MV #011: Lessons from startup expansion into Europe & what I think about bad demos.
Growing startups in Europe and why a bad demo can make or break a deal!
Read time: 9 min
👋 Hi there, happy Sunday!
Yep, when I heard Christmas songs in a shop this weekend, I realised it’s not that far away. It’s shocking to think another year has passed, and 2023 is coming closer.
Let’s talk startups and B2B sales!
🌍 Startup Stuff
Expanding to the US
I read an interesting article in the Times (link) about how hard it is for Britain’s tech firms to expand to the US. Some firms are even being told not to go there because it’s so hard.
Pete Flint at NFX, a VC firm, is quoted in the article and aiming to change the prevalent mindset.
“There is a perception that succeeding in the US and Silicon Valley is really hard and costs $100 million to do and it’s just not true,” he said. “Many brands have done it. It takes a mental shift but it’s very, very possible.”
It’s possible to expand into the US market without massive investments so long as the startup makes a conscious decision and hires a good founding team to conquer the market.
There are absolute differences in pursuing the market. It has to be done consciously with a good plan and a tight feedback loop to iterate the playbook.
The same is true for expansion from the US to Europe.
⏩ Startup expansion from the US to Europe.
Expanding to Europe. It’s not that hard, either.
😡 What the Negative Nancy says:
Europe is many markets. Not just one.
You can’t just copy the US playbook in Europe.
The product needs many adjustments to work in Europe.
Europeans buy from Europeans, not Americans.
Yes, of course. Europe is a very heterogeneous market.
It is a vastly different market to the US. There are many nuances within Europe it.
And yes, in an ideal state, you could account for that in your product and go-to-market.
But guess what?
You’re a startup. You don’t have many resources. So, it doesn’t have to break the bank to get started in Europe.
The focus should be on hiring a good landing team, small, nimble, with a strong sense of urgency and builder-mentality.
Here’s what I learnt from your journey doing international expansion.
💡What I learned expanding a VC-backed startup to Europe
Over the last few years, I built Clari in EMEA. We started from pretty much nothing and created something amazing. Here are my three (out of many, many) learnings for go-to-market professionals.
If you’re a US startup thinking about expansion in Europe. You should read this.
Hiring
When you land in Europe, ensure you have a solid whole team. That’s usually 4-5 people in all the essential functions. Reps, SE, SDR and a leader.
It’s either go big or go home. A rep on his/her own won’t be able to do well, feel lonely and unable to succeed without some basic infrastructure.
Big doesn’t mean millions. But it means a solid foundation and commitment to tackle international expansion to Europe as an executive initiative.
What international expansion is NOT
It’s not like a new region in the US. If you’re in Silicon Valley and opening up new offices it would be wrong to say the following sentence.
“We’re growing, we’ll now open new offices in Austin, Boston and London.”
That’s not comparable.
The expansion to London to tackle Europe is a project. It can start small, maybe even at the same size as you would start your new hubs in the US, but it requires a different level of attention.
Who to hire?
When hiring, focus on getting people in seat who can take on leadership roles later as you scale. What to look for in each of the candidates regardless of function.
Sense of urgency
Excitement for the subject matter of the software
Builder mentality
Things won’t be perfect. The team will work odd hours and work with the US a lot. Many things won’t be in place, and you need to figure it out as you get started.
That should be part of the fun. Not a thing that bothers you.
Feedback Loops
At the point of international expansion, which typically happens somewhere between Series B and C, the company will still be very US-focused. That’s normal. Because you’re there to help add that international lens.
When you start in a new region, each member has to establish tight feedback loops with HQ.
Image: Frontline Ventures
SDRs
Talk to your leaders about what works and what doesn’t. Outbound messaging that will resonate in the US will not work in Europe the same way. Track what works, and adjust what doesn’t. Repeat.
SE (Sales Engineers)
SEs are a critical feedback provider to Product Marketing and Product Management. What part of the product meets the needs of the local market? What does not work? What product messaging works well, and where are the gaps? The first SE on the ground should establish a direct line to product and product marketing leadership.
Sales Leadership / Managing Director
Leadership has to work with senior leaders across the company from the start. This is not just for sales.
The local VP or MD will have to work with Finance, HR, Operations and other functions. As the first hire and leader of the European team, you have to think about building a business, not just a sales function. Even though reporting lines might not line up all to the MD, the person inevitably is the leader everyone will look up to.
Take that role seriously and acknowledge its breadth.
Below are two charts by Frontline Ventures from a startup report about international expansion. (link)
Regardless if you get a GM or a senior sales leader. To build a strong local culture that will thrive, you must have a broader perspective on the business as a leader.
ICP (Ideal Customer Profile)
When you expand internationally, the company has to have a clearly defined Ideal Customer Profile (ICP).
