Expanding into the US is the dream of many European startups, with huge upside potential if it’s a success. But it comes with a fresh set of risks — from trying to expand too quickly to running afoul of a new set of regulations, moving stateside must be approached with patience and careful planning.
Creating that first team in the US is a crucial piece of the puzzle.
“When I've seen companies that have expanded into the US and it's worked for them, they quite often start small — they will pilot, pivot and try things out and see what works, as opposed to going all in straightaway,” Alexandra Wyatt, vice president, innovation economy, at J.P. Morgan, tells Sifted.
While Wyatt advises startups to first think about their individual company, sector, their goals and what they're trying to achieve — and not to “blindly follow” anyone else — here’s what you should think about if you’re looking to build your first team in the US.
Deciding on the first roles
Getting the first hire right for the initial US team is important — as well as the role, it’s imperative that the person is the best fit for the circumstances. Getting this wrong could delay the success of a US launch and create issues within a team before the expansion has even got off the ground.
Having people [in the team] who understand the value proposition and the culture of the company is key.
The first job titles needed for the team tend to be focused around sales to help kick start growth in the new market immediately. Ben Tickler, head of venture, innovation economy, at J.P. Morgan, believes founders must recognise the importance of having people that know the local market.
“Having people [in the team] who understand the value proposition and the culture of the company is key — you've got to marry that local talent with someone who knows the company because they're going to be selling it,” says Tickler.
Signal AI, an AI-powered media intelligence platform and client of J.P. Morgan, launched in the US after its Series A round. David Benigson, its CEO, says the company made some poor initial sales hires that didn't work out.
“We learned quickly (albeit expensively!) that having satellite sales people who weren't fully connected to HQ was never going to work, and we needed to somehow port the culture and a more cross functional team if we were going to make the US successful,” says Benigson.
In comparison, the second attempt worked better.
“One of our top sales people wanted to move to the US — we supported his move and also made an attractive offer to a longstanding customer success manager and a customer support rep to relocate together,” says Benigson. “This worked far far better — we created a nucleus in the US office which understood our culture, values, product and differentiators.”
Hiring from your network
Having hires within the first US team that have a connection to your startup can help to simplify the process.
This was an approach taken by Steffen Tjerrild, cofounder at AI video communications platform Synthesia, which expanded to the US in 2021. Synthesia’s initial US team was just one person, but that person having an established relationship with the business helped Tjerrild feel more confident in the move.
It costs a lot to replace staff, so it’s important not to rush it.
“We knew that this person was a credible individual that was culturally aligned,” he tells Sifted. “We had a previous working relationship with them, so it wasn’t a cold person that we just interviewed and hired for the role.”
This approach ensures that culture fit has already been established among teams — an issue that not every startup may consider when taking the leap over to the US.
“You can hire someone who absolutely understands the US market and has done it before, but could be culturally the completely wrong fit for that organisation,” says Tickler. “You need a really robust recruitment process that takes into account the local needs in the US culturally, the size of the sales market there and also the existing company. It costs a lot to replace staff, so it’s important not to rush it.”
Leveraging partner expertise
Leaning on existing networks is essential when approaching US expansion. Their expertise will help to guide decision making and ultimately help your business reach its full potential.
“Leverage your network and the people who have done it successfully before,” says Ryan Barnett, vice president, innovation economy, at J.P. Morgan. “Leverage referrals for people who have worked with colleagues, too. If you have US investors, lean on them to help with this process as they have likely done this before with other European startups.”
Reach out to your bank, lawyer, investors and network, and try to find a company in a similar space to you — then, ask questions.
It’s smart to reach out to existing partners, such as banks, to utilise their expertise too. J.P. Morgan, for example, has a global innovation economy team made up of over 450 people who serve venture-backed and high-growth companies.
European companies who work with J.P. Morgan are complemented by a US specific relationship team, who are market experts offering support on the ground.
“J.P. Morgan is our primary banking partner,” says Tjerrild. “The scale of J.P. Morgan, especially at the later stage of the company, is allowing us to operate efficiently at a global scale. They have the capability to serve us not just as a scale up, but also into becoming a large global company.”
There is much to consider when hiring that first US team — from the geographical location in the US that’s going to be the first focus to whether to cold hire, hire from your network or relocate an existing employee, the process isn’t one to be rushed.
“Reach out to your bank, lawyer, investors and network, and try to find a company in a similar space to you — then, ask questions,” concludes Tickler.
“Understand when they decided to expand to the US, how big they were from a revenue point of view, how much of this was from the US and who were their first hire(s). Don't try to reinvent the wheel — it’s been done by so many people before you.”
