Startup Expansion Via an Office in Europe

After successfully getting a Software-as-a-Service (SaaS) startup off the ground in North America, one of the natural tendencies is to start thinking about world domination, starting with an expansion office in Europe. London, due to its large population center, English speaking people, and easy transportation is a common choice for a European office. Startups often make the mistake of trying to launch a European office too soon and are better off waiting until they can fully fund it.

Here are a few things to keep in mind with setting up an office in Europe:

  • A SaaS company should typically have $10M – $30M in recurring revenue to have enough scale and resources to fully invest in European expansion
  • Ideally a handful of customers will already be in Europe pre-expansion so that they can help out by acting as references to future clients as well as be case studies for the region
  • An easy way to get started is to hire one or two full-time contractors to work remote from London and have them be part of a department, just like a team member in the office
  • Many entrepreneurs in London and other cities specialize in helping North American software companies expand through a joint venture or via a subsidiary
  • One approach is to find a team member that’s been on your team at least year that wants to move to London for one to two years and set up the office, as well as ensure a consistent culture develops (most important!)
  • Sales, marketing, and support are the most common functions for an office in Europe with sales being the dominant one

We’d had a London office now for almost 18 months and it’s worked out well following some of the ideas listed above. Europe is a huge market that’s ripe for startup expansion.

What else? What are some other things to think about when opening an office in Europe?

2 thoughts on “Startup Expansion Via an Office in Europe

  1. Good pointers David. Having lived and worked in continental Europe for most of my career, I would add that even though the UK is your natural launch market for Europe for all the reasons mentioned, you should still try and create a multi-cultural team in the UK.

    Having a 100%, mono-cultural and mono-lingual anglo-saxon team will simply slow down the inevitable move to continental Europe and make it less effective. Plus, there will always be the odd mega-opportunity in France, Germany or Switzerland that a multi-cultural team will be far better positioned to exploit through a combination of local contacts and cultural fit.

    In general US vendors that open shop in London don’t take this into account. They should.

  2. London is great. But, it’s expensive and not the only choice in the UK. Liverpool and Manchester are viable options. Look at places such as the Daresbury Innovation Center (http://www.daresburysic.co.uk/) for a soft landing. Further, a local consulate such as the one here in Atlanta may have UKTI personnel who can make a move near cost free. Also, if you can find an American who has done this before, hire them to take it forward. The biggest problem with a move to Europe is “translation” keeping in mind that “England and America are two countries separated by a common language”.

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