Transacting in the French market: the do’s and don’ts Israeli startups should have in mind before getting started
Penetrating a new market when you are a foreign actor is always a challenge, yet getting well prepared ahead can be a game changer. For Israeli tech startups, who usually feel very comfortable doing business in the US market, entering the French market can represent a real obstacle within their larger European expansion. Here are the key items on our Maor’s winning checklist to transact with France:
1. Getting introduced to the French Market
Do — Get formally introduced to the French ecosystem
Just like it would be advised before transacting in any foreign market, take the time to find the right contacts close to the French culture. If you know business partners or contacts of contacts, kindly ask for a French go-to-market support discussion to see whether they can act as wingmen and door openers in a field you are a stranger to. If you are not at all connected business-wise to the French market, hire or collaborate with local salespeople who will not only provide that French culture understanding, but who will also and more importantly help you overcome the language barrier which can today be a real pain point if you aren’t a native French speaker.
Don’t — Blindly unleash your foreign salesforce
All markets have their own cultural heritages, social codes, and working principles. But be aware that the French market is relatively small and concentrated, where most big players know one another and talk often. A reputation is built fast but can also be damaged faster. In addition, even though English is spoken more and more at a professional level, you can never assume that your local interlocutors will be fully proficient and comfortable conducting meetings in English. Make sure to anticipate ahead before sending your salesforce in an unknown market; if you approach the market too quickly without being familiar enough with the local culture, you may do a business ‘faux-pas’ and it could cost you a hard stop for your French expansion.
2. Grasping the competitive landscape
Do — Master the competitive landscape — local & global
Do your research on the industry numbers and trends in France and in Europe (as many French actors operate in several European countries), be familiar with the local players who have similar solutions to yours and be prepared to formally defend your key differentiating points vs French players or industry leaders. Unfortunately, you may encounter a strong ‘not invented here’ mindset where French decision makers will naturally prefer to engage with local players instead of adopting external technologies. This is why you must have your key differentiating points ready and really anticipate the introduction, thinking of ways to make your case stronger — such as by offering a co-creation approach (involving your customer as a partner in the implementation process to offer a fully customized product) or by creating a strong sense of urgency in case direct competitors are already leveraging a similar technology. Expect French actors to be very aware of their market and industry’s latest trends/ numbers.
Don’t — Assume Europe at large = France, or vice versa
Even though European cultures can appear similar in terms of social behaviors, consumption and adoption trends, there remain very clear distinct business etiquettes per country. If you have started doing business in Europe in another country than France, it will give you credibility (as the market will be more similar to the French one vs the American or Asian market) and your learnings and experience will be valued. But really keep in mind that numbers or success from Spain or Italy will not guarantee the same results in France and fully consider France as a market of its own.
3. Choosing the right targets
Do — Know your audience “What’s in it for me”
Know the business model and the key financial elements, the core business activities, the industries of interest, the leadership vision & the business strategy of the actor you are trying to get introduced to as to anticipate your audience’s expectations and strategic roadmap. Make sure you already have deployed your product/solution/service in the industry the target operates in any other market. As a foreign actor, your credibility and legitimacy will be exclusively established by the references that you have in the industry and the proof of concepts you have delivered.
Don’t — Force an introduction that isn’t hyper relevant
Do not try to force an introduction with a French target that doesn’t look relevant for business as of today (bad financial health at the time, strategic priority on other burning topics, just signed a partnership with another industry leader,…) or that is in an industry / sector in which you haven’t yet operated. It will always be safer (and more credible) to penetrate a new vertical/ sector in Israel or in the US rather than starting a new one from scratch in the French market, because of the commonly shared aversion for risk.
4. Working for an introduction
Do — Invest in a bi-level approach
From our experience with the French market, it is much more valuable and constructive to prepare an approach strategy that targets in parallel operational teams as well as high-level decision makers. As your sales force works on creating an operational need by approaching end-users of your solution, your business network can help you get introduced to leaders at an upper layer in the C-suite. Securing both approaches will help create traction internally and ensure that when the leadership includes the field manager in the business discussion, the need and excitement for your solution is unequivocal.
Don’t — Only target C-level or operational teams
In the French culture, if an external solution is pushed from top to bottom by the leadership, you cannot control how the operational team will perceive that push (often can lead to teams’ skepticism). If you solely target the leadership, you may encounter individuals who are too far off from the real operational needs and may not understand the painpoint your solution solves. Or who may not feel legitimate in pushing to their operational teams a solution they don’t fully grasp. And on the other hand, if you only approach the operational team, you may waste a lot of time by convincing users who understand your solution and would love to use it but who are not at all in decision-making positions.
5. Delivering your business case
Do — Be quantitative & concrete, straight to the point, synthetic
Attitude matters. Once again, going back to the codes of the French culture, you will be expected to make your case in a time record. Prepare a short commercial deck as a light intro support to your product, including content specifically tailored to the French target you are pitching it to. Be ready to be challenged on numbers, benchmarks and quantified added value from your solution. Know your case studies by heart and have the ones that are most relevant to your target already prepared with key numbers to illustrate the value added. If possible, leverage any local flagship customers you may already have; this will be your best asset to objectively have your solution’s added value proven by other French actors.
Don’t — Be commercial. Or vague. Or too familiar.
In France, selling and being commercial when you are pitching in front of an audience is expected to be subtle and implicit. The culture, usually known for its quite high-risk aversion, natural skepticism and usually slow adoption/ conversion to new products, will require you to be concise and confident while remaining discrete and humble. Another very important point is regarding the attitude and language you adopt: know that appearing too familiar or too comfortable, as much in terms of elocution as in terms of body language, can be enough to discourage your target from pursuing business discussions with you. Being too casual will kill the deal. Same warning goes for appearing too insistent and too sales-driven, where pushiness will instinctively push away your target.
As you approach the French market and keep these key points in mind, be also aware that decision cycles are longer than in other cultures, due to complex hierarchies, numerous stakeholders’ approbation needed, and greater delays between responses. If you intend to build a real partnership with a French player — that goes beyond a simple business relationship — be ready to invest time and resources. A key enabler will be a powerful, agile and fully available sales force, locally present on the field, in order to build and to nurture the relationship.
Are you a mature, forward-thinker and industry disruptor already doing business in a large market like the US, and looking to take your Israeli tech at scale in Europe? At Maor Investments, we proactively help tech startups — within and beyond our investment portfolios — transact within Europe, and within the French market in particular. We pride ourselves on our core value proposition and differentiation: to be more than an investor — a guide for Israeli actors as they take on their European market penetration.
If you’re a growth-stage Israeli tech startup interested in talking investment opportunities and Business Development in Europe, let’s start a conversation!
