HomeSaaSiestGeo-expansion: Lessons learned from 3 real cases of going international!

Geo-expansion: Lessons learned from 3 real cases of going international!

Our first panel of SaaSiest 2023 featured three amazing co-founders with significant experience with the trials and tribulations of going international.

Meet our geo-expansion panel

Andreas Sjölund, co-founder and former CRO at Quinyx. Quinyx does workforce management. Andreas grew the company for 16 years, expanding into the U.K., U.S., and Germany. Now he helps startups scale up to go international. 

Carl Carell, co-founder and CRO of GetAccept, a digital sales room platform that helps salespeople create the best buying and selling experience from the opportunity to close. GetAccept went international on day one. Carl moved to Silicon Valley to do Y Combinator as an accelerator and started the first office in his second bedroom. 

Nora Huovila, CEO and co-founder of Videoly, a product video platform for online retailers and brands. Videoly has been international since the beginning. 

Takeaways

  • Consider going global when you get to €1-2MM ARR.
  • Take one small step at a time and then increase investment as you get traction.
  • Make sure you understand the market and whether you have product-market fit before going all in.
  • Do some exploration, talk to your customers, and figure out where you have the most common denominators with what’s made you successful previously. Come up with a narrow, tightly defined ICP and test your market. 
  • Be adjustable and flexible.
  • Make a quick exit from things that are not working. 
  • Build an expansion model around the segment that is working.
  • Don’t be afraid to ask for help. You’ll go faster.
  • Send a senior member of Nordic leadership to the new market to establish a local presence and bring in the core culture.
  • Hire entrepreneurial-minded people who have grit and are willing to do the hard work and stick around, even when the going gets tough.

When is the right time to go international? 

Andreas: I recommend considering it when you’re making around €1-2 million. We were bootstrapped too long. We started in 2007 and grew the business in the Nordics until 2014 before we took an investment that went into the U.K. We were at around €5 million ARR when we went outside the Nordics. Looking back, I would’ve gone international a bit earlier. 

Carl: We started a company, packed our bags, and moved to Silicon Valley on day one so we had to go international right from the start. Somewhere in the middle of these two extremes is probably more beneficial because it becomes quite a challenge when you’re forced to go into a market before understanding if you are ready, and if you have product-market fit. 

Nora: Nowadays, we have more flexible options and the means to take baby steps rather than needing loads of capital to go all in. For example, we can sell remotely. Ask yourself, What is stopping you, what are the obstacles? It’s a long journey to conquer a market. Start now, but take small steps. Start testing, and start getting feedback because you will need that in order to take the next step, which may be to hire a remote person. You can take it one small step at a time and then increase the investments as you go and get traction.

What are some of the experiences and learnings you’ve found along the journey? 

Andreas: Our biggest learning and biggest mistake was thinking we can just hire a VP of sales in the new market and that person can hire three AEs and then expansion is going to solve itself because our product is so great. But it wasn’t that easy. It took us two years to figure out that we needed a hub in-country. We hired marketing. Some of us moved to the UK with a family. We took our best salesperson, and our best technical implementation person, and we really built the Quinyx culture in an office in London, and then we hired from there. It was expensive, but a big, big learning. Get your face in the place and show focus on the market you’re growing into from the leadership team as well. 

Carl: The number-one thing is, do you actually think it’s worth it if you’re not willing to go there yourself? Also key is setting that core culture early on because it’s hard to hire people when major companies like Facebook and LinkedIn can offer a fantastic salary, office, and more, and you’re two or three people crammed in a second bedroom somewhere trying to hire the best people available. The other part is, do we actually have product-market fit? And for what segment of the market? Am I able to sell? What do customers say? What is that journey like? And then build an expansion model around the segment that is working. The U.S. is a different behemoth from going to Denmark or France or the Netherlands or the U.K. There are very different challenges and you need more tenacity in preparation to follow through on expanding to the U.S.

Nora: One great piece of advice I got is to make the initial market small for you. For example, the online retailer market in North America is huge, and it’s super challenging to get your first customers because nobody knows you. So how do you build credibility? Make the market small. Start from where you are the strongest in your home market. For us, it’s mid-sized electronic stores. Even though you may not have a local reference, at least you can show a strong use case from your home market and ask, ‘Hey, do you want to be a pioneer here in North America? We have all these electronic retailers in the Nordics that are taking the business to the next level with our product.’ Start small and then expand gradually. That’s also the cost-efficient point of view. 

When you’re going into a European market versus the U.S., can you apply the same kind of thinking? What does it take to break through the noise and really get through to customers in a fiercely competitive situation? 

