Doing business in the US: Executive briefing
Sunset in San Francisco
Thinking of doing business in the US? Read this
This comprehensive overview of the US economy offers valuable insights for entrepreneurs and business developers seeking nationwide expansion. Drawing upon the extensive experience of an entrepreneur who successfully acquired clients across all US states, this report provides key data points and unique perspectives on the economic landscape, diverse cultural nuances, and essential criteria for developing your go-to-market strategy.
Please note that the perspectives presented here represent one individual's experience and should be complemented with additional research and insights from diverse sources to gain a more granular understanding of the opportunities, challenges, and best practices for success in the American market. By leveraging this comprehensive knowledge base, you will be well-equipped to navigate the complexities of the US economy and make improved decisions to drive your business growth.
US Economy: A powerful Global Engine
The US economy, a $25 trillion powerhouse, is the world's largest. It has an estimated population of 340 million as of June 2024. Its stock market represents 60% of global publicly traded companies, with the "Fantastic 7" (Nvidia, Microsoft, Google, Tesla, Amazon, Apple, Meta) comprising roughly 50% of its market capitalization. These giants power our daily lives, from collaboration and AI to virtual reality, advertising, e-commerce, and the electric vehicle revolution.
Foreign investors are eager to participate in this thriving economy, with a 24% share of total investment in all other countries.
US Population distribution across its landscape:
https://youtube.com/shorts/p5DfhG_DKSk?si=l4Yji2TxDHiEYSHs
Drilling down into the States and Cities: A diverse landscape to harness
The US is a large country that offers diverse economic opportunities across its fifty states. It will take you roughly six hours to fly coast to coast by plane and a week or so to cross it by car through changing terrains and landscapes. Each state has a unique focus and economic performance, with coastal states generally leading the way. The East and West Coasts are major economic hubs, along with the powerful Texan economy.
Your business needs dictate the ideal state and city. In healthcare, Boston, the world's leading biotech hub, may be your top choice. For AI and software, while Boston remains strong, Silicon Valley's software and computing legacy might be preferable. Government-focused businesses might thrive in Washington, New York, or smaller cities with easier administrative access. Resource extraction (oil, gas, mining) ventures may favour Texas, California, or Arizona.
Cost of living and housing vary dramatically. Booming states attract more people, leading to rapid inflation in housing and other areas. Less prominent states offer greater affordability. The US maintains a migrant and settler culture, with people moving between states to find their ideal environment.
Currently, California's rising costs are prompting an exodus to states like Texas, transforming the Texan economy and driving asset values upward.
Understanding these internal dynamics is crucial when choosing where to live and work in the US.
Additional Resources to read:
US economy by states
https://www.visualcapitalist.com/us-economy-by-state/
Most profitable Industries by state
https://www.visualcapitalist.com/most-profitable-industry-u-s-state/.
Understanding the Cost of Living in the United States
Cost of living in the US can vary significantly between states. Let's use Boston as an example to illustrate typical expenses:
When budgeting and targeting your landing spot to grow your business consider these costs of doing business. While typically, a higher cost of doing business can mean better opportunities, be smart about your localisation strategy: Balancing local business development with remote or contracted can be a good and modern strategy to adopt, optimising costs.
Capitalism: Born in Europe, perfected and fully lived in the USA
Born in Europe, capitalism has found its true home in the US, showcasing its power and limitations. In essence, capitalism is about allocating capital for wealth creation: people earn, spend, invest, and grow wealth over time. The US population is closely attuned to the stock market, understanding sector and company performance. They invest in retirement funds (401k), mutual funds, stocks, bonds, commodities, etc.
Capitalism is like a casino: a thrilling game with the potential for jackpots. A $10,000 investment in Nvidia a decade ago would be worth millions today. Countless examples demonstrate the high returns possible in the US's fast-paced, ever-changing economy. It's a system that adapts rapidly, driven by businesses and entrepreneurs capitalising on problems. Investors quickly allocate funds to promising ideas, hoping for outsized returns.
