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It’s time to move to the US

I’ve seen founders have this conversation with equal amounts of excitement and trepidation. They know that there’s a new world on those shores. But moving your company and your family to a new country, across time zones, is daunting.

How do you move? It can’t be as easy as packing your bags and getting on the next flight. A founder I know, let’s leave them unnamed for now, is facing this exact challenge. I connected him to a few people who had made this move. And I thought this is a challenge that many young entrepreneurs face. In the SaaS ecosystem, we love creating playbooks and guides. It helps peers make sense of abstract problems. There is a sense of community here. And the community pays it forward. Not just for help, but with a slightly selfish motive that a rising tide lifts all boats. So, if the market grows, all companies in the sector grow along with it.

In India, SaaS companies have started to find their legs. SaaS generates revenue of about $3 billion each year. Younger and younger companies are moving to the US because the market opportunities there are bigger. But there are mistakes that one can make when chasing opportunities. So, I decided to talk to two friends. Two founders who made a successful transition to the US. I spoke to Raj Sheth and asked him about his learnings when he moved Recruiterbox to the US. And Vinod Muthukrishnan, who was the CEO of CloudCherry when it shifted base to the US.

The reason I picked Raj and Vinod is that not only have they made this move but they’ve also been helping founders navigate the American waters and have figured out how to make a successful transition.

Should you move now?

Customer behaviour has changed. Culturally, the buying process has changed. Smaller ticket size sales can be done remotely. Raj Sheth

Raj, who has invested in a few companies as an angel, says founders come to him often with this question. Every case is different, so he goes through the following framework with them to determine what can be done remotely and what warrants a move to the US:

Product: What is your product? Is it a bottom-up self-serve product or a top-down sales-driven one?

  1. A product-driven go-to-market strategy can get a lot of stuff done remotely if you don’t have a sales team in the customer time zone or have synchronous overlap with your customer. We have seen a lot of non-sales model product companies scale without having an early presence in the US.
  2. Contrast this to a top-down sales-driven enterprise product sold to named accounts in the US, with a US-based sales team. This might be good to have founders or senior leads present in the US to learn from customers and make sound recruiting decisions.

Raj says that there’s no one formula. The strategy is always decided based on a combination of reasons, including the ones mentioned below. Different companies have done things differently, made their own choices, and scaled impressively. Raj says that these points should be seen more like a checklist. Something to assist you in formulating the plan.

Raj Sheth — Ex-CEO of RecruiterBox & Flydata

Funding: Two questions. Is your company bootstrapped or funded? And if you looking to raise funding, should you be raising it in India or in the US?

  1. If you are raising money in the US, or wish to go through the incubator route (Y-Combinator) then the answer is easy. Some have taken this path and moved early to be close to investors and early customers.This path makes sense if your customers are in the Valley and if you are hoping to raise a round there. This used to be a chosen path 10 years ago, says Raj. But with the fast-evolving VC ecosystem in India, founders have options. India, Raj adds, is doing rounds at par with the US today.
  2. And if your company is bootstrapped and if you intend on staying bootstrapped then your P&L may not support a move to the US, anyway. The decision has already been made for you.

Customers/Partners: Who are they?

  1. So most of your customers are in the US. But that isn’t reason enough to move. First ask yourself, who are you selling to? Are you selling to SMB and mid-market companies? If the answer is yes, then you may not need to move. These customers are now used to buying software remotely. A change that has gradually happened in the last decade, it is easy to service customers from other countries. Your geographical location is hardly a barrier in making SMB/mid-market sales.
  2. However, if you are partner or channel-dependent, then it may make sense to cultivate relationships by travelling often or being based out of the US.

Team

  1. If you are going to hire a senior team in the US, even on the go-to-market side, then it may, once again, make sense to be travel often. You can move to the US while your company is in its critical stages, and wait till the team settles in and till you achieve product-market fit. Once both the goals are accomplished, you can decide if you want to stay put or move back.
  2. The only exception to this is if you already have a trusted senior team member you have worked with in the past present in the US.

