First disclaimer, I have no credentials but this is just observations from startups I have followed and discussions with people – I haven’t done it myself – of course every startup is different so you just can use this as a list of potential points to pay attention to, nothing more 😉
The US is such a huge market with many cultural differences with Europe that it is as if you had to start a new company. Therefore I would almost build a business plan as if you were starting from scratch and expect things to go wrong!
Culture is key
I strongly believe that culture is key to success so having someone locally who can carry this while building the initial team is key. In most cases I think a founder should plan to relocate until the team is senior enough to be independent. Of course the more mature companies might be able to do it the other way around hiring a senior exec in the U.S. and having them spend time at the head office. If you can’t commit geographically “forever”, don’t commit over time “I’ll stay in NYC for 6 months”, but commit for a goal “I’ll stay until we reach $0.5M ARR from US clients”. Success is often a “S curve”, and if you have a hard deadline, you’ll stop trying potentially close to your break through point.
Output: Mission, Vision, Values
Market & Ecosystem Deep Dive
The U.S. is usually a much bigger market and therefore more competitive in many instances. Review the size of the market, competition, product definition… Rebuild a business plan as if you were starting from scratch. It might be useful to forget the product you have for this exercise to make sure you don’t try to sell what you have rather than understand the real need. Of course at the end of the exercise there is hopefully some overlap with the current product 😉 Spend time with the whole eco-system you might discover new channels…
Output: Market Sizing with detailed segmentation
Product Market Fit
You probably have a pretty good fit at home so based on the market deep dive, what do you need to test to see if it will fit in the US. What product features need to be implemented if any? Server might need to be hosted there? CDN to decrease latency….
For example, customers in the US might be much more mature, have already a CMS or other software tools which means the integration of your solution will have to be different. It is not uncommon for you to have to build new things or remove others and if you don’t have the product visionary close-by (ideally attending the sales meetings initially) it will be hard to know if it is a MUST have or a NICE to have. It will be also challenging to carry back the message to the headquarters.
Output: Product roadmap before moving to the US if needed at all – just like when you started it doesn’t have to be perfect but good enough to give you confidence you have a fair chance
With such a large market, you usually will need a clear segmentation and strategy that goes with it – inbound, versus sales… I would be very careful in taking the learnings from your core market and replicate them in the US. What worked for you at home, might not work or be inefficient in the US. For example in the software B2B sales US companies might be much more willing to try startup products than in Europe so targeting larger accounts directly might be a good idea. Pricing is also something that doesn’t have to be completely identical. Of course there must be some consistency but many products have slight price differences based on where you are.
Output: GoToMarket plan or at least a set of test that needs to happen to validate the strategy
In my view, this is really where the challenge is. Talent can be extremely expensive in the US especially in “sexy” locations and you need to recruit A players else forget about going into the US (remember it is as if you are starting from scratch). Good news, if you are from Europe your dev are a lot more faithful (especially if you worked on step 1 (i.e. values)), talented and “cost” less. Bad news, you are a European company without a famous US VCs and stock options might be a pain to structure (top talent in the US is very aware of the tier 1 VCs and having Sequoia as a backer will help negotiate the package and close the deal)… Depending on your GoToMarket and where your customers are do you need to be in NY or the bay? If outbound sales or if your customers aren’t concentrated in any area why not try middle America – take the timezone into account since you will need to communicate with the head office quite a bit.
If you have a fully self serve model with inbound sales, maybe you can do it from home as long as you cover the timezone and find native speakers… That might be enough to bring you to the point where you can raise from a US VC and then move there. Nevertheless, if you don’t see the metrics that you need or you are not sure about your GoToMarket strategy it will be difficult to get true customer feedback when you are so far away to understand the market, the ecosystem…
Special note on hiring U.S. marketing/sales/business development people. There is a major cultural difference when recruiting these profiles. Europeans tend to be very conservative in what they say they can achieve whereas Americans are usually much more confident in their ability to deliver. It is not uncommon to have potential recruits pretend they will deliver 1M in revenue easy and it is very tempting to believe that, recruit them and let them do the job. In reality, things probably won’t be as easy as they claim so you need to be on top of them, go into the details and make sure you know what’s going on else you will never know why they didn’t deliver in the end. Meet regularly to discuss milestones, account by account to make sure progress is consistent with what you would expect… Industry experience, blind references and interviewing many candidates is key to make sure you have the right team and to remove the local cultural biais.
Compared to the average college educated European, Americans are not great at math and at writing. Add some basic math and writing tests, computing a discount, answer a mock client email, submit a RFI, build and present a Sales pitch… Using a consistent set of practical questions will help you discover the gem and remove as much as possible any biais you might have.
Output: Clear recruiting plan for the initial months so you have enough traction to fundraise there
Most local VCs will wait for you to be big enough to “de-risk” the venture and they will need to see revenue in the US before they invest in many cases (many VCs don’t see French customers are validation of product market fit 😉 ). If you are early stage, you can always relocate the whole team there – some VCs will be ok with keeping some of the development aspects in Europe but execs will mostly need to be in next to them ;-( Things can change but the US VCs investing in European companies tend to come later in the stage of development although because they need to deploy more capital since they have bigger funds.
