BtoB SaaS Startups: The Keys To Open A New Market (The US In Particular)

Oh my…oulala!

I can’t believe it’s been a year and a half since we last spent time together dear readers.

Some of you may recall my first article, where I shared special tips and tricks for those living on borrowed time. Time is our one irretrievable asset, our most precious resource, and we should try our best to treat it as much.

Reflections

It feels like yesterday: Landing in the beautiful City of Boston, as Employee #1 for Toucan Toco. My objective: Opening up shop by exploring a brand new frontier. At the time I knew I’d be taking on a difficult mission, especially because I’d never done anything quite like that before.

My expectations were right on target: It was one hell of a challenge.

There are many words that can describe the flavour of this adventure: tiring, open-minding, stressful, teaching, exciting, emotional, revealing and I’d like to think… successful!

Well and now we’re back from the future and here in the present moment. I’m about to close this fantastic chapter of my life, I thought I’d reflect on my journey and share with you tips if you are looking to open a new market — the US market in particular.

Opening A New Market: It’s Like Finding Product Market Fit All Over Again

Some of you might think I am making a shortcut saying this, but I realized after a few months that I had been doing some product market fit work during the first 6 months of my mission without even knowing it at the time.

You likely have questions right here at the start. One of those may be: “…So Tiph: What does this mean? Are you taking a shortcut here?” Non, I’m not…because I realized within the first few months of my country opening mission that I’d been doing some PMF (product market fit) analysis without even knowing it.

If you’re working in SaaS (software as a service) and are right about to attempt opening up another market, perhaps in the US for example, or if you’re simply curious and want inside access to a country opener’s journey….

Read on.

You may have some questions to start with like: How is country opening like conducting PFM? Think about it: When you’re engaged in country opening operations, you’ll already be doing this:

• Identifying your target market,
• Understanding where your solution can solve an unanswered problem.
• Reworking your messaging.
• Testing your value proposition.
• Perform competitive analysis.

What makes this PMF analysis unique is in how it’s supported by information provided by your home market (e.g existing customers, the maturity of the product lending helpful insights).

Ok great Tiph. So is it easier to conduct? Well…yes and no.

Bear with me as we unlock how to achieve PMF when penetrating an entirely new ecosystem (and how to avoid making some mistakes we made)!

#1 Focus

“Every choice is a renunciation. Indeed. Every choice is a thousand renunciations. To choose one thing is to turn one’s back on many others.”

When I read this quote from Ronald Rolheiser, I can easily recall the first challenging portion of the mission itself: Choosing the right Target Market.

Good news: In doing so we’re able to rely on a generous amount of history and past experience from the company itself: successes, failures, and so forth. Additionally we already possess a product and intimate knowledge of it such that we know it meets a need, has existing customers and (as was the case with me) there were plenty of use-cases for a great fit for plenty of industries.

For example at the time of my country opening efforts for Toucan Toco we had 10 salespeople targeting different industries with diverse go-to-market strategies in France.

No matter the amount of strategy however, you’ll have to pick one approach to unlock the door leading to another market — in my case the US. Which should you focus on?

Initially while it’s tempting to adopt an “all in” approach, this poses the risk of being totally inefficient in the process as you wouldn’t be able to probe each of these target markets in depth enough. Thus making it hard to understand which one of them is the best door to break into the US market.

You’ll have to pick your tactics and test your hypothesis carefully.

#2 Test Your Hypothesis

With multiple go-to-market strategies to choose from, we decided to select 3 of them to test drive and see where the company could position itself first in the US.

• We based our selection on historical data.
• We looked at current customers per vertical as well as the sales process for each of these deals (how fast/difficult it was to close these deals)
• Ideal Customer Profiles… the aim was to pick 3 hypotheses where we felt the product was answering a strong pain — vertical x personae, with a value proposition easily resonating.

We picked Real Estate — Property Manager, Retail — CFO and Software — VP of Product.

If you are already acquainted with the PMF work, I’m sure your eyes somewhat widened for a second when you read the previous line. These 3 hypotheses are very different in terms of value proposition, expertise, personas and messaging.

At the time, I didn’t realise it, but it was certainly a lot to handle for a 2-people team!

Coming from a Sales background at a big company, I did what we thought was the way at the time: I cold called into companies to try to set up meetings, I created automated email campaigns to test the waters.

And well… Guess WHAT?

