“Do it yourself or don’t do it at all:” Why you have to send a key member of the European core team to the US
When it comes to scaling a B2B European company in the US, having a core European executive on the ground is crucial for success. We’ve seen a variety of challenges arise over culture misalignment, organizational behavior, and decision-making expediency in companies without a co-founder or executive from HQ in the US. If you’re expanding to the US, have a strong answer to this key question: Who will relocate?
From our conversations with over 50 VC-backed CEOs in the US, we learned that the consensus around one particular issue is clear: CEO and/or Founder DNA is a necessary — if not sufficient — condition for success in the US.
When asked about the #1 insight that CEOs tell other entrepreneurs about entering the US, the most cited phrase was a variation of “a founder has to move to make it work.”
“If it is your most important market: send a key member of the core team. Don’t hedge. Commit.”
Rhodri Thomas, SwiftKey
It’s a point worth emphasizing, given its outsize importance to your success at home and abroad: If you cannot spare a key member of the team, the domestic business is likely not ready for the expansion; if you cannot have a key member of the team on the ground, the US operation is likely to suffer on a variety of fronts:
US customers will be less likely to trust you — Market credibility and signaling commitment are important given the level of competition in the US. All things being equal, Americans are more likely to purchase products and services from local companies.
The absence of key executives on the ground signals that the US is secondary and raises questions about the company’s commitment to the market long-term. Ultimately, Americans love an underdog story, but they want to hear it from the hero’s mouth.
“Take the culture piece seriously — you need a founder in the US.”
Alistair Paterson, Digital Shadows
The internal culture is likely to diverge (and suffer )— Culture is critical for hiring, retention and brand identity — and consequently critical for your success as a company. It takes intentional and concerted effort to model it and incentivize its healthy development and it is a mistake to assume the culture you’ve built will transition to the new office seamlessly.
Without a co-founder or key executive who can be deliberate about transplanting it to the new office, problems can arise while productivity and engagement suffer.
Problems such as resentment towards different pace, style or substance of work; frustration with decision-making processes (especially if revenue breakdown shifts in favor of the US office); feeling disconnected from the team; misalignment with company priorities, are all more likely to happen without founder DNA on the ground.
Frequent travel in and out of the office is not a perfect solution either. Executives report that the culture was one when they were present, and another when absent.
“A founder HAS to move to make it work.”
Peter Hames, Big Health
Communication and decision-making will be a challenge — While collaboration tools have improved and video calling and project management software are having their best day yet, those tools are most beneficial for well-defined, structured and agreed-upon projects. When it comes to defining, structuring and agreeing on projects, remote tools still fall short of the benefits of in-person communication and decision-making, particularly in situations of scarce resources and important trade-offs. Company building is about prioritization, and prioritizing in the midst of different contexts is much harder.
In short, if you cannot spare a key member of the team, the domestic business is likely not ready for the expansion. If you are expanding, what is your plan to mitigate these shortcomings?
To read more about critical considerations when expanding to the US, see our full report here.