Startups and tech companies are created and developed all over the globe. Many of these companies who get their start in Europe make the move across the pond and put down roots in the US. There are a lot of reasons why an organization would choose to make this move; Forbes published an interview with Collibra co-founder and CEO Felix Van de Maele to understand why he chose to bring Collibra to the States. Below is an excerpt from “Lessons in ‘Hopping the Pond’ from Collibra’s Felix Van de Maele.”
Q: If you’re a European tech company looking to expand into the U.S. market—and want to open a substantial office there—when do you do it? How do you know when your business, and/or the market you’re serving, is mature enough?
We looked at the U.S. early on. We wanted to find companies that had a problem we could solve. When we were still based in Europe, we got to know potential customers through conferences and other events. I feel like maybe when a company gets seven to nine U.S.-based customers, it might be time for the founders to move. I feel like we made the move organically. But I believe when a company decides to move, it has to be a founder, or someone close to a founder, to move first.
In our case, my co-founder Stan (Christiaens) moved first. I finally went as well, and moved my family, because the situation just wasn’t productive anymore. I was spending over 50% of my time in New York. There was too much jetlag. But earlier, when I was doing more day-to-day product management work, it made more sense for me to stay in Europe.
Q: How specifically was it difficult for the business to be based in Europe, and serve U.S. customers??
Serving your customers becomes a lot harder. In the beginning, when you have very few customers, you need to do absolutely everything to make them successful. We were on calls with (U.S.-based) customers in the middle of the night all the time. In the end it meant customers had a lot of control over us. We also believe that presence creates opportunity. It’s very difficult to close a deal if you have to say to a prospect you won’t be able to visit them until a couple of weeks.
Q: What are the implications of a move to the U.S. on sales and R&D? Is there a faster pace of activity?
It’s hard to hire a VP of sales in the U.S. Salespeople in the U.S. are really good at selling, especially themselves. It’s very hard, in the beginning, to really know if someone will be good or not. That’s why one of the founders needs to become local in the U.S. Otherwise, you just don’t know if things are working or not. Selling is also more of a black art, especially in the beginning when it’s not as repeatable yet. That’s another reason why one of the founders should move. The founder should be together with the VP of sales in every big sales meeting.
The thing which surprised me is how much more expensive scaling in the U.S. becomes. Part of that is location of course. New York and San Francisco are expensive cities.
Q: And what about R&D?
On R&D, initially, we kept R&D in Europe. I think that works well, especially in the beginning. When we were at the point where we were selling three different products and had more than 100 employees, and felt we needed to modernize our stack somewhat, we decided to augment our R&D capabilities with some presence in the U.S. as well. The challenge broadly is that the gap between sales and R&D becomes even bigger. You always need to bridge the gap between the personalities of a sales team and an R&D team, but now they are further apart, and you need to bridge the culture gap between U.S. and Europe.
Q: Speaking of company culture: Having two offices across the ocean has to be challenging, in many ways, from a cultural perspective.
When you move to the U.S. and open an office there, the center of gravity does sort of change quite a bit. You have to make sure the people left in Europe don’t feel like the third wheel on the wagon. It all creates uncertainty—sometimes you feel like you don’t know what the guys in Europe are doing or the other way around. Ultimately, you need to figure out if you’re going to be a dual HQ company or really move the HQ. I don’t mean from a legal perspective but from an operational perspective. Where you hire your executive team will really dictate that. Both have pros and cons.
It becomes a big part of the job as CEO, to manage that well. You need to build much more thought and structure in the way you and the company communicate and make decisions. Scaling really rapidly is very difficult already; doing it simultaneously on two continents adds another layer of complexity that you can’t underestimate.