Output: start establishing relationships as soon as you move to prepare the next round
Once you know what you need to deliver the best product there define the SWAT team, probably a founder with a sales & product focus so that he can funnel all the feedback to the team at home. Ideally this should not completely destabilize the team back home. Do you need a dev to iterate quickly or build demos… Make sure the people you take with you are well connected to the home team (when they will need support it will be cool if they like each other – bridging the timezone difference). Ideally they have been soaked into the company culture making it easier to carry on with number 1 above 😉
Output: List of the crazy few ready to restart from “scratch” and list of people to hire locally (for key roles make sure you hire top people).
Don’t forget the support function. Americans (in general) have a very different view on customer service so you need a top notched team responsive and with a major dose of positive energy especially during the European winter 😉
Output: Benchmark competitors or look how others are going it 24×7 – refund policies…
Are you ready?
What will happen when the SWAT team is gone and you execute the plan. Enough ressources to still deliver the amazing service, keep the team together… Is the product ready to go?
Output: List of things that need to happen before you press go – product, team recruitment, x million raised… Once you checked all those don’t find more reason to wait – Just Do It!
Ask for feedback before pressing go
I would go around startups at home with a similar GoToMarket that have done it (successfully or not) and ideally try to validate the plan or at least poke holes in it. Nothing wrong with learning from the mistakes of others
Output: a kick ass plan which will be wrong as soon as you land but at least you tried, cross fingers and let’s make it happen
Probably the most exciting one! Legal, Taxes, HR, Finance… It is boring but you might want to put some things in place so you are ready to deliver (IF IT IS A MUST ELSE FORGET IT) – especially in HR you will need to move quickly with competitive packages so having the answers to the stock options, compensation, employment contracts… Don’t lose a key hire cause you are not ready. BE CAREFUL WITH STATE TAXES AND LAWS!!! The US is not one country from a tax and employment law perspective. VAT rules might be different from certain products so be careful if you package them… Just have a quick check – never a roadblock but might as well do things right upfront
Output: Find the right people to work with for headhunters, legals, finance… The team based at home probably won’t know market practice AND many people work for cheap with startups in the US cause they know it is a long term game. Not uncommon to get a lot of free legal advice if they know you are committed to expanding in the US – as always referral is best, then skills (having done similar deals), then brand, then cost
Careful with outliers
You made it great now you might want to shift the whole center of the company to the US if it is your main market. Hire super talented people there. At some point, you might need to move the head of operations, sales there… Maybe move the board there. The communication between the multiple offices will be important and some of the product functions might need to be there…. Your product will be driven to meet the needs of your main market which might be the same everywhere but if not get ready…
All of these are just my thoughts, I have seen people doing it remotely, some with a SWAT team, some without changing the product… There is no way to have one plan but don’t forget to give back to the future generation 😉
The more tools you put in place to help you onboard new people the better it will be, you will soon be recruiting many people so you need to formalize the process to make new comers productive. Iterate and build this asset which will be key to scale fast.
Look for tips from other expats trying to do the same thing, for example the french founder SaaS Club is a very nice resource…
Your team will travel a lot so start getting miles with your AMEX so that you can save some $ especially if you are boot-strapping your way into the US
When should we go to the US? It is always difficult to know when is the right time but if you want too long you might have too much technical debt to be agile and adapt to this new market. I think it is good to go as soon as possible but don’t do it half way, commit time and resources and go for it.
Get out of your confort zone, don’t hire the French lawyer or accountant who has been there for a while. Don’t just hire the French who has been there for a while – make sure you hire the best people for the job.
This is all great but if you are not VC backed, you might not have the $ to hire top tier talent with function expertise (ie. sales) nor subject matter expertise, even less managerial experience. So you might need to hire young, train / ramp up. You can succeed this way, here are some tips that might be relevant to you:
– Generating HR quality pipe in a country with <4% unemployment is super hard. Try to be smart about it (ie. beyond job boards, linkedin scraping + outreach, piggybacking university events because you can’t afford them, don’t go to columbia/nyu, but rather PaceUni and lesser known colleges they are usually hungrier).
– Americans are much better at selling themselves than we are in Europe. Make sure you see a lot of candidates, otherwise you’ll get fooled. You also need to sell your project REALLY WELL, because from their perspective, you’re only a couple of guys in a coworking place, regardless of how successful you have been in Europe.
– Go after “odd” profiles, remove the French mindset that the school is everything. Why not hire an actor as a Sales rep if he has the raw skills and the potential to grow – a gamble but better than an average person.
– Pick your battles. For instance, it might cost you over $100k/year to have a US based controller + CPA + tax attorney versus a limited risk to get in trouble if something isn’t right. If you cannot afford a function that isn’t core to the company, do your best with what you have and hope for the best. Sometimes the fines for doing it wrong or waiting is cheaper than doing it right. Don’t forget about it though cause you will need to clean things up before getting a US investor who will need things to be clean and structured.
We didn’t have one customer success rep when we hit $1M ARR. We were so focused (and fanatical) on growing the topline that nothing else existed. In hindsight, that was definitely too late, but the “tunnel vision” was definitely a plus.