not, that I have been observing in scaleups. They get a lot of funding at once, which is really exciting. And then they start hiring people and typical growth pains and how do I integrate the new people in the existing team and make sure they’re successful and then almost hiring a little bit too many people at once. Too many. And then on the other hand . . .

Winn Hardin: [00:14:06] And there can be lots of different pains from that, right?

Sue Susenburger: [00:14:08] Yes.

Winn Hardin: [00:14:08] Because your organization may not be ready to onboard that many folks, and you don’t have your structures in place, but at the same time you might get over your skis, so to speak. And your costs are too high compared to what your revenue can support.

Sue Susenburger: [00:14:20] Absolutely. So, that almost slows you down a little bit. You know, you’ve got your salesforce and sales processes. You have to come to a [new] place versus [a place] where there were way more handshake agreements before and where the CEO actually went out and was the main salesperson. So, how do you duplicate that? And then another one I see is the stretch between once you start commissioning and implementation — to include that product feedback that comes from your first customers, especially in that new market, which is often different than  your headquarters’ market.

Winn Hardin: [00:14:48] Absolutely.

Sue Susenburger: [00:14:49] Have a good process and a capacity to implement that versus those people also have to continue working on new product innovation.

Winn Hardin: [00:14:57] Absolutely.

Sue Susenburger: [00:14:58] So that can sometimes then . . .

Winn Hardin: [00:14:59] Continue to listen and be able to internalize that.

Sue Susenburger: [00:15:02] Yeah. Bring that in. And unfortunately then I see often moments and this just happened in the last one or two years to quite a few startups when investors stopped dumping money at them that they’re like, oh, we’ve got to stretch the runway. We also are more in an MVP stage than we thought we were after checking in with that new market. So we have to take a step back, which often then leads into a third of the company being laid off. So, that’s a bit of . . .

Winn Hardin: [00:15:30] Which can become just a downward spiral.

Sue Susenburger: [00:15:32] Yeah, so that then becomes a spiral. So, that’s something where any scaleup is also going through a lot of change management, a lot of reorganization constantly needed there. And that’s something that we also point out and try to help guide through these aspects.

Winn Hardin: [00:15:49] So, we talked about due diligence, reports of due diligence, and proper planning, market analysis, of course, identifying key players. And really not just personas, but individuals, you know, where they are, what kind of contacts they have, how they’re going to interface back with HQ. There’s a lot of things that we can dive a lot deeper on. I get the feeling that in this very short conversation . . . Let me ask you one more last question. So, generally speaking, what’s the time frame? When, if a startup company comes here, what should they be thinking? I’ve got one year, two years, three years to get my act together? Is there a certain time point that’s critical?

Sue Susenburger: [00:16:27] Yeah, we can look at this from two aspects. And remember we talked a little bit about, oh, how long does it take for a company to almost exit from being early stage to later, including a successful market entry or sometimes not as successful. And I [participated in] a few really cool examples. I was part of being an EIR. They called me an executive in residence. The Techstars Accelerator in Berlin in 2019. So, I got to experience ten very early-stage startups in the AI field. Lots of smart brains and minds.

Winn Hardin: [00:17:02] Lord, yes.

Sue Susenburger: [00:17:03] Great, great spirit. So, two of them exited this year. So, that was five years later.

Winn Hardin: [00:17:10] Okay.

Sue Susenburger: [00:17:10] For example, Ultimate AI is a very successful company. They started in 2017. And now the exit. They also did a U.S. market entry. This wasn’t the key for them later to actually exit. That had its own challenges and parts in it.

Winn Hardin: [00:17:29] It was or was not it.

Sue Susenburger: [00:17:30] It . . . well, you could see it from different perspectives. Right? But just showing how long or short that type of long runway could be.

Winn Hardin: [00:17:38] So 5 to 7 years is the kind of time frame you’re talking about.

Sue Susenburger: [00:17:40] They had very involved investors. And through the Techstars brand, behind it was a very successful accelerator in VC. And they were able to to get faster success.

Winn Hardin: [00:17:50] Gotcha.

Sue Susenburger: [00:17:50] Now, there are different programs in the manufacturing, robotics, automation industry, and accelerators and others that help them through similar journeys. It always depends a little bit how much backing they have for that type of support.

Winn Hardin: [00:18:02] Gotcha.

Sue Susenburger: [00:18:02] Because having investment is just one thing. Having a guide through a great VC or accelerator contributes a lot to how long that runway leads. And that applies also to the U.S. market expansion, right?

Winn Hardin: [00:18:16] And they can support so many of those different business operations that new startups are not going to have. I mean, mundane things like a little bit of marketing support, possibly administrative.

Speaker3: [00:18:25] There’s very different levels for how the VC does that actually. So, sometimes they just have a good portal, and you can tap resources. Often they just refer you to an agency in the network. I think one of the reasons why we exist, or why we’re being booked, is because the VC actually does not offer that arm as extensively, which often surprises me because they put a substantial amount of money into these startups to enter the U.S. market. But then the support is . . 

Winn Hardin: [00:18:50] But not a core operation for them.

Sue Susenburger: [00:18:52] Yeah.

Winn Hardin: [00:18:52] But at least they have a list of partners. But do you actually help people identify good VCs? Do you work? Do you go to that level?

Sue Susenburger: [00:18:58] We do not do that.

Sue Susenburger: [00:18:59] Usually when they come to us, they already have a substantial set of VCs that they work with. They’re like serious VCs. Up to those 800 million.

Winn Hardin: [00:19:07] Any last thoughts you want to leave everyone before we tell them to go to GiddyUpInnovations.com and check you out further?

Sue Susenburger: [00:19:14] Yeah. I mean, we’d we’d love to meet you and discuss. We’ve had different startups or companies reach out also more traditional companies that would not themselves say we’re a startup or we have an 80 million investment from a VC. We’re happy to to give the same consulting approach to them and talk them through it. And we’ll also tell you honestly when we think it’s a bumpy road for the U.S., for the approach you’re bringing in, because there’s already a lot of you. And yeah, so happy to have a conversation and first a consulting call on it. And other than that, as you mentioned, GiddyUpInnovations.com is our website, and we can’t wait to give you a leg up to enter the U.S. market.

Winn Hardin: [00:19:56] Sue, thank you so much for sharing all this information. I know we’re going to have you back on so we can do some deeper dives on some of these individual pieces — how you go about due diligence, how you go about building the, you know, how does one develop an organization that matches the vertical they’re going into or the regional space they’re going into . . .

Speaker3: [00:20:11] Absolutely.

Winn Hardin: [00:20:12] So, look forward to a lot more conversations. It’s been a real pleasure, Sue.

Sue Susenburger: [00:20:15] Thank you, good talking with you.

Winn Hardin: [00:20:16] Thanks for coming on. Everybody. If you’ve got any questions for Sue, don’t forget go to GiddyUpInnovations.com. You can reach out to us directly, and we’ll get it to Sue for you. You can also check out our past episodes on manufacturing-matters.com. If you’d like to join us on a future episode, ping us below and find our podcast and all the major platforms that you’re using to get your information. So, until next time, have a great day!

Sue Susenburger: [00:20:40] See ya!