Andreas: You can use a lot of the same things, but it’s fierce competition. Going over to the U.S. is like going to play in the NHL. You have to be a lover, but also a bit of a fighter to go over there because the competition is fierce. But you can do it. You need to have an ICP that is smaller than in the Nordics. You go for a really tight market where you know you can succeed and then have grit and not be afraid. Focus, focus, the focus is number one. 

Carl: The key part when you tackle the U.S. is that you have to be really focused. You have to set a tight ICP. You can even tighten it up to a certain segment and a smaller locale, like selling to telcos in New York for example. 

Do some exploration, talk to your customers, and figure out where you have the most common denominators with what’s made you successful previously. Do that analysis and make quick exits from things that are not working. We started selling to hotels, for example and had no idea that there were localized solutions doing similar things. They were giants with a thousand employees. Make a change if something isn’t working. Otherwise, you’re going to burn a lot of cash. Managing that burn is quite important. 

Also, think about logistics. If you start something in San Francisco on the West Coast of the U.S., it’s going to be challenging managing the team if you’re trying to get collaboration between Europe and the West Coast.

Is it harder or easier to go into a market that you think is going to be similar but then actually turns out to be very different?

Andreas: You have to be adjustable and flexible. You shouldn’t assume things. Test things. If something doesn’t work like it does in Sweden or Denmark, try something new. Piggyback on partners and people who are local to get help faster. 

Nora: If you have a product that is creating value in your home market for people, why wouldn’t it create value in another country? Don’t overcomplicate things. For us, the biggest difference between Europe and North America has been the time difference. We needed to have a local presence in the U.S. to be closer to customers, to be present in the local time zone, and be able to talk about things happening there (like football games).

Carl: It depends. Doing some informal research is key. Talk to people who have gone on the same journey with similar products and similar ACVs and piggyback on their experience.

For example, if you’re successful in Denmark, it’s highly likely that you’ll be successful with similar salespeople in Holland because they have a very similar culture. But in France, things are very different. I’ve sat in a meeting with Big Four consultancies, and the managing director doesn’t speak English so they revert back to French. We’ve had this issue: how do we actually coach a team in France, which is an important market for us? These are things you figure out.

Sometimes it’s good to reach out to an investor for help. Do you have anyone in France who can help us? Can they provide some insights about how to do business there? We often think about figuring out the answers ourselves. The number-one thing we learned from Y Combinator is to ask for help. We’re quite bad at that in Scandinavia. It’s not a weakness to ask for help.

How would you build the team if you had to do it all over again, and how would you make sure you attract the right people?

Andreas: When you start out, think about hiring people who want to move (to a new country) down the line. Make sure that they’re on board and thinking that way right from the beginning. We’ve had great experience with training people in the Nordics, then sending them over to a new market. 

Carl: I agree. Do you actually believe in it if you’re not willing to move there yourself? That’s how I look at it. Another common mistake is to hire a senior VP of sales who has done it a couple of times. If that hire goes wrong, you’re wasting one or two years before you realize that was the wrong choice. In my experience, finding someone who can grow into a leadership role is easier. Or betting on a couple of different entrepreneurial salespeople, ideally with outbound experience because you’re not going to get inbound in a new market. You need people who have grit, are enthusiastic about the journey you are on, and are entrepreneurial and willing to do the hard work. You don’t want them to leave as soon as the going gets tough. Those things in combination are quite important. 

Nora: For us, cold LinkedIn emails have worked really well. I sent a hundred LinkedIn messages, and our head of people sent another hundred, and that’s how we got our first hires to sell our solution in the new market. But these are not senior people. It’s crucial to have a really senior integral member of your Nordic team relocate to the new market to bring in the culture. In terms of appealing to top candidates, one of the advantages we have here is the Nordic work lifestyle, which is very attractive. You also need to have competitive salaries and you want to attract entrepreneurial-minded people because there’s a lot of grinding for the first few years. You need people with the right mindset for that. 

What’s one last piece of advice or takeaway that you would like everyone to remember?

Andreas: You have to focus on the customers. Make it easy for them to buy, treat them well, and get them to be raving fans and references because that will be golden when you start building the business locally. McDonald’s was our first customer in Sweden. Nobody outside Sweden cared about that. They cared that we had local customers, like the Mary Rose Museum in the southern U.K. That’s what they were interested in. So cultivate raving fans. Really focus on the customer and make them happy.

Carl: If you choose to go to the U.S., make sure you have a go-to-market plan that’s very tight and narrow and execute on that. And if that doesn’t work, then move to the next vertical. Also, focus on finding that key person who’s going to carry the culture so you have a little bit of tenacity in the team when the going gets tough. It will be a very bumpy ride. We’re in five different countries, and it’s bumpy in every country. Having those tenacious people is key. 

Nora: Remember that market entry can be cost-efficient. Take baby steps and don’t overcomplicate it. Take it one step at a time. 

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