Increase the chance of serendipity

Vinod has a theory. Serendipity is math. Actually, specifically statistics. Let’s assume you wanted to win a lottery. Now, we know the odds of winning a lottery in real life are infinitesimally small. But let’s, for the sake of this hypothetical scenario, say there were just 1,000 tickets instead of 1 million. If you bought 10 tickets, the chances of winning increase.

Chance meetings are the same. If you live or frequent an area where most of the people you want to stumble onto live, you will end up meeting them. But you can’t just bump into the VP, sales of Salesforce by frequenting a few coffee shops. It’s slightly more nuanced. It is the location and the ecosystem.

Let’s explore the concept of an ecosystem a little more.

An ecosystem isn’t an external body. It is everyone. Your friends, your investors, your neighbours. Everyone is part of the ecosystem. Learn to use it. Vinod Muthukrishnan

But building this ecosystem takes effort. Think of it as a jalebi, he says. You start in the middle and keep expanding the network. You meet two people, you use those two connections to find two more, and so on. And slowly, your network grows. With the help of this network, you can reach out to interesting people who you wouldn’t have met earlier. This requires some hard work.

“You have to be ready to meet people. Don’t think of it as having an end game. Meet people just to learn about them and their sector. You don’t know how it works out,” Vinod says.

But there are networks that exist, which sometimes founders forget. Vinod says that this former colleague you worked with, people you had a sales conversation with and things didn’t move, they’re all part of your network. “If you’ve moved to the US, I am assuming, you’ve raised some capital. It means there is now incoming interest in your company from other investors. Use that.” Not all VCs are sources of capital, Vinod says. Some can be a source of connections.

“If VCs are truly founder-first, ask them to make introductions and connections to companies in their portfolio. If the firm is really interested in you, they’ll help you. This means you grow, and you add value to their portfolio, so that grows. Everyone wins,” Vinod explains.

Optimise, optimise, optimise

Vinod says when he got to the US, he made a mistake. He moved to Pleasant Hill. It was roughly forty-five minutes to an hour away from Palo Alto. Conceptually, that’s not too far. “But it rules out serendipity,” he says. Let’s explain this further.

Let’s say you have been planning to meet an interesting entrepreneur. You try to set up a coffee meeting. You can’t set up a time that works for both of you. “But one day you get a call. ‘Can you come down to meet me for coffee in an hour? I have 15 minutes free.’ What do you do? Do you drive down for 15 minutes? It makes no sense,” Vinod says. That’s because you’ve optimised for the wrong reason. You’ve optimised for rent and a quiet neighbourhood. But you haven’t optimised for your business. And Vinod says that’s important. You pay slightly more but stay in the area. This makes things easier when you have to make such quick decisions. “If you have to drive 20 minutes, that decision is easier to make,” he says.

Every time you come to a fork in the road, ask: does this optimise my time? Can I do something else with this for the company? If the answer is no, then let go of the time thieves. Vinod Muthukrishnan

And that’s how you think about moving to the US too. There are times people believe that moving to Austin, Texas is a good idea. Tesla moved there. So could I. Vinod argues that founders should move to Austin or Utah or Arizona if they have maximised their network in the Bay Area. If they believe they have made such great progress that even if the entire team was having a remote conversation, the sale would go through. If you don’t have that confidence, stay where you are. Optimise for access.

Vinod Muthukrishnan — VP / COO Webex Customer Experience

Who do you hire first?

Now, I’ll be honest. Raj and Vinod have different points of view. And there’s nothing wrong with either. There are different schools of thought. I am presenting them both to you. You decide which one makes sense.

  1. Sales motion

Raj believes that before founders land, they should make a sales hire. In fact, make two sales hires. (Raj is from Mohit’s school of thought. Mohit did an excellent piece on making your first US sales hire. I would recommend reading it. It’s worth every minute.)

Raj believes that once you hire two executives, you build in redundancy and that will help you kickstart the process. But don’t hire a sales leader. “You have to be the sales leader. It’s important that every founder sells. It doesn’t matter if you lead product or engineering. You need to make the first few early sales, so you know what the customer is saying,” Raj says.