If you’re starting a region, you have to be sure that the US HQ is setting you up for success as much as possible. You must know precisely what works in the US, so you have a baseline.
Take that baseline and test it in Europe. Do the same customers see value in the software? Are there glaring gaps? Is the market fundamentally different?
Then, iterate the profile, and get more granular.
For instance, I learned that US companies are much more risk-seeking than in Europe. In Europe, sales cycles inevitably took longer to prove value to all relevant stakeholders. However, once the value is proven, the commitments often are multi-year contracts.
Also, data!
Data, data, data.
You want to invest in good tooling to get as accurate data as possible on your prospects. Zoominfo is notoriously US-focused, and you need to augment your data sources to build suitable territories for your sales reps.
A bad territory strategy can erode morale very quickly. Work with revenue operations and sales strategy in HQ. Be clear about what your ICP is and that you have a path to reach them.
Advocacy
You must build advocates early if you start a region early with a new, innovative product. Typically, you’ll find that the industry you’re working in is smaller than you think.
People know each other, and people talk.
Use that to your advantage. Become a LinkedIn addict by connecting the dots. Go to conferences and speak to the right people. Interview as many customers as prospects that you pitch.
Learn about what they like and what they dislike, and create a community of champions. This will go a long way in helping you establish a local network of advocates who can speak to the value you deliver.
In Europe, if you can provide local references, it can go a long way. It feels and is closer to home.
What about Negative Nancy?
Well, as always. We won’t be able to change her mind. Startups expanding into Europe must walk a delicate balance of investing not but adequately burning too many calories as they test the new region.
You don’t want to leave money on the table and let a competitor go for the land grab, but equally, you have to expand thoughtfully.
Acknowledge that it won’t be perfect. You will use the US playbook to start, but you will iterate fast. You will use the US demo, but you will tailor it quickly. You will not be able to account for all local differences, but you will do your best.
➡️ If you want to talk international expansion, hit me up!
🔑 Unlock More Value with the Perfect Pitch
This week I posted (here) about the importance of a good demo.
I hate it when bad demos win deals. It’s basically just dumb luck. As a sales team, you want to work on minimising the risk of losing a deal as much as you can from every angle.
The demo is one of those.
A demo can MAKE or BREAK a deal.
Yet, many sales teams don't take the demo seriously enough.
A deal-making demo requires three things. Deep discovery, thorough preparation and a strong partnership of the people pitching.
Let me dive into each area.
DEEP DISCOVERY
What does that mean? Discovery is the process of uncovering everything relevant about your prospect during the sales cycle. It covers everything about their goals and how you will help them.
You must remember that you can only:
- map your solution to pains that you know
- resonate when you speak the same language
- succeed if you know what value you deliver
- show a from > to journey if you know the status quo
- convince a C-suite by understanding the big picture
THOROUGH PREPARATION
You win or lose based on your level of preparation. It’s easy to fall into a bad habit and reduce preparation because you know your teammates, the prospect, the industry, and how you solve the problems. I’m here to say DON’T.
You must:
- prepare meticulously.
- agree on roles during the pitch.
- define a value-focused demo talk track.
- have a backup plan in place for everything.
- agree with everyone about what success looks like.
STRONG PARTNERSHIP (AE/SE/Leadership)
Batman & Robin. Tom & Jerry. John & Paul. Thelma & Louise. What they all have in common is that they are strong duos.
The AE/SE duo is critical in a high-performing team. In a pitch, you need to be aligned and work with your leaders to communicate what you need to do well.
You win:
- as a team when you collaborate before, during and after.
- when you address concern confidently and succinctly.
- by keeping the pitch interactive and present as a team.
- by making the pitch collaborative rather than one-way.
- by mapping value to the needs in the prospect's words.
You can win deals with bad demos.
I’ve seen it many times. Deals can be won with mediocre or even bad demos. But deals with great demos are bigger, better and faster.
AEs, SEs, and revenue leaders need to focus on:
1. DISCOVERY
2. PREPARATION
3. PARTNERSHIP
That will unlock more value in a sales cycle and help foster a winning culture. You also significantly reduce stress levels by doing discovery, preparation and building a strong partnership.
🗞️ In other news
It’s been a tough week for crypto. (FTX)
It’s been a tough week for tech. (CNBC)
It’s been a tough week if you trusted gurus. (via Twitter)
🙏 That’s it. Have a great Sunday!
If you enjoyed this: Subscribe!
🤓 Don’t know me? Here’s the about section.
My name is Semir Jahic.
More Value is my newsletter with lessons, stories, observations and analyses from my experience building a VC-backed B2B software startup and leading a high-performing sales engineering team.
More value is made for startup builders & sales engineering leaders.
But if you enjoy learning, want to work in startups and become an effective go-to-market leader, you’ll enjoy reading More Value too.