60 calls per day and 3 email campaigns per week for 3 months later, I didn’t manage to have a significant number of discovery calls or hot leads…

This was the wrong approach.

One of the main reasons why this failed was because there was just too many parameters to play with:

• The vertical/industry: I was focusing on real estate first. But this industry is so vaste, complex and foreign to me. I could be targeting developers, property management companies, malls… there were just too many options to choose from.
• The personae: I was focusing on property managers — but I wasn’t certain it was the most relevant one
• The messaging: We had an idea of what resonated with French customers, but how about American ones? Chances are the phrasing had to be adapted
• Their technology stack: Real estate softwares were not the ones we were experts at connecting too. We couldn’t display any specific advantage there
• The location: The US market is gigantic — where did we have a better shot? East Coast? West Coast? Texas….?
• The size/revenue of the company: Which company size would see the most benefit in using our solution to solve their pain
• etc…

Just re-reading that list, it gives me a headache. I’m thinking: Why the hell did you put yourself through this Tiph?!

Needless to say, experience is one of the best teachers…

#3 Research Before The Hard Sell

Moving to Boston definitely helped correct this process. As I was growing my network, I decided to ask for help from other entrepreneurs, head of sales, marketing people at startups… and that’s when I figured out that I needed to go back to the drawing board and do some qualitative work: user research.

That’s what we did with my fellow country opener. We reached out to the 3 different identified personas at several companies and asked them questions to better understand their pain. We made sure to ask for feedback of our solution and the value they saw for themselves (if any).

It is much easier to wear the user research hat rather than the sales one to talk with our target personas. A few interviews later, I quickly realised one hypothesis was much more responsive than the other ones to our solution: Vp of products at tech startups/scaleups making under 20M ARR. There were a few main reasons behind that choice:

• The software space is less competitive to break into than other markets where big American competitors were already striving in our market
• We can find more easily early adopters of new tools at Tech scaleups
• Some of our user interviewees turned into hot leads!
• Selling to scale ups has a much quicker sales cycle
• Our value proposition was resonating rather strongly

In short, it seems that it was the easier and fastest market segment we could get some results from: low hanging fruits.

#4 Those Low-Hanging Fruits

When penetrating a new market, it is better to first focus on the low hanging fruits — the easiest and fastest way to generate revenue.

As every entrepreneur starts a business, they try to focus on the sales that will be easily done. It can be the ones leveraged through their professional & personal network, the ones stemming from their user interview…

Bringing in some revenue quickly helps validating hypotheses and achieve PMF. In addition, it helps create customer references to attract other customers more easily in your following discussions. In our case of opening a new foreign market, the process is very similar.

As we picked our focus (low hanging fruits) — the Software industry x startup/scale-up x VP of Product and decided go all in…now what?

#5 Pick The Right Channels To Get Leads In

First, let’s congratulate ourselves for all the hard work done to get there, shall we?

Finding PMF is such a long journey, therefore let’s not forget to celebrate small wins to help us enjoy the process !

As we knew which segment of the market to go after, we needed to identify the best way to get in touch with them and start testing our messaging & value proposition. We resumed our work of iteration leveraging Outbound cold calls & semi-automated email campaigns.

It did not work.

The simple reason behind was that there was again too many variables to play with to reach out to our target:

• Which sub-market segment of the software industry to focus on? AI, Healthtech, lawtech, martech…
• Which revenue bracket ? 0–20M covers a lot of companies…
• Which location? Again, should we go after NYC companies, the ones in the silicon valley? Recently funded ones…?
• How many employees?

And we were still mostly 2 people to do this work… so a lot of outreach didn’t get us where we wanted to be.

So… what now?

Well… we were lucky to have a fantastic Boston startup community to take inspiration from! After consulting our network, we understood that perhaps instead of thinking about our lead generation process as being sales-led first, we should begin by being market-led.

We started first to work with paid advertising (Linkedin ads, SEA…) and some lead providers to have quick access to potential buyers & help us refine our target market. In parallel, we constantly worked in producing content. That’s where we were lucky to be backed up by a fantastic marketing team who worked in referencing our articles leveraging SEO. They were already used to do it in France (perks of working for a 5 year company successful in France) and we made sure to get reviewed and rated with analytics gurus such as Gartner, G2 crowd… That was a tremendous help to gain credibility in the US market.

After a quarter working on this inbound machine…there it was.

