SALES MANAGEMENT
Sales tales: US Entry Strategy for European Software Vendors. It’s another World
Today’s tale: how SQL Compare and Netcool/OMNIbus made it in New York
by Stephen Allott, Venture Partner, Seedcamp, Sales Tales
Want to conquer the US market from Europe?
Hear the winners’ stories.
- The Redgate story: is of one world one product: on the internet no-one knows you’re a Brit.
- The Netcool story is of a global product which needed to be sold to become the winner
- The Craneware story: is a love story of a product made in Scotland for the founder’s American girlfriend’s mother to use at work in America.
What do they have in common?
Each dominated the US market starting from a European HQ.
Each company is quite different: different industry, different ticket price, different SaaS model, different type of founder.
Redgate Software’s SQL Compare is a $200 tool for Microsoft SQL Server developers. HQ in Cambridge, England
Netcool/OMNIbus is a big ticket enterprise sale of fault management software for large scale networks. HQ in London and San Francisco.
Craneware is for US hospital insurance claim admin applying the correct reimbursement codes. HQ in Edinburgh, Scotland.
Here are their stories and then I’ll talk about the lessons to be learnt.
REDGATE: A GLOBAL SUCCESS STORY
Redgate wrote their product, SQL Compare, to help transfer data into a product they were selling (an early competitor of Jira). SQL Compare was uploaded onto the Redgate web site as a free tool to help customers do their data transfers. Downloads grew and grew. Just by word of mouth. So Redgate started charging in USD taking payments by credit card and the business started. Orders came from all over the world. Redgate SQL Compare became US market category leader and they junked the Jira competitor.
So on the internet, where your product permits, you should be default global from the start, if at all possible, and trade in USD.
How should you position yourself on your web site? As a US software company or as a European one? How soon do you need a US address on your web site?
Redgate US sales grew strongly. Redgate stayed in their building in Cambridge. To make it easier for US customers they did several neat things: 1 800 REDGATE was set up so US customers could call toll free. The automated voice attendant that answered the phone had a message recorded by an American staff member with a strong American accent. The US sales team worked a shift covering US East Coast time (14:00 to 22:00 in the UK). All had direct dial US phone numbers. The company provided a full 3 course hot meal for the US team for their evening meal (lunch break on East Coast time). Support and accounts receivable also worked the US shift. Local Americans in Cambridge (like Tom Curtis, married to an academic) were hired to work on these teams to add local knowledge, their work ethic and commercial skills.
The point is that you can sell globally by default on the internet if your product is global. When Tom Curtis returned home to California (following his Cambridge academic wife), he set up a California sales office to cover West Coast time. Today Redgate has hundreds of staff. They did not need US VC or channels or people in US offices to become the US market leader.
Redgate learnt for themselves how to run a software company, foundinig the annual Business of Software Conference in Boston.
NETCOOL: A STORY WHERE THE WINNER TAKES ALL
Netcool/OMNIbus was a tool written at the request and to the specifications of British Telecommunications p.l.c. to handle alarm management on their internal data network command centre in Dorking, England. Deal sizes were 6 to 7 figures. It was a big, complicated and initially buggy product designed to manage IP networks and it arrived on the scene at just the right time. Netcool was a Micromuse product who were a 50 person London based VAR for Sun Microsystems, then a leading Silicon Valley hardware company.
Micromuse was founded by two top sales people from the UK operation of Computer Associates and employed an aggressive and well organised sales team to sell Sun products and network management software in the London market. The senior management included seasoned computer industry commercial executives with long international experience.
Micromuse targeted the US market from the getgo, hiring its first US sales rep through personal contacts. Ken lived in Dallas far from the potential customers of telcos and big investment banks. Initial sales efforts were focused on the New York area with London executives flying in for prospect meetings arranged by Ken, the US rep from Dallas.
Goldman Sachs and Merrill Lynch were early wins with parallel sales efforts going on in both accounts in New York and London.
New York and then San Francisco offices were founded and staffed with a balanced mixture of expat Londoners and local hires. In the early days of the US operation, the global VP of sales was an American living in London, but his US sales hires were of mixed quality.
Things really took off after we hired first one then a second American sales top gun.
Think: Michael Jordan of the Chicago Bulls “What time is it? Game time”
Mike Donohue was the regional manager for Computer Associates on the West Coast. A great golfer with a big smile and unquenchable attitude, he is a world class talent. After we beat Computer Associates and him head to head on a big deal, he called me and asked to join Micromuse. He wanted to work for the winner. I flew in from London to interview him in our San Francisco office and quickly hired him.
Then we hired Greg Brown. He is the best in the business. Just the best. I had been briefed by my board to lead the hiring process. I wrote a candidate specification for the best in the business. So the headhunters found him. Literally the best in the business. So I flew in from London to Cleveland this time (where he was that day visiting from Chicago) and interviewed him. Famously he had one and a half pages of questions for me. And again we quickly hired him.
With Greg and Mike on board we never looked back. We already had the best product. But that was not enough. We needed the best sales people. Now we had the top guns, we crushed the competition.
CRANEWARE: IS A BOY MEETS GIRL LOVE STORY
An American girl on holiday in Edinburgh, Scotland, meets a local man, Keith Neilson, and they fall in love.
Keith visits her in America and charmingly talks to her mother, asking about her work. She works in a local hospital on medical insurance claims. Patients keep getting the codes for different procedures wrong making her job hard. Keith writes some software, back in Scotland, to make her job easier.
For love.
But it turns out every hospital in America needs the same software. And it’s easy to locate the insurance claims admin in each hospital. So Craneware starts selling the software remotely to hospitals across America.
Craneware now employs over 300 people and is publicly listed in the UK.
THE LESSONS LEARNT
The questions are, first, do you price in US dollars from day one, second, do you make your web site look American and third, when should you start making local hires in market in the US?
Or to put the question another way, when and how should you enter the US market?
- You must have a superb product, to win in New York “but if you can make it there, you can make it anywhere”
- If you can, be a global citizen and sell globally on the internet from the beginning. And carry on with that as long as you can.
- Time zones make a difference but West Coast firms happily sell into East Coast accounts so it’s not that big a barrier. London trades happily with New York. Redgate showed how UK based sales can work well selling to US customers.
- Build US presence when its absence clearly holds you back commercially. But in the digital post COVID world of Zoom what difference does it make where you are when you are talking to customers? Maybe none
- Hire the absolute top guns. Many if not most of those are in the US.
- When you do open a US office, blend US local hires with expat UK talent.
- As you get bigger, US firms want to see you make a commitment to their local support but they don’t care and cannot tell when your holding company in the UK owns the US trading subsidiary or vice versa.
“If you can make it in New York, you can make it anywhere”.
It is dark. 5 am. I am power walking laps around New York Central Park. I’m have a full day of investor meetings for my IPO.
I’m an Englishman in New York, I feel quite alone. Out of my depth. In an alien world. I look at the other runners and walkers and wonder how they feel.
So I power walked to boost my morale for the challenges of the day, reciting:
“Pain is temporary. Quitting is for ever. Never give up.”
Cronofy is a new contender to watch. A cross platform calendar integration tool from Nottingham, it has had more than 50% US revenues in the 4 years since inception. Like Redgate, Cronofy is a global citizen.
