Idio is a marketing technology business which uses content choices to predict a user’s interests and generate relevant and appropriate marketing messages and actions.
Idio is particularly attractive to businesses in sectors like financial services– where customers invest or buy products on an annual basis rather than day-to-day: where purchase history may be sparse, but information is key to product familiarity. Idio will track a user’s content choices as they progress through a website and then use machine learning to make relevant ongoing content recommendations, all of which generate an appreciable uplift in monetization.
Like so many of the businesses featured here, Idio started out as something else – but rarely has the leap been greater. It began life in 2006 as a personalised music magazine, automatically aggregating content from music sites like NME and Rolling Stone to the tastes of each individual user.
Co-founder and CEO, Ed Barrow, says, “There was no great business model, but we created a great technology which was able to predict someone’s interest in music depending on the articles they were reading. We then pivoted that technology over to a SaaS software platform in 2012 and expanded it to cover everything in the world; so the AI is able to understand over 25 million topics and is fluent in all European languages.” Since then, the Idio engine has learned from the reading habits of over 130M people.
A great pivot, a challenging transition: the business with three restructures
With investment and renewed confidence, Ed wanted to expand immediately to the US, to ensure that the product they were building was suitable for the US market. “Big mistake”, he says. “We were much too early. We didn’t have enough traction with a client base to give us credibility, or a sales team whose expertise of selling the product we could export. Certainly, we learned about US product market fit, but it ended up being too early to have a team on the ground.
“We also brought in people who, in hindsight, were familiar with the market, but who didn’t understand Idio. Everyone thinks that ‘America is different’, and in some aspects it is. But hiring an entirely local team can reinforce that message; so you spend far too much time catering for perceived market differences rather than trying to make sure they understand your company and your product.
“Until you have proven traction in the US market, it’s hard to hire the people you want, both in terms of cost and quality.
Who would join a start-up with zero revenue? You have to question what kind of person joins a remote satellite of an unproven start-up in a very competitive US market! In retrospect, the right approach is to take some homegrown talent over.
But don’t rush: build solid traction in your home market, because client success in the UK can translate to the US. Identify one or two people from your UK team, for whom starting in the US would be a career-defining opportunity. Give them that opportunity and the responsibility that goes with it, so they work their asses off to make it happen, and support them aggressively from the UK. “We went through three restructures and have finally got it right, and are now seeing exceptional growth in the market when we sent our main UK sales guy over in 2015.”
“You land in New York and the vultures start circling. People will take advantage of your lack of awareness, your fear that everything is different, and your desire to get something happening. You can burn money very quickly.”
“The other crucial aspect is that your culture is built out of your HQ, so unless you make a conscious effort, you can rapidly end up with two companies. Again, taking homegrown talent is pivotal because they will also export the knowledge and culture that you need. “All that said, our initial efforts weren’t wasted: our initial VP, Solutions has become our Chief Strategy Officer; he’s at the core of our global business and our product-market fit in the US is now solid because of him”. Today, 70% of the sales team is based in the US and the global sales organisation is centred there. Engineering, Marketing, and a small sales team remain in the UK.
Hold your nerve
If you’re fresh off the plane, Ed says you need to keep your nerve. “You land in New York and the vultures start circling. People will take advantage of your lack of awareness, your fear that everything is different, and your desire to get something happening. You can burn money very quickly. There are no shortcuts – especially in business development – so don’t try to outsource it!
“There will also be US-based startups with US-level funding and crazy marketing budgets who will splurge on every event sponsorship and employee perk that you can’t afford. And that means staff who want to know why they haven’t got free socks or a foosball table. But don’t panic. Hold your nerve. Some of our best people approached us, and asked for nothing other than the opportunity to perform.”
Whilst Idio was early to open a US office, the business did use its connections once it had a stronger UK client base. An enterprise play focusing primarily on the financial services vertical, there were plenty of connections between London and New York. “With a company like JPMorgan, half the team is in New York, half the team are in London, and that gives you reference work in the UK that translates well in the US. Yes, there are cultural differences; and they’ve seen more technology – everyone’s passed through their doors to pitch something – but commercialism and referenceability count for a lot.
Doors open far more easily in the US than the UK. Meeting people face-to-face is important too, so get used to spending a lot of time on planes.
“But it’s all worth the effort. US companies are more mature in their strategies, so there are more accounts to go after, with higher deal values and a greater propensity for risk. So the sales cycle is faster and you win bigger. To set up for that, I think it’s valuable for Solution Engineers and Product Management people to join your US market effort because they can support the local team and also feedback requirements straight into the product.”
• The US is a different market. Seek product-market fit first, and gain some happy clients, before tackling the physical and intellectual stretch of moving across.
• That said, don’t rebuild the product to match the expectations of a US sales force.
• Bring local talent to the US, and they, in turn, will bring your culture.
• It’s a tough labour market, but if you’re good, eventually people will want to work for you and beat a path to your door.
• Referenceable clients are invaluable. If you have European clients with US
offices, leverage those bridges.
This story was taken from Notion’s Crossing the Atlantic Report