“Any missteps will burn through resources and force a restart”
The U.S. women’s World Cup team’s recent victory, which The New York Times described as an “American invasion in Lyon,” was a great example of American dominance in the sport of football Europeans know and love. To contrast, in the U.S., the popularity of football (or soccer) pales in comparison to American football. Competing as a European software-as-a-service (SaaS) business in the U.S. is much like competing in the aggressive sport of American football, but equipped only with shin guards and a lot of endurance.
In order to survive and thrive in the U.S. market, European SaaS businesses must be ready to adapt to this entirely new playing field. As a French entrepreneur who has undergone this transition myself, I can say it’s not easy, but it’s possible with the right network of advisors, partners and VC teams in place. Let’s dive a little further into the idea of adapting to American football and business.
European SaaS Businesses Need to Recruit Players Equipped with the Right “Armor”
Recruiting the right team is the single most important secret to success in the U.S. market. First, it’s crucial for one or two executive team members to relocate to the U.S., to understand the cultural differences and represent the business locally.
Recruiting can be extraordinarily difficult to do as a relatively unknown company without a track record and proven product-market fit in the U.S. I call this the “Chicken and Egg” conundrum, which I covered in Part I of this series. Unfortunately, the Chicken and Egg conundrum puts European companies at a disadvantage in the football game from the outset.
Relative to well-known local competitors already operating with their “A Team” of talent, European SaaS companies often begin with a “B Team” of players in the U.S. I’m not implying that this B Team is less talented than the competitor’s A Team, but operating in an entirely new market removed the corporate “mothership” can put any talented team at a disadvantage. As a result, the B Team is often not as close to the product and may be less enabled than the competitor’s A Team. However, with the right training and support from a U.S.-based executive team, the B Team can grow to quickly keep pace with the local competition.
In recruiting, the value of a well-known American venture partner is not to be underestimated. Akin to identifying the right coach, funding from a U.S. venture capital firm is a critical first step for European SaaS firms. In addition to awareness, the right firm should provide mentorship and strategic guidance, as well as access to a network of talent with operational experience building SaaS businesses — all with a home-field advantage.
Quick tip: Your first hire in the US should be someone who can lead the go-to-market charge, as well as help you define your packaging, pricing and partner strategies. This hire is critical — and any missteps will burn through resources and force a restart. Unlike someone transplanted from Europe, this person would have the right armor to handle objections and take the hits from the aggressive U.S. market — while still emerging with the ball. They’d have the right mix of sales and marketing background, and could help position the value of the product correctly relative to a new field of competition.
Focusing on Strategy and Extracting Value Out of Every Second of the Game
In European football, a long, continuous game of 45 minutes per half is played, with minimal stoppage and no advertisements at all.
European businesses, as well, are used to operating with longer demos and discussing the beauty of features and functionality over time with the customer. To contrast, American football teams pause to regroup after each play to strategize the next. There is a formal playbook, a high sense of urgency, and a willingness to extract value out of each second of the game. Even advertisements appear throughout the game, using timeouts and game stoppage as an opportunity to extract value from the viewer.
If you want to win in the U.S., your enterprise SaaS company needs to adjust to a different cadence and strategy in your sales cycles — much like the short, aggressive bursts of play in American football. Both the way you sell and position the product is a lot different. Operate with a very high sense of urgency, formalize the next steps and use every play to extract more value — much like teams (or ads) in the Super Bowl.
For many European SaaS businesses, that means focusing on your sequence of events and living in a dollar quantification mindset for every product claim, benefit, feature, and more. Luckily, you can leverage your existing customer feedback in European markets, and create ROI calculators or case studies for your offering, which include statistics such as how much money was saved, or how much net new revenue was created.
Quick tip: If your product has reporting or analytics features, include a dollar quantification (or indicator of the value created) in every report. And make sure you are using dollar signs instead of Euros in the product, as well as American formatting standards (such as writing $1,245,644.00 instead of $1 245 644,00). Details matter.
As another example of extracting value out of every second, I’ve met U.S. customers who have said, ‘“I’m not interested in your demo; it will always look great and highly customized. Instead, just give me five references who can point to the value they drove with your software.” This experience has never happened to me in Europe, so I learned that it always pays to be prepared with relevant ROI case studies and customer references.
Dealing with Aggressive Competition
Anyone who’s watched an American football game knows how aggressive the defensive line can be when it comes to keeping the opponent from the end zone. The same can be true in business — U.S. companies often use aggressive intimidation tactics in order to keep European competitors at bay.
I’ve experienced these tactics now at several different companies. As we announced the entry of my current company into the U.S. market, we were nearly immediately served with a lawsuit from our largest worldwide competitor based in the U.S. And, at a previous company, a competitor sent cease and desist letters to prevent talent from joining our company. Many companies will do their best to dissuade both existing and past employees from joining, as well.
Like an episode of the TV show Silicon Valley, American competitors will use IP protection, IP infringement claims, non-solicits and confidentiality breach lawsuits as a form of legal intimidation. While these tactics are very effective, it’s important to be prepared for the worst of them while entering the U.S. market. Like the American football player geared up with protective equipment, lawyer up and get ready for some strong hits from your competitor’s defensive line.
Writing a New Playbook
Once you have your first team members in place, you’ll have to adjust your entire playbook for the new market. This isn’t a simple matter of language translation. Your value proposition, product, marketing, sales tools, delivery, enablement, and support functions need to be adapted for the American SaaS B2B marketplace. I’ll be writing more about this in a future piece.
About the Author
Stephan Dietrich is an Executive-in-Residence with General Catalyst’s XIR program. He was co-founder and President of French SaaS company Neolane, a recognized leader in the digital marketing space acquired by Adobe in 2013 for $600M. Stephan spearheaded the company’s entry into the U.S. market in 2007. He currently serves as an independent director on the boards of Vade Secure, Neotys, and Akeneo, and specializes in helping European SaaS companies land, scale, and successfully exit in the United States.