A SaaS companies successful US expansion

A SaaS companies successful US expansion

Many companies have already burned millions expanding into the US market. But not Sellics. As sales manager, Mark Reich led the company's successful development on the other side of the Atlantic. In the interview with Christoph Jost, Mark shares his learnings. He explains when the right time has come for such an expansion, how he proceeded the choice of finding a location in the USA and what criteria top salespeople must meet in his view.

Mark Reich

Mark Reich,
VP Sales and Customer Success at Sellics

Mark Reich has been head of sales at Sellics since 2018. Sellics is a SaaS company specialized in the marketing of companies that sell their products on Amazon. Before, Mark worked in various sales positions at SaaS companies, including Dropbox and Absolventa.

Christoph Jost

Christoph Jost,
Managing Director of FLEX Capital

As a serial entrepreneur and co-founder of FLEX Capital, Christoph Jost founded the online job-exchange Absolventa and built it into the market leader in Germany. He also developed the online listing group Passion 4 guestrooms. He successfully sold both companies to the FUNKE media group.

Mark, with Sellics you have succeeded in establishing a significant US business as an initially German company. What was your key to success, what are your learnings that you can give to founders with similar plans?

Mark: Sellics was founded in 2015. During that time, a few basic factors have favored entering the US market. The most important one: There were no established players yet. That is why we saw the first signs early on that we could assert ourselves in the USA. There are always two approaches: push and pull. In our case, it was a clear pull that came out of the market. We built a strong marketing inbound engine early on and experimented in different markets. We saw that there is a demand in the USA and we were able to incorporate this knowledge into our product DNA at an early stage, align our website accordingly and choose an international company name. After a few years it was clear that the USA would generate at least as much sales as the European markets.

We built a strong marketing inbound engine early on and experimented in different markets. We saw that there is a demand in the USA (...). After a few years it was clear that the USA would generate at least as much sales as the European markets.

Mark Reich

You were active in the US market while working from Germany for quite a while before you opened your office in the States.

Mark: With a pull strategy, it makes perfect sense to first see from the head office whether the previous sales motion also works in the market you want to move to. That's why we initially hired a few English-speaking salespeople in Berlin who worked during US times. That worked fine for the first 100,000 in ARR. In the enterprise or public sector, however, it is very difficult from my point of view. You have to work on the ground with people much earlier. But with a SaaS product for SMEs and with other products, you can first gain experience working from Germany. Especially if you do not have any experience in the target market, you can find out which location is the right one and better fund the investment.

When did you realize that you must go to the USA and what did you learn on site?

Mark: The decision was made when we saw that we were reaching a customer segment in the USA where it made a difference whether we worked on site. We no longer saw traction only from very small companies, but also from medium-sized companies. That was the time for us to invest. The on-site presence actually had a big impact.

At the beginning, you were in your office in New York for some time. Why was that important to you and why did you choose New York, which is a very expensive location?

Mark: The decision was made when we saw that we were reaching a customer segment in the USA where it made a difference whether we worked on site. We no longer saw traction only from very small companies, but also from medium-sized companies. That was the time for us to invest. The on-site presence actually had a big impact.

We ultimately chose New York for two reasons. On the one hand, because of the existing direct flights from Berlin, on the other hand because of the access to talents who have already done similar things. The infrastructure is also very well developed. There are many service providers for recruiting, admin, etc. that you need when you have a team on site. Yes, in comparison you pay more than if you were managing the market from Germany, but you also gain speed.

We spoke to our existing US customers about our goals for the US market and asked them: What do we need for this? What is your opinion on marketing and sales? We conducted interviews and received very detailed feedback.

Mark Reich

You have now set up sales teams both in Berlin and in the USA. What differences did you notice? Did you approach the hiring process and team building differently?

Mark: I have criteria for new employees that are relatively universal in the software sector. You need people who have curiosity, the ability to learn and who are adaptable. I haven't moved away from these ideas in the USA either. What was different because of the remote office: I was looking for experienced employees who could act independently. Our on-site management can, for example, estimate what salaries we have to pay and how the hiring process has to work. When we hired the first squad of experienced people, they were also able to train young professionals. We couldn't have done that from Germany.

We don't have to talk about US salaries. In New York everyone earns more than the average sales manager in Germany, but you have to get used to that and you need to get money from somewhere else to cover that.

The US market is also much more flexible. Employees quit and are gone after two weeks, but the other way round, too, is much faster. We have therefore accelerated our hiring process to ten days. That helped a lot. In Germany, the processes are now also getting faster. Two or three years ago the differences to the USA were even greater.

I was looking for experienced employees who can act independently. Our on-site management can, for example, estimate what salaries we have to pay and how the hiring process has to work.

Mark Reich

After graduating from university, you made the decision to focus on sales and you are still very passionate about it today. What is the fascination of sales for you?

Mark: After graduating, my primary interest was starting a business. In my start-up, I was more incidentally responsible for the customer side; we divided the responsibilities among us co-founders. I quickly saw how much potential there was in sales. Sales is a critical success factor, especially for the SaaS industry, and there was little technology-oriented knowledge in this area in Germany. So, I specialized in order to bring along skills that are not yet available on the market.

I also like the combination of art and science in sales. These days sales are very tool-oriented, but in the end you end up managing a team of 30, 50 or more people and making deals with customers. This is where the art factor comes into play. Data and tools are of little use if someone is sitting in front of you who wants to get out of a 100,000-euro contract. This combination of psychology and strategy makes sales exciting.

Christoph: What I would add from our perspective at FLEX Capital: You have to be able to handle pressure in order to work in sales. In the growth-addicted startup scene in particular, investors quickly go to the CEO, who then forwards directly to Head Sales, and demand more sales. If your team doesn't deliver, this company has a huge problem. Having smart people for sales who think differently makes a huge difference for a company. Unfortunately, there are many people in sales who got into the area more out of necessity because they failed in their dream career, and few who made the decision to work in sales.

Mark: During my time at university, I had few points of contact with sales, although the topic is strategically very important for start-ups today. In the US, a lot more college graduates go straight to sales. This is still rare in Germany and there is still a large gap in sales talent. I believe that as more SaaS companies establish themselves successfully, the career path will become more attractive. One would have to spread more success stories, establish closer proximity to training institutions and pay more attention to the topic in the startup community.

Data and tools are of little use if someone is sitting in front of you who wants to get out of a 100,000-euro contract. This combination of psychology and strategy makes sales exciting.

Mark Reich

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