The truth about expanding your tech business to the USA: part 2

Lee Evans, November 28, 2017 4 min read

This article was originally posted on the Tech North website.

Lee Evans is CEO at SurveyMe, a Manchester-based mobile feedback and rewards app software company started by he and his wife, Nicola, from the bedroom of their home in Bramhall five years ago.

In 2016, SurveyMe expanded to open its first US office in Southern California. It now employs more people in the USA than the UK ,and gathers real-time feedback from a network of moviegoers in over 2,800 movie theatres across all 50 US states and Canada.

Read part 1 of this article for the story of how SurveyMe expanded from the North of England to open an office in California.

In this part, I’m going to address some of the myths about doing business in the USA.

Myth 1: People take fewer holidays in the US

Now, I can only speak for an early stage tech company and for California state but while this statement is broadly true. When it comes to the actual difference between ‘holiday’ time in the UK and California, there’s not that much difference. That’s really because the devil in is the detail of Californian labour law.

For example, it’s mandatory to have a paid sick leave policy – usually 24 hours per year. The reality is all employees will take all 24 hours (or three days) in the year and that’s tacitly understood and accepted.

Where the perception perpetuates from is that British people tend to take blocks of weeks’ vacation whereas American employees are far more likely to take three- and four-day weekends that usually coincide with a National Holiday. But ultimately there isn’t much difference.

Again, Californian Labour law distinguishes between ‘exempt’ and ‘non-exempt’ full-time employees. This difference is broadly split by salary levels and whether they manage people and/or are office-based. Exempt employees are not entitled to overtime whereas non-exempt employees must be paid overtime and must take breaks during normal office hours.

Myth 2: Hiring and firing is easier in the US

At SurveyMe, last month we had over 150 applicants for one job opening. That was quite astonishing. We are neither a large employer nor that well-known as a company, but what we’ve done is work very hard to cultivate a great environment to work in. And word has spread from there. Going back to 18 months ago, it was very different.

California has what’s termed as ‘at will’ firing. Ostensibly, it means you can instantly fire someone without giving notice or reason. Superficially, that’s correct. However, practically firing an employee rarely happens that way because of the heightened risk of a lawsuit.

Similarly, it’s a double-edged sword because employees can simply announce one day they are leaving at the end of that day. That actually happens far more frequently than someone being fired on the spot. As a business owner it means you have to be far more flexible in terms of managing business continuity.

Myth 3: The USA is one huge single market

Technically by its definition it is one ‘United’ marketplace. In reality, however, depending on what, where, and how you sell your services plus who and where you employ people it is anything but a ‘United’ tax regime.

State taxes, especially employment and profit taxes, can vary significantly between each state. Unlike the United Kingdom, for example, to operate out of California and also employ people in Colorado requires you to register for state employment taxes and payroll in both states.

Myth 4: Americans speak ‘English’

The reality is that we barely speak the same language. I’m not talking how we pronounce tomato or potato or every day items like the difference between a tap and a faucet (they’re the same thing). The reality is that US and UK business cultures have surprisingly little in common.

As I’ve noted above US culture is far more direct. On the West Coast, it can also seem far ‘flakier’ too. Yes, ‘flakiness’ is a real, recognised concept in California. A good example is the difference between what constitutes a meeting having been arranged.

In Manchester, “let’s meet on Friday at 11am” means both parties intend to be there at 11am on Friday. In Souther California, “let’s meet up” means nothing is agreed. Likewise “let’s meet on Friday at 11am in Newport Beach” does not mean a meeting is agreed and arranged. The only time a meeting becomes anywhere near agreed is if it’s accepted as a calendar invitation.

Culturally, even with a calendar acceptance, it’s also acceptable even at this point for meetings to be rescheduled within 24 hours of the agreed time and place.

Myth 5: They’ll love your British accent

Well this is partly true. Americans do tend to like the British accent a lot, but that’s largely confined to social occasions. Southern Californian Americans are typically very friendly and welcoming, which certainly helps making friendships easier. In the business environment, in terms of getting meetings, particularly with those large companies your business plan might depend up, your British accent counts for very little.

The reality is, as with many cultures, getting meetings is about who you know and what you can do from them in return. It’s a case of being known, liked and trusted. Short of making the right hiring decisions, that means you will need to be patient, focused and persistent without being too insistent, to get those big meetings.

Our experience has been overwhelmingly positive and while the American dream owes no one a living, there’s a great living to be made if you’re prepared to work hard at your dream in America.

Photo by frank mckenna on Unsplash

Growth, How to, scaling, Startup stories, Manchester, North West