Scaling US Technology Companies in Europe

CEOs mustn’t assume that the European market is all the same because it isn’t. I recently spoke to GSinsight Magazine about scaling US technology companies in Europe, the challenges this presents and offered some advice to overcome them.

I spent my formative years at Oracle in the 1990s when the business was growing fast in Europe. In the early 2000s, I left Oracle with a group of colleagues to establish Salesforce in Europe. At first it was just the three of us in an office, with three laptops and that was it. During my ten years there however, we grew the company from nothing to a $300m run rate.

I now find myself in the start-up environment once again with XANT. I joined as the first person in Europe and we’ve so far grown to a headcount of around forty. We’ve got a data center and telephony center in Ireland and are due to open a data center in Germany, whilst our first full year in operation saw us grow by just under three hundred percent.

The Current State of the European Market: GDRP and Tech

The main issue that entrepreneurs are dealing with today in Europe is the General Data Protection Regulation (GDPR). I fear GDPR may go too far and could act to ultimately slow expansion and negatively affect European economies. Ironically, I think GDPR is a case of closing the barn door after the horse has bolted.

As individuals, most of us already fully consent to give away our data, we do it with everyday things like Google, Facebook or Netflix.

One positive effect I’m hoping GDPR will have however, is to homogenize the diverse legislations of Europe that hinder many early stage companies when it comes to effectively doing business across borders. If it doesn’t achieve that then I think it has failed.

Despite GDPR, I believe there’s a new wave of technology entrepreneurship in Europe. This is partly evidenced by the rise of European VCs but more importantly, the extent to which US VCs now invest right across the continent. Whereas, they used to land in Britain or Ireland and then sweep East, they now see greater opportunity all over Europe.

This, I believe is due to the growing liberalization in European countries who have become more open to Foreign Direct Investment (FDI) – money coming in from the US and the ways in which that money can stimulate the economy.

The Challenges Posed by the European Market

As I mentioned, the European market isn’t all the same. However, it’s important not to over fixate on cultural variations. If you land in the UK and are successful, don’t assume that means you’ve cracked Europe, because some things such as language and legislation are not homogenous.

To overcome these sorts of challenges, CEOs must use their network, talk to people they know, who have done it and know what it’s like.

One thing I’ve seen go catastrophically wrong is when a business tries to land all across Europe. Don’t think you’re covered because you have a salesperson in every country. That will almost certainly fail because you won’t be able to build any cohesion and some individuals will almost certainly become detached from the organization, its culture and processes.

My view is you should find a single location to start from and then test continually into different markets.

The Talent Market in Europe

The European talent market is certainly becoming more competitive. It’s getting tougher and tougher to find good people.

I’m not seeing an explosion of growth in the number of people coming into the sales profession. The barrier to entry at the lower levels is almost nonexistent, but it’s much harder to find the best people at the top of the profession and it’s very expensive.

I encourage you to read the full interview for GSInsights.

It includes views and advice from reputed general managers such as Matt Piercey from Zscaler and Ian Tickle from Domo.