Many New Zealand companies are entering the US market with naivete, says Catherine Robinson, director of Kiwi Landing Pad (KLP) in San Francisco.
"There are a lot of companies arriving that are quite naive to how things work here. I still hear people telling me that they have just gotten here and they were driving down and knocking on venture capitalist doors. There are so many better ways to raise investment here.
"Companies should get straight into the business side of things. They have to build sales pipelines and reseller networks, and investments become a natural part of that conversation. Coming here from New Zealand, thinking that you are the next big tech company and everyone will buy in once they hear your idea is the sort of naivete I see a lot of," says Catherine Robinson, director of Kiwi Landing Pad (KLP) in San Francisco.
Robinson states that businesses from the country are often reluctant to get to the chase in the new market. Kiwi firms have to adapt to the bigger market, learn to sell hard, turn every coffee meeting into a pitch and focus less on talking about the New Zealand lifestyle.
"The biggest challenge confronting NZ firms is their lack of understanding of the market. Kiwis are good travellers but we tend to have a tourist-look of the American market. Firms have to get over that and understand that the market is a lot deeper and richer underneath the shiny surface," states Robinson.
"Product differentiation and speed to market are factors for NZ tech companies that are much more important than focusing on NZ's small size. Silicon Valley has long recognised that innovation comes from small start ups - small and scrappy start ups that could be located anywhere in the world.
"The more focused NZ tech companies become at communicating what is unique and new about their innovation and the size of the addressable market, the more successes we will see from our technology sector," she adds.
Robinson advices tech companies from the country to approach the US market as early as possible in their evolution, adding quickly that the specific timing could vary from company-to-company based on their idea and the maturity of the sales and marketing plan. Companies should also keep in mind that the US government is more bureaucratic than the New Zealand one, and things may take time to get set up and running.
Nearly 60 per cent of the Kiwi firms that approach KLP tend to be from Auckland, while other cities that contribute a fair share include Wellington, Christchurch and Dunedin.
"The primary reason for Auckland to dominate is the pure population size of the city and density of resources available. The Bay Area just has the highest density of founders and funders, and I think Auckland purely because of population base displays a similar sense of density," Robinson says.
KLP, which helps New Zealand tech businesses set up shop and address the market by providing space, advice and connectivity to the tech network in the US west coast, supports a set of resident firms at its office and plays host to a large number of short-term visitors from companies, and these numbers are growing.
Though the organisation has a network that extends beyond the west coast, Robinson believes that the Bay Area itself offers huge potential for the right Kiwi firms.
"With a GDP of $5 billion, a population of 8 million, a time zone that is relatively sympathetic to NZ (for about half the year we are only 3 hours apart) and direct flights daily from NZ, for most Kiwi tech companies it should be the first port of call, even if it is just to accurately ascertain the best place in the US for the business to be."
Robinson was a speaker at the recently concluded Canterbury Software Summit 2013. Her speech was delivered as a live feed to the audience at Christchurch.