Article authored by Viesturs Deksnis.
One of Latvia’s largest business delegations visited the United States last autumn, led by Latvian President Edgars Rinkēvičs. A wide range of businesspeople participated, seeking opportunities for cooperation and development. The group visited San Francisco, Houston, and Denver. In Denver group of Latvian politicians and business people led by Minister of Economy Valainis visited Latvian Technology Company “SAF Tehnika”. Jānis Bergs, the VP of Global Sales & Business Development at the company, spoke with us about the value of such visits in the short and long term, as well as the tools that might help businesspeople from Latvia enter the US market and develop their businesses there.
A large delegation from Latvia visited the USA this autumn. What do you think about such visits and the benefits that they provide?
People in the United States know comparatively little about Latvia and the Baltic States. The average American won’t know much at all, except perhaps for associations with famous Latvians, such as basketball player Kristaps Porziņģis. Latvia is also becoming more known due to the popular movie “Flow”, which is being screened in many cinemas across the country. This is why delegations from Latvia are so important. The more businesspeople and politicians visit the United States, the more sales there will be, and the more recognition Latvia will gain. Of course, one visit won’t change much, but if such efforts are organized regularly and sector by sector, the potential for investment will be substantial, and powerful goals can be achieved. I’ve lived in the United States for the past ten years, and I have increasingly encountered other Latvians entering this market. This is especially evident in the Latvian American Chamber of Commerce, of which I am Co-President. During the last visit, I was impressed by Economics Minister Viktors Valainis, both because of his fluent English and his ability to discuss Latvia and its entrepreneurship in various ways.
You mentioned the Latvian American Chamber of Commerce. How does it help businesspeople, and what other ways are there to support the ability of businesses in Latvia to enter the market in the United States?
There are émigré Latvians in the Chamber of Commerce. We have an informative website and seventeen regional directors covering the entire country. I welcome companies from Latvia, such as “unicorns” like “Printful”, which has done very well in America. “SAF Tehnika” sells approximately 60% of its output in the U.S. There are many companies from Latvia operating in various niche sectors – too many to list. While many people don’t know where these businesspeople come from, they do recognize the brand.
As someone who is aware of the situation and the limitations that exist, particularly in terms of finances, I would propose more activity in the United States. The Latvian Agency for Investment and Development (LIAA) currently has only one representative in the U.S., who simply cannot cover the entire country. Great Britain has several dozen people working on economic contacts with the U.S., so we have room to grow, especially in terms of improving the efficiency of these processes. I am hopeful about the new director of the LIAA, who may strengthen and develop the organization more fully.
The United States is far away from Latvia and not well known. If someone wants to launch operations in America, what should he or she keep in mind?
Based on my experience, I would recommend utilizing all possible resources, including the Latvian American Chamber of Commerce. When it comes to working in the United States, there are important issues such as immigration. You can’t just show up and start working in the U.S.; you need a work visa or a green card. Some people who ignore this find themselves banned from entering the United States for life. The Latvian American Chamber of Commerce can connect you with lawyers who specialize in immigration issues. There is also support from accountants for opening a bank account. The Chamber also offers other types of assistance that would take much longer to find elsewhere.
How does the market in the United States differ from others? What do people need to keep in mind?
The market in the United States is favorable in that it is open to others. No one will discriminate against you simply because you are from Latvia. Americans appreciate new and progressive ideas, so innovative products tend to sell very well. It is also true that Americans are far more prepared than Europeans when it comes to valuing good services. Various sector-specific exhibitions can help you enter the market, but attending only once won’t be effective. You need to attend these exhibitions year after year to ensure ‘word-of-mouth’ exposure. Companies already operating in the United States can help with contacts or potential partners who can assist in laying the groundwork for your operations. Another option is to offer products to end users via the Amazon platform, which doesn’t require your physical presence in the United States.
From the perspective of the United States and analyzing the most in-demand business sectors, I believe the market is large enough for every niche product to find its customer. Of course, the IT sector is among the hottest, which includes artificial intelligence that has attracted massive financial investments. This, in turn, creates demand for various services in this area. Print-on-demand, IT, Electronics, telecommunications, and healthy nutrition are other sectors where companies from Latvia have been successful in the United States.
“SAF Tehnika” has been operating in North America for 12 years, which means that you have accumulated experience. What has made you attractive here?
As far as I’m concerned, the greatest achievement has been the development of our company. We have a warehouse for products that are distributed across the United States. We employ 20 people, including three from Latvia, and in certain areas, such as TV broadcast station equipment, we have achieved the position of market leader.
Our flagship product is the air quality monitoring sensor Aranet4, which is our best seller on “Amazon”. We recently introduced a radon sensor that, in terms of its technical specifications, is the best of its kind in the world. Radon is a naturally occurring gas and a leading cause of lung cancer. It’s a significant problem in the U.S., particularly in mountainous areas. You cannot buy or sell a house without radon measurements. That’s why this is a large market niche. “SAF Tehnika” also works with greenhouse monitoring and telecom systems. We offer our products to end users without directly engaging in public procurement. Instead, we participate in those with our partners. We have also been working with the military sector in recent years, as well as with schools, where we monitor air quality. This means closer partnerships with the government.
People are similar around the world, but there are differences in the business environment in Latvia and the United States. The time difference between Latvia and Denver is nine hours, which means there are only two or three hours during which offices in both places are open. This requires asynchronous cooperation. Americans are workhorses. They are disciplined, work hard, and never argue with their bosses. In this sense, I would say that work in the United States is simpler. Still, people in Latvia are more creative. They offer their own ideas, rather than just following their boss’s instructions, as is often the case in America. That is precisely why someone who wants to start a business here should visit the United States and spend some time here to understand the dynamics. There is little benefit to hire an expensive agent who doesn’t understand how Latvians work.
The United States stimulates its national economy in various ways, which means that most components in products must be manufactured in the U.S. when it comes to government procurement. I predict that the administration of Donald Trump will increase these demands, presenting great challenges for companies from other countries.
What do you think businesspeople can expect from the Trump administration?
During his first term in office, nothing negative happened to “SAF Tehnika”, as no import tariffs were imposed. China was essentially pushed out of the market. When comparing Trump and Joe Biden, I must say that many things were handled more easily during Trump’s first term, without unnecessary bureaucracy. It’s hard to predict whether he plans to impose tariffs on European products, and that seems less likely to me. I’m also somewhat skeptical about Trump’s plans to deport millions of illegal migrants. Sectors such as agriculture rely on migrants who are willing to work for low wages without complaints. This supports economic development. I am more concerned about the security situation in the Baltic States due to the war in Ukraine, but I hope there will be sufficiently strong Latvian lobbyists from émigré Latvian organizations working with the administration. I believe the situation will be turbulent, like a roller coaster – up and down, up and down. Americans voted for Trump because of their pocketbooks – they simply want a better life.
In conclusion, what are your wishes for those businesspeople who wish to conquer the market in the United States? What do you wish to the economy of Latvia?
When I look at how Latvia is developing, I see that it must focus on building an economy based on export of high added value product and services, because the domestic market is simply too small. Prosperity can only be generated through exports. “SAF Tehnika” has made a significant impact within the Latvian community in Denver, creating opportunities for businesspeople to visit this state. If there were ten Latvian companies like ours in the United States, the landscape of our exports and available contact networks would be quite different. Go ahead and try! Don’t be afraid, because the world isn’t that big. Our foot is in the door; we just need to open it wider. The world belongs to the brave.