I recently had the pleasure of participating in an Ask-Me-Anything (AMA) discussion with members of the Cloud Software Association. The Cloud Software Association has over 2000+ members spanning the SaaS ecosystem including SaaS vendors, platforms, API services, resellers, distributors, and investors.
Many of the members are based in the US and a common theme related to B2B SaaS expansion into Europe.
The following represented some of the key questions and themes I addressed. Given the nature of an AMA the responses are ‘quick fire’.
What do US SaaS companies need to think about when looking to expand into Europe?
There are a lot of things to think about. We perceive the main trading blocks as being very homogeneous i.e. USA, China, India (similar language, currencies, tax laws, etc). However, In Europe things are very different:
Most of Europe uses € , the biggest market (the UK) is in £
We have 24 ‘official languages’ in Europe (in reality English is commonplace)
All countries are not alike - from a SaaS point of view the UK is ahead by some margin, followed by Germany. SaaS adoption is much lower in other countries.
Culturally Ireland and the UK are the closest fit to US culture.
B2B SaaS experience is in short supply and hiring can be challenging particularly for unknown SaaS brands.
Finally, the main SaaS country (UK) is about to leave Europe (Brexit)
The main SaaS hubs are (Dublin), Ireland, (London), UK, Berlin, (Germany), Lisbon, (Portugal) and Amsterdam (The Netherlands) although pretty much every other capital city is positioning themselves as being SaaS hubs.
So what to think about?
Does your SaaS application support remote selling or do you need boots on the ground?
What resources have you allocated in $ terms?
Will you need to bring someone over from the US to set the culture if yes who?
Would an acqui-hire of a small EU company make sense?
Which city / country meets your requirements (skill base, culture, tax regime etc?)
Any Brexit impact?
Who can support your Market Entry efforts?
Localisation (Pricing Page €/£/$) based on IP detect
Localisation (recommend you do not do bespoke languages for different countries given significant maintenance costs - ongoing)
However when it comes to selling into Europe
1/ UK is the key market (Germany a distant second) Use Google Analytics to validate for your company
2/ Route to market via Linkedin and Google Ads + Outbound e.g. Cognism
3/ Partnership opportunities if Enterprise solution (ticket price is high enough to support)
The good news is a typical Tech stack for most SaaS companies will include some / many US applications so you can learn from how these gained traction (API access to these also helps) :
Wix/ Webflow/ Squarespace
Intercom (EU)/ Drift
Mailchimp
Basecamp/ Teamwork (EU)/ Trello
Pipedrive/Insightly/Salesforce
Xero/Sage/Quickbooks
Slack
Zoom
Stripe/Zuora
SEM Rush/ AHrefs/Uber Suggest
SaaStock the flagship SaaS event in Europe (Ireland October 2020) is well worth attending
What is the context like in Europe for SaaS companies?
1/ Much more fragmented market
2/ Will likely be competitors in your category (but they are usually much smaller)
3/ Resource constraints - raise less at each round, higher cost of acquisition
4/ Smaller team sizes
5/ SaaS ecosystem more immature
6/ Small domestic markets for many so they need to think International from the get go e.g. Finland, Ireland, Portugal, The Netherlands
What are the main differences between Europe and the US when it comes to SaaS?
US companies raise more $ and thus have more resources (people + sales/ marketing budgets)
Much larger domestic market in the US i.e. North America 350M + incl Canada v Ireland 5M v UK 66M
More immature ecosystem (VC’s to lawyers to journalists) but gap closing
Smaller budgets for new stuff
EU not a homogenous market like the US
More risk averse when it comes to tech adoption
How do you see public relations fitting into the SaaS marketing mix?
I think PR is definitely important. Mark Suster a leading US VC talks about the Silent Benefits of PR in a great post on the topic. Again it comes back to resources and prioritization.. I think prioritization is really a key issue for marketing leaders. There is so much we can do and we are making decisions in the context of profound uncertainty. PR needs to be there - but it has to be measurable and with specific goals attached to it.
Hi Alan; Our Europe GTM model is focussed on recruiting partners that fit a unique Professional services based profile. Do you see any role for boutique Distributors that could help jump start our in country, or regional [ Nordics for example] new partner recruitment?
For me a couple of issues are key here. 1/ Is there enough cake to really incentivise the partner? 2/ Is there clear pent up demand as distinct from an expectation that they can drive significant lead gen themselves? 3/ How complex is the sale incl sales cycle length? Partners can be a great route to market - I'm probably less familiar with it than others on here. We've struggled to make it work in Europe with some of my clients for some of the above reasons. In terms of the Nordics the market size is pretty small so your addressable market is small but if it is an area with demand a local partner will be key here, Otherwise the transaction costs will be too high and nuances will be missed re language / currency/ domestic regulations/ local competition etc
Hi Alan, thanks for doing this AMA. Since you've worked with both EU and US based companies, do you have any advice for EU based companies looking to expand their footprint in the US?
I actually wrote a blog post on that called: Top 10 Tips for B2B SaaS Companies to Accelerate US Market Entry
Alan Gleeson is a B2B Marketing Consultant based in London with a passion for helping SaaS businesses to grow.
Alan works with a number of US clients on their European expansion plans. Feel free to get in touch to discuss your requirements.
Follow Alan Gleeson on Twitter or visit Work With Agility to learn more.
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