Many companies have already burned millions by expanding into the US market. Not so Sellics. Mark Reich has led the company’s rise to prominence on the other side of the Atlantic as director of sales. In an interview with Christoph Jost, Mark shares his learnings. He explains when the time is right for such an expansion, how he went about choosing a location in the U.S., and what criteria top salespeople must meet in his view.
Mark, with Sellics you succeeded in building up a significant US business as an initially purely German company. What was your key to success, what are your learnings that you can share with founders with similar plans?
Mark: Sellics was founded in 2015. During that time, a few underlying factors favored entry into the United States. The most important one: there were no established players yet. That’s why we saw the first signs early on that we would be able to establish ourselves in the USA. There are always two approaches: Push and pull. In our case, it was a clear pull coming from the market. We had built a strong marketing inbound engine early on and experimented in different markets. In doing so, we saw that there was a demand in the U.S. and were able to incorporate that insight into our product DNA early on, aligning our website accordingly and choosing the company name internationally. After a few years, it was clear that the U.S. would generate at least as much sales as the European markets.
We had built a strong marketing inbound engine early on and experimented in different markets. In the process, we have seen that there is a demand in the USA (…). After a few years, it was clear that the U.S. would generate at least as much sales as the European markets.
You were active in the US market from Germany for quite a while before you opened your office in the States.
Mark: In the case of a pull strategy, it makes perfect sense to first check from headquarters whether the existing sales motion also works in the market you want to enter. That’s why we first hired some English-speaking sales people in Berlin who worked during the US times. This worked well 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 be on site with people much earlier. But with a SaaS product for SMEs and also with other products, you can also gain experience from Germany for the time being. Especially if you have no experience in the target market, it is easier to find out which location is the right one and to better substantiate the investment.
Mark: The decision was made when we saw that we were reaching a customer segment in the U.S. where being local made a difference. We’ve seen traction no longer just from very small companies, but also mid-sized companies. That was the time for us to invest. The on-site presence has actually had a big impact as well.
You spent some time in your office in New York yourself at the beginning. Why was that important to you and why did you choose New York, a very expensive location?
Mark: Yes, as sales manager, I was in the U.S. a lot in the beginning, as was our CEO. We talked to our existing customers there about our goals for the U.S. 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. And we worked with consultants and freelancers who had experience in the industry and knew the peculiarities of the different cities and markets. This can be researched second hand, but my impression is that the personal insights are more helpful. Through the customers and consultants, we had some criteria for our location.
We ultimately decided on New York for two reasons. Firstly, because of the direct flights from Berlin, and secondly, because of the access to talent that has already done something similar. The infrastructure is also very distinctive. There are many service providers for recruiting, admin, etc. that you need when you have a team on site. Yes, you pay more in comparison than if you were managing the market from Germany, but you also gain speed.
We talked to our existing customers there about our goals for the U.S. 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.
You’ve now built sales teams in both Berlin and the US. What differences did you notice? Did you approach the hiring process and team building differently?
Mark: I have criteria for new employees that are fairly universal to the software field. You need people who have curiosity, the ability to learn, and are adaptable. I have not moved away from this in the USA either. What was different because of the remote office was that I was looking for experienced employees who could act independently. For example, our local management can estimate what salaries we have to pay, how the hiring process has to work. When we hired the first squad of experienced people, they were also able to train entry-level employees. We could not have done that from Germany.
We don’t need to talk about US salaries. In New York sales, everyone earns more than the average sales manager in Germany, but you have to get used to that and you have to make it up elsewhere.
The market in the USA is also much more flexible. Employees quit and are gone after two weeks, but the reverse is also much faster. We have therefore accelerated our hiring process to ten days. This has helped extremely. In Germany, the processes are now also becoming faster. Two or three years ago, the differences with the USA were much greater.
I was looking for experienced employees who could act independently. For example, our local management can estimate what salaries we have to pay, how the hiring process has to work.
You made a conscious decision to focus on sales after university and are still very passionate about it today. What is the fascination of sales for you?
Mark: After graduation, my primary interest was to start up. In my start-up, I was then responsible for the customer side more by chance, we divided the responsibilities among us co-founders. I then quickly saw how much potential there was in the area of sales. Especially for the SaaS industry, sales is a critical success factor and in Germany there was little technology-oriented knowledge in the area. So I specialized in order to bring skills that are not yet available on the market.
I also like the combination of art and science in distribution. Nowadays, sales is very tool-oriented, but you end up managing a team of 30, 50 or more people and making deals with customers. That’s where the art factor comes in. Data and tools are of little use when you have a person sitting in front of you who wants to get out of a 100,000 euro contract. This combination of psychology and strategy always makes sales exciting.
Christoph: What I would add from our perspective at FLEX Capital: You have to be able to handle pressure for sales. Especially in the growth-addicted startup scene, investors are quick to go to the CEO, who then forwards directly to Head Sales, and demand more revenue. If your team doesn’t deliver, this company has a huge problem. Having really smart people for sales who think in a differentiated way makes a very big difference for a company. Unfortunately, there are many people in sales who got into the field more out of necessity because they failed in their desired career, and few who made a conscious decision to go into sales.
Mark: I had few points of contact with the topic of sales in my university days, although the topic is strategically very important for start-ups today. In the USA, many more university graduates go directly into sales. In Germany, this is still rare and there is still a huge gap in sales talent. I believe that as more SaaS companies successfully establish themselves, the career path will become more attractive. More success stories would have to be spread, greater proximity to educational institutions would have to be established, and greater attention would also have to be paid to the topic in the startup community.
Data and tools are of little use when you have a person sitting in front of you who wants to get out of a 100,000 euro contract. This combination of psychology and strategy always makes sales exciting.