There is no instant recipe for breaking through from the Czech Republic to the United States, and more and more domestic startups are convinced of this ambition every year. One of them is the Czech startup Enehano Solutions and its director of Expansion and Business Development, Zuzana Maderová.
For CzechCrunch, Maderová exclusively sends her notes and insights on how to succeed with a product or a service in Silicon Valley, and what to watch out for during expansion.
“It’s quite possible that you have been looking at foreign markets and wondering whether to go from the local comfort zone to the unknown world.
As is well known, there are many reasons for expansion. Aside from the huge business opportunities that open up to you, just stepping out of your comfort zone and forcing a change in thinking about business, marketing and the whole business in a foreign country is incredibly valuable. Paradoxically, this step into the unknown can help you a lot at home because you can apply the acquired knowledge from the world to the Czech market.
But how do you know if your startup is already ready for expansion? I know very well that it is not easy; there are no generally valid guidelines and it varies from service to service and from from product to product. One of the ways I have worked is to discuss your idea with those who have gone through something like this before you. For example, in networking at events that take place in the Czech Republic. Among the closest I can recommend are Basecamp Prague, Startup Festival at the University of Economics, Brno SaaS Movement conference, and Slovak FutureNow Conference.
In any case, before deciding on expansion, it is important to have a successful case study in your country that you can rely on. It must be certain that the company must be truly motivated and united in order to fully concentrate on such a step. If this basic prerequisite is fulfilled, you have already made the decision and have done good market research and softlanding, be sure to start preparing expansion in the Czech Republic and set your expectations and goals to be consistent with your home office.
If you are going to the United States, then carefully consider which state will make the most sense in your case. And last but not least, prepare an estimated 700-800 thousand crowns (~30,000 USD) as the initial investment for the first six months.
Previous Silicon Valley scraps
If you have all this and have come all the way here, I have prepared some specific tips on what to prepare for and what to watch out for when expanding with both a product and a service. I focused on four key areas: marketing, sales, delivery / CX (customer experience), and team.
Expansion to America with a product
Marketing: The product is easier to define a UVP (unique value proposition). Within the product, you can also focus on a certain vertical to choose the right marketing channels. In marketing, you can do a variety of support activities through expert content management, Facebook advertising (depending on the business focus), or create podcasts with professionals in your target market.
Sales: Depending on the price of the product, it is necessary to determine whether it makes sense to do inbound sales, outbound sales, or a combination of both, each of which naturally requires different experience and knowledge.
The difference between outbound and inbound is determined by the average value of the customer, because it is necessary to calculate what the value of the trade will pay you at the end of the day.
A sales plan is easier to do for a product than for a service because, despite each market is different, product sales behave very similarly in each market. So, you can take the average sales funnel and time to close a deal from other markets and apply it to the US market. This is a great advantage for the product and it is not easy to copy in the case of a service.
Delivery / CX: Within the product, the support team’s location is not important - it should work in the client's time and be a native speaker or fluent speaker in the client's language, but it is not necessary for it to be in the same country. Thus, large costs can be saved. It is common for many startups to outsource customer support to the Philippines where there are native speakers available.
At the same time, customer experience is one of the most important areas for companies, as up to about 60% of their revenue comes from upselling and cross-selling, so setting it up is very important.
Team: Teams can work remotely - even startups like Zappier or GitHub have fully remote teams. Americans are not necessarily part of the team, but it is a great advantage. They understand the market, they can help, and their business and marketing skills are usually much more convincing.
Expansion to America with service
Marketing: For a service, it is more difficult to define UVP than for a product, as there are many consulting and development firms or design studios on the market and it is difficult to distinguish them. From our experience, the best way is to create a proposition for a specific customer segment. I recommend deciding on successful case studies and duplicating them in the vertical. For example, we decided on the SaaS B2B enterprise after the first and second investment rounds.
At the same time, it is good to think about what the CEO and the main management team are most concerned about when to determine UVP and that they will not sleep. For example, we focused on the speed of delivery of the solution, because after getting the investment everyone is driving the startups as fast as possible.
Sales: Services work very well on the basis of referral business or recommendations from a third party, and it is necessary in almost every market to build a network of contacts, and after the first orders, to determine your sales funnel. According to our mentor, we have to complete five projects in America, add 0 and then we have won and then “we basically don't have to do any more sales".
Most of the services are still being sold outbound. The company makes outreach (direct emails, calling on Linkedin, cold calls) to customers and trys to make an appointment to then send an offer and close the deal. At the same time, I see a trend that companies realize that B2B is also human at the end, and B2B behavior is changing to B2C. For example, there are platforms such as G2Crowd or Clutch where customers write their experience with products or services.
Because of this behavior change, every business must also focus on inbound, or so-called content marketing. This includes LinkedIn content, Twitter (In America), and Google Ads associated with facebook re-targeting (this combination works better than Google Ads with banners).
Delivery / CX: As part of custom IT development services, the customer does not need the development itself to take place within its time zone. Even U.S. startups are increasingly developing outside of the states (teleworking and moving development to the Central European region has even been described as a top trend to invest in).
However, as part of a delivery or CX, the customer requires me to call the account or project manager whenever needed and discuss any project issues. Therefore, if an IT consulting firm wants to operate in the US market for a long time, it has to create an American team that will consist of sales and account management and project managers and analysts, all of which are primarily needed for the initial analysis.
Team: In the business service and cases I have described above, I would recommend finding a sales person In America (but only after you have closed at least three deals and found out what this looks like). In that case, it is good to think about the location where you want to find such a person. In other words, which stateor city makes the most sense for opening your US office.
Recruiting such a person is a nut to crack, and you must have some experience to distinguish grain from chaff, because traders can sell themselves very well. It is very difficult to find a good trader at all in San Francisco, or in the Bay Area, because a jobless trader practically means that he is not good. We are therefore looking in other states like Texas, Colorado or Virginia, because we do not mind when the salesman works remotely. He should only be willing to travel, which is usually not a problem.”
About Zuzana Maderová
Since last autumn, she works as Expansion and Business Development Director at Enehano Solutions, where she is currently in charge of the company's entry into the US market. It is with the development and expansion of companies, especially in CEE markets, that she has several years of experience when she previously worked as a country manager at Staffino or a relationship manager in the finances of the Dateio startup. Zuzana studied translation and interpreting in English and Portuguese. During her studies she worked for three years in the student organization AIESEC, where she worked as a country manager for Slovakia last year and was responsible not only for the growth of seven local branches, but also for the personal and career development of 400 students. In her spare time, she helps with iKid educational projects, Google for Startups and building the startup community in Prague through Startup Weekend Prague.
Reach out to Zuzana for any questions about Enehano and scaling your business in just 10 weeks time!