At Atomico, I work closely with international founders who are looking to scale into the U.S. after scaling in Europe or their home regions. I’m constantly asked about lessons about scaling, but who better to learn from than founders who have been there?
I spoke to two founders. Cesar Carvalho, founder of Gympass, a platform for companies to offer fitness classes as part of their benefits program, scaled his company from Brazil to Europe, and then the U.S. in 2018. Kasper Hulthin, co-founder of Peakon, an employee retention platform originally from Copenhagen, recently brought the company to the U.S.
This is the first part in a two part series about their insights where I asked the two some basic questions about their U.S. operations.
- Why did you decide to scale to the US and when? What markets were you in before you hit the US? Where exactly are you in your US journey now?
KH: Peakon’s ambition has always been to become the global leader in our industry, and that by nature requires to also be a leader in the U.S. market. So the U.S. has always been part of the plan.We raised the first part of our series B with Balderton to fuel this expansion. We had originally started in Copenhagen, then established our commercial hub in London and had set up sales offices in Berlin and Auckland before we took on the US. Now one year in, we’re built a strong initial team of 30 people, won some significant customers and are building momentum and awareness in the market.
CC: We started in Brazil in 2012 and expanded to Mexico, Chile, and Argentina between 2015 and 2017. We entered Europe via Spain in 2015 with subsequent operations in the UK, Germany, Italy, France, and the Netherlands.
We entered the US market in March of 2018. After establishing the business in Europe and Latam, the US was naturally our next step. We had refined our Client offering and strongly believed that our unique model would allow us to succeed in the US corporate wellness market.
While we’re still in the early stages, we’ve already partnered with various notable companies, including Citizens Bank, Etsy, and Activision Blizzard. We currently improve the lives of thousands of employees in the US by giving them access to our growing network of 7,000+ fitness partners throughout the country and 48,000+ world wide. Our continued success in the US is very important and, as such, I decided to relocate to New York with my family to closely oversee this expansion.
2. How does marketing strategy differ between Europe and the US? Do you see key differences comparing product marketing and lead gen positioning? Is there a benefit to having separate teams addressing core markets?
KH: In general the American market seems to be more mature in buying SaaS solutions. Our American clients are aware of the challenges in our market, they are just looking for a solution. There is less education needed here versus Germany, for example.
When it comes to marketing, I think most European companies coming to America are too ‘polite and soft — they don’t really embrace the same fierce competition rules’. It takes some time to adjust to the directness of the American market in terms of positioning. For that reason I believe it’ll be beneficial for anyone going to the U.S. to hire, or work with, someone that understands the American market.
CC: After analyzing and iterating our marketing strategies across regions, we have made some interesting discoveries. Generally speaking, corporate clients, gyms, and users follow the same customer journey regardless of their geographic location. This pattern has allowed us to globalize some of our strategies without sacrificing attention to local nuances of a given market. This is especially important as our Marketing and Business Development Teams adopt an omni-channel approach to demand generation focused on hyper-personalized communications to promote a healthier, more active lifestyle.
We have also discovered that, although the customer journey is similar across regions, behavioral triggers can be different. Healthcare costs are not the primary concern for HR Executives in Europe, but they are at the top of the list in the US. Dance classes are an effective way to get employees in Latam to sign up, but HIIT classes work better in the US.
Most product enhancement features are rolled out on a global level, in an effort to bring the best-in-class experience to all users. And, while we may communicate slightly different across regions, the end product always stays true at its core: we aim to create a seamless and engaging experience for our users, as well as the most informative experience for our gyms and corporate clients.
3. How did you pick the location for your first sales office in the US? In case you have a distributed sales force, how did you decide on the regional focus of your first rep? Did you evaluate different locations based on function of the sales team (e.g., inside or field sales?)
KH: Having set up a U.S. operation before, we knew how hard the eight- to nine-hour time difference to the West Coast is. San Francisco is extremely competitive and also expensive, and lack of our presence there was not essential to reach the audiences we wanted to talk to. So the East Coast was the right choice for us, and given we’re selling into some of the biggest companies in the world, New York was an obvious choice. New York is now our hub, with remote Sales reps across the US, which is a more common model to operate in the U.S. than in Europe.
CC: When we decided to expand to the US, we also made the choice to establish our global headquarters in NYC. Our initial research had indicated that Houston was an excellent location for operations, hence, we decided to concentrate much of our Customer Service, Business Development, and Operations Teams there.
We are firm believers in in-person meetings with clients and partners, so having a distributed sales force allows us to build relationships that matter most to our business. For that reason, our Sales and Customer Success Teams are located in our NYC, Los Angeles, and Houston offices along with remote employees in Chicago, Atlanta, and other key cities in the USA.
4. How does internal command/control and comms work most effectively when the mothership is in another country? And how much have you had to move the executive team to the US, and why?
KH: Our ambition has been to make the culture in our local offices feel 80% like Peakon and 20% local. What I mean by ‘like Peakon’ refers to the Nordic ways of working, the roots of Peakon. Most often it’s easier to do it the other way around, but we (obviously) are strong believers in a global engaged and connected team, so have invested heavily in making the US team feel part of Peakon, and the rest of the world connected to the U.S. through travel, all-hands communication, etc. We have relocated both a founder, a manager and a few individual contributors, which is having a great impact.
CC: In order to ensure clear communication and result-driven execution, we created distinctions between global functions and regional responsibilities with a purposeful delineation between commercial functions and functional areas. We rely heavily on internal communications, including tools like Zoom and Slack, to share ideas, learnings, and success cases across all regions. We all benefit from each others’ experiences, so it is very important for us to be able to share them quickly and succinctly.
With exponential growth as our key driver, we have had to substantially grow the team — especially when expanding into other geographies. Some of our leaders have moved to launch new offices and countries in order for us to leverage their institutional knowledge about our business and culture. I, myself, am probably one of the more extreme cases of leaders moving to new geographies. From Brazil, where we founded Gympass, I moved to Madrid, Munich, and now New York City — in a span of 7 years. That being said, we also believe it is important to hire best-in-class local talent to ensure that we are addressing the nuanced needs of our consumers while maintaining our brand and culture.
