European Expansion for Silicon Valley Startups

Thoughts on how to think about it

Martin Reiter Head of International, Airbnb (July 2011-13) VP International, Groupon (2010/11) Stanford Engineering School European Entrepreneurship and Innovation February 3 2014

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? Who?

Vienna...

How do you know what you like without knowing what there is?

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

Why Europe excites…

Who was worth more?

Can you succeed in a global market when you win only in your home country?

The world’s second largest internet consumer market? The third largest metropolitan area in Europa? What does Istanbul mean to you?

Why Europe matters…

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

before now

Curiosity

Physical Good Operations

my career… you never know where you end up

Fear

Toolbox

Speed

Design & Culture

Others are different – and it is OK

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

Why

When &

Where

What

How

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

building blocks for entering the European market

why… three reasons to expand

Requirement Opportunity Competition

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

why…because of

Winner takes it all

Home is defensible

Local winner can take all

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

why… there is more

Founder Personal Growth

Team diversity

Product

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

too early too late

Great idea

…and pretty easy to execute

Brand-driven

You really want to be first mover

Clone threat

Others are there, but your product is

better

< 8 M Series A

Take liquidity risk if you must

Product

You are Instagram

Clone Wars

Others are as good and first mover – but you can raise

easier

when to enter Europe…

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

rule of thumb: 1,5 yrs OPEX burn plus 0,5 $M Marketing = 1,5 $M entry cost per European market

Peixe Urbano

where… Your

Neighbour!

Rocket Internet DST!!

Rakuten

> 1 bn Alibaba

The nicest opportunity…

somehow

Easier access and still very big

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

where ... Europe at a glimpse

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

UK – convenience is

expensive

ES – crisis and

opportunities

DE – Berlin as startup

hub

Skype, Spotify, Klarna

F – Vente Privee and

LVMH

IT – Strong retail consumer market

CEE – Massive consumer

catch-up

what works and what doesn’t – lessons from bringing startups to Europe and around the globe

Same Org works Culture works.

Somehow Tech Product works Marketing Operations

Canada. Maybe.

Europe

Russia/Brazil

China

Japan

Australia

Europe

Brazil/Russia

Japan/China

Can be done centrally. At prohibitive cost?

Your biggest cash drain.

Hire accordingly.

Watch legal: China, SEA, Russia

Watch shipping:

Russia

Payments: LatAm, Germany

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

easy

hard

1 Align the rationale Why do you do it. Do investors, board and leadership agree?

2 Scope the adventure Burn & Liquidity. Revenue & Expected upside. Markets, Headcount, Org. Good time to get help.

3 Find leadership Product leader. Business leader. Think about what it took to make your market successful.

4 Create playbook Vision, Goals, Location, Processes, KPIs, Budget, Roadmap, Marketing, Communication

5 Build and Hire Hiring manager hires. Recruiting is not HR. No stupid mistakes. Tax. Finance. Interaction. Office.

6 Operate How can you feel comfortable with what others do far away? Supporting or enduring? Team. Data. Relationship.

7 Evolve If you don’t change your org once a year, I would be concerned. Correct mistakes and adjust to scale and growth.

Concrete steps to developing a European entry strategy

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

1 Hire well. The founder built in the U.S. – which talent can realistically replicate this in a more complex (EU) market?

2 Local Talent rules. The GM needs to be fluent in the language, but not necessarily a local. Talent is more important.

3 Right organization. Make people 100% accountable – Win or Fail. Ensure proximity to the market and experience.

4 Don’t underestimate marketing. You can theoretically do marketing from the U.S. – but great deals are negotiated in Europe.

5 Decide upon tech resourcing. Ring fence or pool resources – International product manager yes/no…

6 Founder must build an independent advisor network in Europe. How can you feel comfortable with what others do far away? Supporting or enduring? Team. Data. Relationship.

Some lessons learned from Groupon, Airbnb

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

How to recruit talent in Europe

Why do I care Why do others care? How did I get there First principal thoughts Why? When? Where? What? How?

4 steps to get best talent

Right role

GM or Sales Manager?

Right hook

Pitch and Compensation

(GM – 100-150k USD plus same to double in

equity. VP – more.)

Right search

LinkedIn for all relevant companies.

Right effort

Meet people via Investor network and LinkedIn

search. Ask for referrals, leads. Be in Europe for a

week each

Thank you Martin Reiter Vienna Martin Reiter Email: martinenjoyslife@gmail.com Linkedin: http://www.linkedin.com/pub/martin-reiter/30/ba3/64a