8 pointers for foreign HQd startups looking to start hiring in the US
At Glenborn we help earlier stage marketing and ecommerce Saas firms make their crucial sales hires – from CROs and VPs to senior individual contributors. Most of the firms we work with are NYC or SF based startups but about 25% come from overseas – from Europe and Israel in particular. I am involved with the NYCEDC, UKTI and I run the NY Digital Irish group which all help foreign startups break into the US. Every few months I get to sit on panels focused on guiding startups on how to start hiring in the US. Here are the pointers I give them:
1. Are you really ready to hire in the US yet? Consider the alternatives. Think about contractors (1099 workers in US vernacular). Maybe using them or a sales agent is a better way for you firm to enter the US market.
2. Assuming you are ready, get prepped to hire.
a. Incorporate with a lawyer and get prepared to hire with offer letter samples / employment contracts etc. Get an EIN (tax id), accountant, payroll and benefits provider.
b. Choose your location. Think of your sales model. Inside versus outside sales and associated labor costs. Where are your key verticals located? NYC covers a lot of bases (Financial, pharma, agencies, media) but CA, for example is better for Tech vendors, gaming and Entertainment. Move to the area closest to key customers and partners.
c. Get an office. With so many coworking options this is easy and cheap in most us cities.
d. Get local case studies and localized collateral fast. “Ss” become “Zs”! Acronyms like ICT are not used here so test your lingo first.
3. Go local fast. Hire Americans. A few HQ transplants work for a while but the quicker you hire local the better. This is especially true the further away from the major cities you get.
4. Get your recruitment act together before you come. Hire an agency. It is hard enough to sell your product in a foreign land from scratch so you should definitely outsource the recruiting. Local knowledge is key. Don’t rely on job postings and inbound responses to those postings or ads. Inbound applications in the US are generally of very poor quality.
5. Differentiate yourself in your outreach and interviews Remember candidates are bombarded by choice! For Salespeople expect to be asked lots of questions around how you stack up relative to US competition. Here are some things to consider in differentiating yourself:
- Have a good back story on your history / founding.
- Show them money raised not revenues! That’s what US startups do – in the US your revenues are not public so why share if they are detrimental to your pitch – your US competition generally doesn’t do so.
- Be aware of expectations around benefits- healthcare, 401k etc in making yourself competitive. If you don’t have them in place you will not be competitive.
- Play up the international factor! From my experience American candidates love the mystique of working for a foreign startup and the implied international travel.
6. Interview pitfalls and tips
- Beware of cultural differences. Americans (especially the sales folks) tend to be more confident and assertive on their abilities than Europeans. This can-do attitude that makes the US the leader in the Startup world can trip you up when assessing candidates. Add a pinch of salt to most interviews and use your local agency to help you differentiate.
- Learn the sports lingo because you will hear those phrases a lot – “ballpark”, “out of left field”, “slam dunk”, “home run”, “batting average”, “Hail mary”. 20 years in as an expat and I am still learning them!
- Beware of legal pitfalls. Certain interview questions can be a no-no over here and this is a litigious society so better not to get in trouble before you start.
- Spotting sales talent. Historical performance is generally a good indicator of future success. Take a read of Topgrading for sales, learn what a W2 is and ask for historical w2 performance.
- Spotting the right fit. Remeber that if you are only looking to make one or two hires initially, make sure that person is mature enough to work very independently and can handle the stresses of cultural differences and time zone issues. Get your recruitment firm to help you spot those types.
7 Paying people.
- Salaries. Get up to speed on market rates for the roles at hand. If you want to get a sense for the market rate, ask your on-the-ground recruiting firm. We will gladly give you the scoop on the areas that we hire for (sales for marketing tech and ecommerce tech firms).
- Options. If you don’t offer Stock options you will be at a competitive disadvantage versus local hirers. Options for everyone is the default expectation.
- Benefits – healthcare and retirement offerings like 401k are crucial.
- Terminology. Get used to the hiring lingo. W2s, Base / OTE (on target earnings), exempt versus non exempt.
8. Remember “At will employment” is a 2 way street.
Employment here is generally “at will” which means anyone can break the relationship at any time. This flexibility makes the US very hiring (and firing) friendly. This works 2 ways so be very aware that loyalty is thinner on the ground. Work on your culture and perks to keep folks happy.
We hope these tips can help you make the smooth transition to making the first hires in the US. If you are looking to do this in the near or medium term, feel free to reach out to me through Linkedin.