Venture capital, invented by Frenchman Georges Doriot in Boston, plays a crucial role in enabling economic reinvention and democratising investment. Previously, only the wealthiest families, like the Rockefellers, invested in innovation. Today, firms like Venrock (Venture Rockefeller) continue this legacy, with early investments in Google, Facebook, and others.
Capitalism rewards those with money and insights, but not everyone has that advantage. Many Americans struggle with debt, living paycheck to paycheck, and relying on minimal social security. The US offers both immense wealth and the potential for hardship.
This abundance of opportunity, coupled with widespread financial struggles, creates a dynamic where some work hard for others, but also fosters negativity: political polarisation, civil unrest, opioid and homelessness epidemics.
The US is ideal for those seeking financial success or who have money to invest. If a low-key lifestyle is your preference, consider living and doing business elsewhere. The US remains a land of opportunity for those ready to take a leap of faith, adapt to harsh realities, and work hard within this powerful capitalist system.
Business Culture: Sophisticated, assertive, market focused.
The US, birthplace of the MBA and strategic management, is a hotbed of sophisticated business practices. Investors recognized early on that a "science of success" was needed to fuel business and wealth growth. MBAs provide the toolbox for business administration and delivering ROI.
The US also boasts a strong military history, influencing its earlier business culture. At the executive level, a conquest mindset often prevails sharp, highly trained, entrepreneurial leaders making rational, data-driven decisions. Hiring and firing happen swiftly, with the focus on business outcomes.
However, employee well-being remains important, as their voices shape a company's reputation and ability to attract talent. While the US business landscape is fiercely competitive, maintaining a positive work environment is key to sustained success.
Global force: Challenging, adapting and challenged in today’s evolving world
Born from immigration less than 400 years ago, the US was forged through hardship: liberation from English taxes, civil war, conflicts with Native Americans, famines, and notorious outlaws. This difficult history-built character, and the world would be unrecognisable without America's contributions.
Their heroism in WWII, liberating Europe from Nazi tyranny, cemented the US as a beacon of freedom and military might. For years, it reigned as the uncontested economic leader, a fact deeply ingrained in its identity.
However, the rise of China, India, and globalisation challenges this identity, creating anxieties about the US potentially losing its top position. The US remains a central global economic engine, with influential institutions shaping both domestic and international economies.
Central banks control interest rates, impacting inflation, GDP, borrowing, and investment. Understanding this complex system is crucial for conducting business in the US. While its economic dominance may be challenged, the US continues to play a pivotal and leading role in shaping the global economic landscape.
Ease of doing business: Low administrative barriers
As a young country, just 400 years old, the US embodies a youthful spirit of curiosity, boldness, and acceptance of failure. Compared to older nations like the UK or China, the US remains hopeful, constantly seeking reinvention to thrive in a changing world order. While this optimism persists, recent years have seen growing disillusionment and anger.
The US is adapting to a new reality, where sharing resources and consumers with emerging economies is crucial. Despite challenges, it remains an exceptional place for business, largely due to its entrepreneurial mindset. The belief that doing business is worthwhile and achievable is deeply ingrained.
Compared to my experiences in Europe, launching a business in the US has been remarkably easier. Accessing global talent and capital is effortless. I raised over $3 million for a venture solely through Zoom meetings, without ever physically meeting the investors. This level of trust and accessibility is uniquely American.
Bureaucracy is minimal, and setting up a business or paying taxes is straightforward and efficient. For a few hundred dollars, your business can be registered and operational, ready to generate revenue.
Sensitive Topics in the US: Freedom of speech with key exceptions…
While the US prides itself on freedom of speech, certain topics remain sensitive and often taboo in public discourse. Open discussions about politics, slavery, sex, and gun ownership are best reserved for close friends and family. These subjects can evoke strong emotions and deeply held beliefs, leading to heated debates or discomfort.
