How To Manage Your Startup's U.S. Expansion

    The U.S. is still the land of opportunity for many European startup companies. Having a permanent location in San Francisco or New York can plug you into most of the world’s VC and Angel money, and the U.S. is basically one big homogenous market for your startup to take advantage of. Despite the benefits of being there, it’s expensive to hire developer talent in the hub cities, and it can be tough to convince your existing team to pack up and move. So many European startups are left split between continents.

    Clearly it’s difficult to stay on top of everything when half of your team is eating dinner while the other half are just waking up. San Francisco is a 10 hour difference from Finland, while New York clocks in at 7. I find it becomes an big ordeal to even schedule a quick interview with people located on the west coast, so I can’t imagine trying to run a business split between the two. To share the best practices of how to manage Team USA and Team Europe, I spoke with Ville Miettinen of Microtask as well as William Wolfram of Dealdash.

    Microtask, the crowdsourced document processing and data entry company, moved part of its operations abroad to better connect with customers. “For us it would take roughly the same effort to enter a market like France, Germany or UK,” says Miettinen. “The number of potential customers in the US is much higher. Also, they tend to be more ‘early adopters’ for new technologies and approaches.”

    To get a better hold on the U.S. market, Microtask has a sales team spread across the U.S. Their development team is still located in Tampere, Finland with a few people living near Helsinki, but their sales HQ is in Atlanta, with people in LA, Chicago, Atlanta, and Tampa. On top of all that, Miettinen himself is normally located at the I/O ventures space in San Francisco.

    Communication between these groups is obviously a challenge. Microtask stays on top of things by using Flowdock (with separate channels for different teams), as well as daily conference calls. The company started out using Skype for voice and video calls, but have since switched over to Calliflower, which seems to offer better security and more features.

    On a practical level, Meittinen says that fixed-time daily calls are important. They do theirs at 6:45am PST, which comes to 4:45pm Finnish time.

    For any entrepreneurs looking to set up offices int he U.S., Meittinen says, “San Francisco has really good co-working spaces – it’s a good way to set up your initial office. You also get to meet a lot of other entrepreneurs. SF is all about networking in any case.”

    Dealdash has moved to New York to also get closer to their customers. The penny auction site is only available for U.S. residents, so really Dealdash needed boots on the ground for customer service and all the non-development parts of their operations. Dealdash’s development team is located in Helsinki.

    Outside of Skype and email Dealdash has found it useful to create and share a status report every day. “When there are clear, quantifiable targets in place and people are held accountable to their set targets, the distance becomes less of an issue. It does not matter if someone is 4,000 miles away because there is a mutual understanding of what should get done and by when.”

    If you’ve paid attention to any of our past interviews with Wolfram, you’ll notice that the young entrepreneur is laser focused on clear goals and measuring every area of the business with metrics. Each Monday, Dealdash has a kick-off meeting where they determine the weekly target for the key performance metrics for each area of the business, and then share those goals in Google Docs. On Wednesday they go through how they are doing relative to their goals, and on Friday they have a shut off meeting where they compare what they accomplished to their metrics.

    Here are a few examples of targets we set:

    1. Our goal is to maintain a certain level of quality customer service at an average 1st resolution time of under 12 hours.

    2. Another example is marketing. Each week we set a target for the number of new paying customers we wish to acquire and at what cost. Every day we spend a certain amount of money in advertising, for that money we expect to acquire a specific number of new registered users and new paying customers. If we spend more to acquire a customer than what the target was, we have failed. If we acquire more customers at the target cost or below, we have succeeded.

    3. Our Production Operations has a target of maintaining a certain response time for key pages of the website. We have third party tools in place that measure response times from various locations in the US every minute. These results are then compiled into our daily status report and shared.

    4. Our Head of Promotions is responsible for successfully planning and running a weekly site wide sales promotion. The promotion and target is explained to the team on Monday and when Friday comes the promotion is either running or 100% ready to be run.

    Dealdash would probably be as focused on these metrics even if the whole team was located in the same office, but having clear goals lessens the need for micromanaging communication. “When work performance is quantified and clear, measurable targets are set and team members held accountable micromanaging or ‘checking up on people’ is no longer needed,” says Wolfram. “Instead you create a transparent, fair & honest culture where results matter and politics are obsolete. We are able to cut down on meeting times and get straight to the very essence of what matters. It encourages us to work on the right things.”

    On top of the performance monitoring, Wolfram echoes Meittinen’s focus on set meeting times. As far as these meetings go, he recommends, “If you feel tired make sure to have a cup of coffee and some fresh air prior to the meeting so that you don’t waste others time or lower the team moral. Everyone is responsible to make sure they are upbeat on meetings and able to fully focus on the agenda.”

    As far as other issues to keep in mind, Wolfram gives this advice:

    Avoid creating silos. It is very destructive to create a culture where “those guys do their thing (marketing), we do our thing (engineering)”. Instead make sure both offices know what the other office is working on and facilitate a culture of mutual respect. Everyone does not have to become an expert in each others areas, but its important that there is a common understanding of what different teams are doing and why their work is matters. Share information. Make sure each office knows exactly what the other office’s goals are and when they are to achieve them. Bring your teams together face to face frequently to build stronger relationships and put faces to the names in your inbox.

    As you hire Americans and people from different cultures, make sure to get acquainted with the differences in culture and behavior and highlight them to your team so that the differences can be laughed at and better understood. For instance, Americans tend to respond to all emails immediately, even if they don’t have an answer for you just yet they’ll come back to you with an upbeat “Looking into this, will get right back to you!”. Finns on the other hand tend to wait to respond until they have an answer. This may cause friction if the US team does not know if the Finns received their request or if they are just choosing to ignore it. On the other hand Finns may think the US team members are just sending a redundant confirmation back.

    And oh yes, become good at taking random short naps here and there when needed. This will make your life easier and make up for any changes in sleep patterns.

    Top image CC licensed by lars hammer on Flickr.