This is a guest post by Ifeelgoods co-founder and CEO Michael Amar.
For too many American technology start-ups, Europe is a dirty word.
Classically, US start-ups have pursued the European market after their Series B or C funding rounds, or even later. Many companies only consider Europe when their US growth begins slowing down.
Then, they might target Europe by either hiring a European industry visionary, or by transferring a top sales person to London and hoping for the best. Sometimes this approach is successful, but it’s often not.
It doesn’t have to be that way.
With more than 700 million people, Europe is not worth leaving to chance. And the current economic challenges provide a real opportunity for growth and innovation.
Yes, Europe is more a concept and a currency than an actual single market. And yes, languages, taxes and regulation are a real pain. But since when have any of these obstacles held back an entrepreneur?
Put it another way. If you were raising a child and knew you wished for him or her to become bilingual, would you not start at the earliest age possible? If you want to succeed in Europe, build your start-up multi-nationally from day one. It won’t get easier to change and adapt once the company’s culture and products have settled into maturity. And today, technology, bandwidth and mobility empower start-ups to develop as international teams.
Here are some success factors we’ve applied at Ifeelgoods to help you win in Europe and the US simultaneously:
Bring in founders from abroad. Include Europeans in the founding team, and better yet, start with an established partnership that transcends borders. This way, your start-up is connected into the European technology and business infrastructure from day one. Every element of building your company will be adapted to both environments from the beginning, and will soon become second nature.
Hire bilingual and cross-pollinate. Finding the right talent is always key for a start-up, and cultural diversity and communication skills are no small part of the equation. When you’re international, communication automatically includes working across languages. Adding language skills to the profiles you’re hiring for is another way to deepen your capacity to win as an international business. Exchanging interns and employees overseas in both directions can also be an advantage.
Include a European VC. Admittedly, it can be difficult to find a European partner. But it’s easier to reach out to European investors when looking to raise money. Many European VCs would love to invest in the US, so you may be in a good position to find favorable opportunities. They will be able to assist your technology start-up with important introductions to the right potential partners in Europe.
Design the product for international needs. Product design is culturally specific, and businesses that attempt to shift into international markets after the product is cemented often hit the cold reality that it won’t be as easy as they thought. The difficulties aren’t just cultural; take internet privacy as just one example. Privacy laws in Western Europe are stricter than in the US. Therefore, a company whose product offering has privacy-related issues will want to address them from day one.
Lock in great client case studies overseas. Consumer-focused technology companies seek out that one major Fast Moving Consumer Goods (FMCG) company case study as the reference to jumpstart their revenue model. But that FMCG case study doesn’t need to come from the US – it can also come from a European company like Unilever, L’Oréal or Dannon (Danone), all large multi-nationals with billions of dollars in revenue. Today, multi-national American companies are more multi-national than they are American. And it’s often easier to get that coveted case study from Coca Cola or McDonald’s in a smaller country like Latvia or Turkey than in the US.
Tap the laboratory of the world. Pre-Internet, if you wanted to test a product, you bought some local advertising in Peoria, Illinois or Paducah, Kentucky, in expensive local media markets. Today, with the Internet, there are no media boundaries. If you release your solution in Estonian, you have a target audience of about 1 million people who can test it. Beyond France, Germany, Spain and Italy, there are a number of countries with smaller populations and a local language that create an ideal testing environment.
Get access to highly specialized talent. Though Skype was founded by Scandinavians Janus Friis and Niklas Zennström, the VoIP communications service, which was acquired by Microsoft last year for $8.5 billion, was developed by Estonians. Many European technology companies have turned to affordable engineers and programmers in Eastern Europe to reduce development times and costs while gaining access to highly specialized talent pools.
Europe isn’t one country but a collection of 50 countries speaking nearly as many languages. And to be honest, marketing expenses in Europe are greater because each market will need marketing material in the local language. But with fewer start-ups, even in Europe’s technology hubs, your company will have fewer competitors in Europe.
It’s time for US technology start-ups to stop considering Europe as an afterthought and to start building for and working in Europe from day one. After all, just like a child learning languages, a business will never be as flexible and ready to learn as it is in the beginning.
[Top image credit: Flickr, Kevin Dooley]
Michael Amar is the CEO and co-founder of digital rewards provider Ifeelgoods and can be reached at @ifeelgoods