It's important to remember that cultural norms and taboos can vary significantly between states. What's acceptable conversation in one region might be considered offensive in another. For instance, discussions about gun control might be more common in urban areas with stricter gun laws, while they might be avoided in rural areas with a strong hunting culture.
In addition to the topics mentioned above, other sensitive issues that can spark polarisation include:
Religion: While the US has a diverse religious landscape, imposing personal beliefs on others or criticising their faith is generally frowned upon.
Race and ethnicity: Discussing racial issues can be complex and requires sensitivity to avoid offending others or perpetuating harmful stereotypes.
Gender and sexuality: While progress has been made towards LGBTQ+ acceptance, discrimination and prejudice still exist. Openly discussing these topics might make some people uncomfortable.
Income inequality: The growing wealth gap in the US is a contentious issue, with differing opinions on its causes and solutions.
Gun control ownership: The US constitution provides the constitutional right to own arms to allow citizens to defend themselves against any sort of aggression or oppression (even an oppressive government). Gun violence has been seen in schools and other public places which has put people on edge on the topic and rightfully created the debate on this right defined right after the US freed itself from the British empire and with the idea that if a similar situation would happen again, citizens could be equipped to fight and defend themselves.
When interacting with Americans, it's wise to be mindful of these sensitive topics and gauge the comfort level of your conversation partner before delving into them. If in doubt, it's best to err on the side of caution and avoid potentially controversial discussions.
Millionaires and billionaires: The force for reinventing in the economy
The US is home to a significant number of wealthy individuals, with California alone boasting 1.145 million millionaires and 186 billionaires. This concentration of wealth contributes to a vibrant investment landscape, fostering a thriving ecosystem of accredited business angels eager to invest in promising entrepreneurs and ideas.
These successful figures, like Elon Musk, Jeff Bezos, and the late Steve Jobs, are often idolised both nationally and globally. Their achievements inspire and influence the way business is conducted in the US. Recently, Jeff Bezos shared insights into Amazon's working culture in a two-hour podcast interview, a valuable resource for those interested in learning from one of today's most successful American billionaires.
Before Bezos, leaders like Henry Ford (Ford Motor Company) also shaped business practices with their innovative theories. The US has a rich history of influential business figures who have left a lasting impact on the global economy.
Americans traditionally speaking work hard: With cultural changes in effect…
The US boasts a wealth of talented workers, nurtured by its thriving university system that attracts global students. Emphasising critical thinking over rote memorization, the education system fosters creative problem-solvers, invaluable for launching and growing businesses. However, recent shifts in the workforce have tempered this traditional image. Some younger generations are rejecting the "9-to-5 grind" and commuting, demanding flexible work arrangements and a better work-life balance. While prioritising work-life balance is positive for health and well-being, it presents a challenge for employers adapting to evolving expectations. Nevertheless, the US remains a fertile ground for talent, offering a diverse pool of skilled workers with varying work styles and preferences.
Conclusion: Navigating the Dynamic US Business Landscape
This comprehensive overview offers a glimpse into the multifaceted US economy, highlighting both opportunities and challenges for aspiring entrepreneurs and businesses. From the vibrant economic hubs to the diverse cultural landscape, the US presents a unique environment for growth and innovation.
The Great Wealth Transfer and Great Resignation have spurred significant shifts in the workforce, creating a need for adaptable business strategies. The rise of AI and robotics further underscores the importance of embracing technological advancements to stay competitive. Additionally, the urgency of addressing resource sustainability and evolving healthcare needs highlights the interconnectedness of economic and societal well-being.
While the American Dream remains a powerful motivator, it's essential to be aware of the complexities and potential pitfalls that lie beneath the surface. By conducting thorough research, understanding local nuances, and embracing diversity, businesses can position themselves for success in this dynamic market. The US continues to be a land of opportunity, but navigating its intricacies requires a nuanced approach and a willingness to adapt to a constantly changing landscape.