If you chase a sales leader, Raj says, this mythical person won’t just join and magically know where the bottlenecks are and know how to clear them. “The founder needs to be able to identify that.” It doesn’t mean you should never hire a sales leader. It just means that the hire comes later. “And when the hire comes, it should be initiated in a coaching capacity. Think of it as a player-coach. They play a little, but for now, they’re coaching you and the executives from the sidelines on what to say in different circumstances,” Raj explains. Once the sales executives are trained, founders should move out of that role and hand it over to the sales leader.

Founders should be involved in at least the first 20 to 30 deals. This gives them enough data points on how to make decisions. Raj Sheth

2. The marketing motion

Vinod agrees that there should be a team in place before founders land in the US. “Can you imagine being alone, without a brain trust in the office? It’s not healthy. Don’t do that.” He, however, doesn’t believe that the first hire should be a sales hire. He believes that it should be a marketing hire.

This is his argument.

Let’s imagine you decide to make a sales hire. Let’s say this hire has worked at Salesforce and her biggest client is Home Depot. Do you really think if you poach this hire, Home Depot will leave Salesforce for your solution? Don’t hire on the resume. Hire on the way this person has moved up the ladder. But before you hire a salesperson, hire a marketing person.

Here’s why. Before you sell, you need to understand what you’re selling. We come with a very India-centric view of the world. The marketer asks, who is the customer? Do you know if there are policy problems in your sector in the US? How do you solve them? Do you know what CIOs like? How do you talk to them? They’re talking about PR. The thing about public relations is that it’s like SEO but free. It is organic. It brings people in. It tells your story. You need to invest in it from Day 1.

And once you’ve done that you make your sales hire.

Now, how do you define this salesperson?

There are two types of salespeople:

Hunters: They’ll find people on LinkedIn. Call up friends and colleagues and ask for connections and introductions just to get in the room. They hustle all the time.

Fulfillers: They sound and look like Hunters but they are people in companies, where they get baked leads. Someone brings the customer to the door, these people close it. You need to understand how to differentiate between the two.

You need both. But you need both at different times in your company’s life. The first hire needs to be a Hunter. When you have a large sales team, you need fulfillers. Closers are as important as Hunters.

But don’t think of sales as instant noodles, Vinod warns. Sales is more like making biryani. It takes hours to get it done right.

Your investors may expect you to start closing deals as soon as you land in the US. Push back. There’s a gestation period here. Take your time. Vinod Muthukrishnan.

Give yourself time

Raj says, let’s assume you’ve done all of this and you’re in the US. You network. A lot. Raj says that when he got to the Valley, the first thing he did was meet customers, investors, and incubators. And all of them gave him feedback. Feedback that overwhelmed him. He didn’t know what he could do. Small failures disappointed him. He wondered if he had wasted time. Moving to another country, even if you’ve lived there as Raj had, is difficult. You need to be patient with yourself. It takes time to adjust to the hustle, to a different type of culture. But if he could go back in time, he would understand who he should take advice from. Find the right anchors who understand the business and the move. And start there.

Also, there is the physical aspect of moving to the US. Raj’s co-founder had never lived outside India and was not used to how cold the Bay area could be. “He came to visit once and was put off by how cold it always was,” says Raj. This will happen to founders. The important thing is self-care.

Vinod has a similar story. He said he paid himself less because he wanted to save money for the company. But living in discomfort will only slow progress for the company. Founders need to take care of themselves first.

Emotional health, lest we forget, is as important as company health.

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A founder-led VC working with early-stage startups building global companies. $250K to $3M in capital & a global network of 150+ operators for startups to win!

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Avinash Raghava

Avinash Raghava

Building @ScaleTogether, Founding Volunteer at @SaaSBOOMi | Past: Community Platform Evangelist @Accel_India. Co-Founded@iSPIRT(@Product_Nation), @NASSCOM

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