Collibra*, a data-governance and catalog software company that helps organizations gain competitive advantage by maximizing the value of their data, was founded in Belgium in 2008. But as the company grew, the founders realized that they needed to be closer to big U.S. enterprise customers—so, eventually, Collibra’s two founders moved to New York and opened a new co-headquarters.
Collibra’s story offers lessons for other European, B2B tech companies hoping to “hop the pond” to the U.S. and grow. A longer overview on this trend can be found here.
Below is a Q&A with Collibra Co-Founder and CEO Felix van de Maele exploring the opportunities and challenges in making the trans-Atlantic move.
Q: If you’re a European tech company looking to expand into the U.S. market—and want to open a substantial office there—when do you do it? How do you know when your business, and/or the market you’re serving, is mature enough?
We looked at the U.S. early on. We wanted to find companies that had a problem we could solve. When we were still based in Europe, we got to know potential customers through conferences and other events. I feel like maybe when a company gets seven to nine U.S.-based customers, it might be time for the founders to move. I feel like we made the move organically. But I believe when a company decides to move, it has to be a founder, or someone close to a founder, to move first.
In our case, my co-founder Stan (Christiaens) moved first. I finally went as well, and moved my family, because the situation just wasn’t productive anymore. I was spending over 50% of my time in New York. There was too much jetlag. But earlier, when I was doing more day-to-day product management work, it made more sense for me to stay in Europe.
Q: How specifically was it difficult for the business to be based in Europe, and serve U.S. customers?
Serving your customers becomes a lot harder. In the beginning, when you have very few customers, you need to do absolutely everything to make them successful. We were on calls with (U.S.-based) customers in the middle of the night all the time. In the end it meant customers had a lot of control over us. We also believe that presence creates opportunity. It’s very difficult to close a deal if you have to say to a prospect you won’t be able to visit them until a couple of weeks.
Q: What are the implications of a move to the U.S. on sales and R&D? Is there a faster pace of activity?
It’s hard to hire a VP of sales in the U.S. Sales people in the U.S. are really good at selling, especially themselves. It’s very hard in the beginning to really know if someone will be good or not. That’s why one of the founders needs to become local in the U.S. Otherwise, you just don’t know if things are working or not. Selling is also more of a black art, especially in the beginning when it’s not as repeatable yet. That’s another reason why one of the founders should move. The founder should be together with the VP of sales in every big sales meeting.
The thing which surprised me is how much more expensive scaling in the U.S. becomes. Part of that is location of course. New York and San Francisco are expensive cities.
Q: And what about R&D?
On R&D, initially we kept R&D in Europe. I think that works well, especially in the beginning. When we were at the point where we were selling three different products and had more than 100 employees, and felt we needed to modernize our stack somewhat, we decided to augment our R&D capabilities with some presence in the U.S. as well. The challenge broadly is that the gap between sales and R&D becomes even bigger. You always need to bridge the gap between the personalities of a sales team and an R&D team, but now they are further apart, and you need to bridge the culture gap between U.S. and Europe.
Q: Speaking of company culture: Having two offices across the ocean has to be challenging, in many ways, from a cultural perspective.
When you move to the U.S. and open an office there, the center of gravity does sort of change quite a bit. You have to make sure the people left in Europe don’t feel like the third wheel on the wagon. It all creates uncertainty—sometimes you feel like you don’t know what the guys in Europe are doing or the other way around. Ultimately, you need to figure out if you’re going to be a dual HQ company or really move the HQ. I don’t mean from a legal perspective but from an operational perspective. Where you hire your executive team will really dictate that. Both have pros and cons.
It becomes a big part of the job as CEO, to manage that well. You need to build much more thought and structure in the way you and the company communicate and make decisions. Scaling really rapidly is very difficult already; doing it simultaneously on two continents adds another layer of complexity that you can’t underestimate.
Q: For European companies considering a move to the U.S., how should they think through finding the right financial and go-to-market partners?
We raised our Series B from Index Ventures—at the time we had term sheets from both U.S. and European firms. Index was a good fit for us because they had substantial operations in both geographies. We didn’t want a Europe-only firm. By the time we were ready for our Series C, we raised from U.S. investors, Battery Ventures and Iconiq. At that point we were at double-digit ARR, and about half of our customers were in the U.S. So it made sense to build out a U.S.-centric, go-to-market team.
That made a lot of sense for us as the epicenter of the company–the founders, the executive team–had moved to the US at that time.
In our new investor, we were looking for someone who would push us and help us transform from a founder-led company to one with a real executive team. So helping us build that team, and recruiting, was a big focus. Battery, for instance, helped recruit our CRO Phil Carty. But scaling rapidly, especially in the U.S., quickly becomes expensive. It’s very important you have a partner on board that knows how that works and can support you in that. As a leader, it’s a real emotional transition as well.
Q: How did you decide exactly where in the U.S. to locate your new office?
Well, we were really focused on customer acquisition, especially large financial services companies, so ultimately, we chose New York. But there are pros and cons to different locations. New York is good in terms of time difference, in that it’s closer to Europe—six hours, compared to nine on the West Coast. But on the West Coast, clearly there is more talent in enterprise SaaS. Some people move to the West Coast at first and then reduce the size of their office there and open an office in a lower-cost location, like Chicago.
Q: What are the common pitfalls, based on your experience, of European companies that move headquarters to the U.S.?
Well, one is not moving a founder or a co-founder to lead the office. Another is hiring the wrong sales team. I think it’s important to hire more than one sales rep at the very beginning, so you can compare them. Otherwise, you probably don’t know what the problem is if one is failing. The other reality, overall, is that the move is going to cost you way more than you expect. Salaries in the U.S. will be two to three times higher than those in Europe. Office space will be more expensive. It’s hard to do on a shoestring budget.
This kind of move is obviously also a big commitment for a company. I would not have the attitude of, “Hey, we’re doing to try it for a year and see what happens.” You need to be in it for the long term.
Q: So you’re glad you did it? And you’re still in it for the long term?