Despite the fact that SaaS propositions are global by design, consumers (and this includes buyers in big companies) are parochial at heart. That means entrepreneurs must make some consideration for the differences between buyers in European and US markets.
Understand the differences in the US market – there will be plenty
Appreciate how this will change your go-to-market and segmentation
US buyers are forthcoming, so use them to learn
Stay uncomfortably narrow in focus
Mike Laven at Currencycloud, for example, explains that in Europe his business is purely a B2B proposition. Yet in the US, he is obliged for regulatory reasons to have a relationship with his end customer – and that means he has had to become a consumer-facing operation.
This is the most dramatic example we have found of business being different in the US, but he is not alone – indeed all our founders were surprised at the social and technical differences. Americans use cheques, they don’t have Chip & Pin.
In the UK, list marketing is easy; in the US it’s illegal.
This extends to customers, too. What might be a visionary sale in Europe might be a late majority sale in the US, with all the go-to-market and pricing differences that entails.
You must re-evaluate who will use your product, how and in what context, what they will value, how much it is worth, and how to package it.
You must develop new personas and value propositions from scratch for a US audience.
There are benefits, too, though. American buyers are generally more predisposed to operate transactionally – if a product makes sense, they will give it a go – which suits the remote/distance selling of a SaaS proposition.
That enthusiasm can help spin the SaaS cycle of Delivery > Feedback > Product Development: Conor O’Loughlin of Glofox says that his US customers gave better and more valid feedback, which has now been used to build a better product which is also appreciated by European customers, too.
Then, there’s the size of the market to consider.
There is the challenge of 50 state legal frameworks and then the market differences between different parts of the country – at the very least, the East Coast, Midwest and West Coasts have different sensibilities. Far from trying to bag every possible customer, you should start small and keep narrow.
In a market with 330m people and 20m corporates, you can make a perfectly good initial living operating in a tight niche, and that’s the best way to establish a beachhead without wasting time on travel or reworking marketing materials for new sectors.
Jos White of MessageLabs, for example, focused on banking in New York until the business had the credibility and resources to expand.
Establish key segments, rank and prioritise your markets and understand which channels will reach those markets most economically. Stay uncomfortably narrow in focus, despite the temptation to reach further out, until you have an enviable and credible track record.
Some pearls of wisdom from the Notion family:
“Be cautious until you understand the go-to-market differences, and don’t throw yourself at it before you know what you’re doing. Talk to customers. By the time we’d figured it out, we had 15 customers – learning on the job is a very de-risked way to operate.” Mike Laven, Chief Executive Officer, Currencycloud
“The biggest difference between the US and Europe is that it’s very noisy. You have to find a way to stand out from the crowd. You have to get creative.” David Skok, General Partner, Matrix Partners
“The more we started to serve [our US] clients, the more we started to see that these were our ideal clients. They gave a lot more concise feedback, and more feedback we agreed with in terms of the industry and where it was going. As we started to develop the product more in line with the expectations of the US client, we started to see more growth in the European customer base as well.” Conor O’Loughlin, Founder and Chief Executive Officer, Glofox
Crossing the Atlantic