7 February 2018 Issue 21 Feb/Mar

Launching DIY computing company Kano abroad

Alex Klein, co-founder of Kano, discusses how he launched his brand in the US.

Alex Klein is on a mission to teach anyone – even kids – how to build a computer from scratch. Using Kano’s range of DIY kits, underpinned by an open coding platform, it’s possible to build everything from radios and Minecraft hacks to full games, PCs and more.

Founded in 2013, Kano is already a prominent player in the London tech scene as a maker of both hardware and software. The startup banked £21m in funding last year to propel its push into 4,500 retailers across the US.

Klein explains how pulling off a successful US expansion comes down to five key elements:

1. You need to be there

People in the US like personal stories – just look at television advertising for startups over there. For example, the founders of smart doorbell company Ring and shaving company Harry’s have woven their personal backgrounds into their ads. Which shows that, as a founder, you have to be present. You can’t be somewhere via phone, email or Skype alone.

2. Think about turns

Buyers at US retailers will partly judge your business by how many times a given store has to restock your product. Every buyer wants to see more ‘turns’.

3. The ‘sell through’ is the hardest

It’s you that has to move your product. In most US retailers, especially if you’re doing something unique, the staff will not have an extensive knowledge about each and every product they are selling. If you can get a store really excited, they might put you in a catalogue. By and large, however, the marketing needs to come from you. So once you’ve managed to sell your product somewhere you can’t relax because you’ve actually created a big problem for yourself. Suddenly you have tons of product on the shelf that you need to move with clever marketing and buzz.

4. Americans like controversy

As we know, the US has an appetite for controversy right now, so use this in your advertising.

Our first ad carried the tagline ‘Monkey vs MacBook’. It features my MacBook, which I had left in the rain and which, unsurprisingly, stopped working. We gave the MacBook to a monkey to rip apart with a screwdriver. Whereas people in the UK had a really negative reaction – ‘Why would you destroy this beautiful thing?’ – people in the US loved it.

5. Don’t be cowed

You will probably be much smaller than companies already established in the US but the reason retailers are meeting with you is because their industry is changing. For me, there hasn’t been a better time for startups to take on physical retail in the US in years. There’s uncertainty, and that brings opportunity.

More tips on US success 

Stuart Chapman, COO and investment partner at VC firm Draper Esprit, offers his advice:

Pick your time wisely. Expanding to the US is more successful if you go early, when you are still working out your market fit, or much later, when you can leverage your product reputation.

Pretend you are an alien from Mars. The market, route to market and reasons buyers buy will probably be different to your home market. Do not have any preconceptions.

Hire in line with your corporate culture. Trying to keep two teams together in later years is difficult, but it’s far harder if they never shared the same DNA from the start.

It’s not an experiment. Go all in. Someone senior needs to lead the project in the early days, and commit to it.