International Founders Share Lessons From Scaling to the U.S. (Part 2)

This is the second part of a series on lessons from non-U.S. founders who have scaled in the U.S. I spoke to two founders at different stages of U.S. expansion. 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, brought the company to the U.S.

In the first part, they told me an overview of their operations in the U.S. In this part, I asked them about tailoring sales techniques, hiring, investor relations, and mistakes.

1. How have you had to tailor your sales techniques to Americans? Any cultural differences? Aside from in the US everything is “awesome!” and no one likes to give a direct “no.”

KH: Yes, we definitely have to put away the European politeness, sharpen our pens and be more bold!

CC: In the seven years that we have been expanding Gympass into other countries, every CEO, CHRO and HR Executive in the different countries we operate inevitably place high value to employee wellness.

We have found that in the US is no different, companies place a high priority on employee wellness. When we present Gympass as a convenient solution that will help their employees live healthier lives, be more productive and engaged, prospects understand and appreciate the value of our product. It was not about the difference in value proposition, but more about listening to our clients and understand their priorities, position our offering in light of this and building those relationships.

One aspect that is different in the US is the user expectations, that are often higher than in other markets. This has been an excellent driver for us to aggressively invest in product improvements such as enhanced class booking, UX, and third party integrations.

2. Obviously the US is super competitive and expensive market to hire in relative to Europe and Latam. Are there better places that you’ve found that are better than others to hire within the US?

KH: The war for top talent is fierce in every market, and the US is no different. But the talent here is also very impressive. Actually I think European companies brings a lot in terms of culture, and the way we think about a company and our employees is very compelling, and often different. My main advice is to hire a local (great) recruiter who understands the market, the prices and how crazy fast it moves.

CC: As a mission-driven organization, we have found that our goal of defeating inactivity by helping people find an activity to love has been a key lever in recruiting and hiring top talent who are aligned with our purpose. We have also found that, in terms of geographical location, Houston is an excellent hub for our US operations while New York has served very well as our global headquarters.

3. How important have your investors been in helping you scale in the US? And what advice would you give to any other European or Latam founders in terms of thinking about their future investor composition?

KH: The experience and guidance from the board members have been essential and invaluable especially to help us fast track decisions. But as far as the winning in the U.S. goes, no investor can just wing it for you. That’s on you.

CC: Our investors, including Atomico, have helped us in the US in many ways. They have been instrumental in introducing us to prospective clients, helping us acquire top talent, and guiding us on product development and AI initiatives. My main recommendations to other founders pursuing future investment compositions are: stay true to your mission, values, and aspirational goals; choose investors that can complement gaps and support in your growth ambitions; and think beyond just regional boundaries to what your company really needs and can achieve.

4. What are the advantages of being a non-U.S. founder/non-U.S. company in the US? Is there any innate strength you think that this gives you?

KH: I don’t think you get any credit for it as such. You’re one of many startups here, and the US market want to see the success of native brands. That’s what you need your ‘cute accent’ or European charm in the early days, and of course a strong solution to offer.

CC: One advantage we had after starting in Brazil and then moving to Europe is that we were able to test our business model and product before entering the US. With the successful launch of Gympass in two other regions, we knew that we had a tried-and-true value proposition that would resonate when we entered the US market. Of course, we are flexible enough to adjust where needed, but we knew what our north star was and were confident we could get there.

5. What is the biggest mistake (or learning) to date that you’ve made in going into the US market?

KH: We thought we could hire and manage teams day to day from Europe. You cannot.

CC: When we entered the US market, we established five fully regionalized General Management structure with five Gyms and Corporate sales teams each focused on one of these regions. In theory, this made sense since we were covering the entire country geographically and wanted to have a focus in each of the largest 5 markets. However, this approach demonstrated some inefficient as we were not optimizing for the country as a whole. Hence we adjusted to centralize operations in NYC and Houston and have have the sales team across the country focused on their territory.

Hence, our main learning (and advice) is to enter the US market with centralized operations in one or two locations and scale it over time.

6. What one piece of advice would you give to US founders scaling the other way around, into Europe?

KH: First of all, do not underestimate your own market potential but when you decide to move across the pond, carefully consider which European markets you want to go after first, and embrace the cultural differences. South and North, East and West of Europe are operating differently — they differ in size and maturity — so don’t assume that the US model can be just duplicated. This is not exactly the best way to scale your business in Europe.

CC: In my view, all countries in Europe have their own ways of operating, as such their needs shouldn’t be lumped together. There’s a level of finesse and understanding that is required in order to ensure that the product offering resonates with the intended audience. While countries in Europe might not be as large as the US, from a geographic standpoint, each has its own specific market dynamic that should be accounted for. The biggest hurdle in expansion is assuming a “one size fits all” approach to the market.