A light at the end of the tunnel! A little over 6 months after opening shops in Boston, we started to see much more qualitative leads coming our ways.

What I realized reflecting on this experience is that the channels you’ll use to go after your target market will depend on the target itself. For us, we were after B2B companies and targeting SMBs with an average deal size ranging from 12k-80K. Therefore, it made sense to use a combo of content, inside sales & inbound led kind of lead generation model.

If you were to reach out to Enterprise targets, you might want to put more emphasis on your outbound outreach & field Sales (debatable of course in a post-covid world). Conversely if you are on a B2C setup, using primarily channels like Facebook, instagram… might make more sense.

Having more conversations with prospects was a great way for us to test our messaging, to re-work our pitch to adapt it to the US market and validate our value proposition.

#6 Always Iterate On Your Messaging, Value Prop and Target Market

There is a work that never stops: iterating on your messaging, value proposition & target market.

There is always a better way to communicate your unique selling points, another sub-category of your target market that better responds to your value proposition…

Even after almost 2 years now in the US, we still need to refine further more this target market. And for that, every week we have our marketing folks supporting us with content-focused emailing campaigns, webinars, e-books… to help us always better identify our sweet spot.

There is a lot to say in the way we iterate in our emailing campaigns, or the way we are generating inbound leads but that can be a future topic to write about ;)

#7 Get Ready To Adapt Your Product Roadmap

New market can often mean new feature needs.

Of course this isn’t always true but chances are that if you are penetrating a market a bit more mature like the US, your target market will have more “advanced” needs than your home market one. And unfortunately, some of your competitors might already be matching these more advanced needs.

That’s what happened to us. We lost a fair amount of good leads due to specific needs we couldn’t yet meet the way our product was at the time. Interestingly, a similar target market in France wasn’t yet requesting this need at the time.

Full disclosure, we were (a bit?) stubborn at first. For a few weeks, despite being fully aware of lagging behind some fierce competitors in the US, we convinced ourselves that our sales team could do magic tricks, sell the value and still win these deals… After all, we are dream sellers aren’t we???? 8)

Oh my dear readers, I’m sure you know what happened next?

Well… we didn’t close the deals which strongly needed these missing features!

YES we should focus on selling value and NOT the features. But when the product features don’t fully meet client technical expectations, there’s no surprise to lose the deal to a competitor who does meet all requirements (unless the customer’s CEO is your bff, but that’s another story).

Thank god, only fools never change their minds!

We quickly made the necessary with the Engineering and product teams in France to ensure our product evolution would include features increasingly needed.

Now… let’s not fool ourselves here, Rome wasn’t built in a day.

We knew the required upgrades would take a few months to get done so we had to make a decision as per what to do in the meantime.

Always iterate on your target market

The solution was to go find a subcategory of our target market that didn’t have these advanced needs yet. Therefore we played with geography & industry criteria to try to shift our focus slightly the time we were getting more robust on these new requirements. Agility and adaptation are key here.

#8 Celebrate Your First Sales and Get Ready To Scale

My dear readers, this was for me an EPIC moment I will remember forever. The first win, the first American signed customer. All the hard work, relentless efforts finally paying off!

It happened 9 months after I moved to Boston and during the lockdown. I remember how I felt when I finally received the contract executed and signed in my mailbox — It felt like a shot of excitement… all the stress and doubt released in an explosion of pure joy :D.

At that point we were 4 people and confident that we were on the right track with our PMF in the US.

We started to hire more people.

Fast forward 9 more months, end of December 2020 and we are now 10 employees in the US entity. Don’t get me wrong, I feel we are indeed on the right track but I’m not convinced we have fully achieved PMF just yet. However, looking at the team in the US, I’m confident they will be able to keep iterating and scale the business.

On my side, it’s with a heavy heart that I’m closing this chapter of my life as a country opener in Boston. However, it is with a light soul that I’m shouting: Mission Accomplished!

I want to take a moment to thank all the amazing people who have crossed my path in many different ways: friends, network, mentors, advisors, colleagues… this wouldn’t have been possible without all of them!

As for my astute readers, I hope you found reading these lines what you were looking for. Whether that being insights, help or simply a few minutes of entertainment.

Bear in mind that is not necessarily a one-size-fits-all process, but more a tale of my lesson learned entering the US market with Toucan Toco.

Until next time

Yours truly

Tiph