Understanding the contrasting startup landscapes of the US and Europe can be a maze for newcomers, especially in the B2B SaaS industry. The natural advantages, cultural differences, and distinct opportunities in these regions offer a fascinating study of contrasts and competition.
I’m Alan Gleeson, a fractional CMO, and in this article, I'll dive into an comparison between the two landscapes, analyzing their unique characteristics, strengths, and challenges.
Whether you're an industry veteran or just starting, this exploration offers vital perspectives to navigate the complex terrains of tech business.
Prefer to listen? Check out Alan's appearance on the CMO Convo podcast 👇
Comparing the European and American startup landscapes
A lot of the playbooks and marketing insights we get are all US-focused. People might be familiar with the US startup landscape through osmosis and pop culture, but setting up startups outside of that environment can lead to surprises. You specifically asked about the differences between the European and UK startup scene and the American one, and that's an essential area to explore.
Funding European startups
Undoubtedly, one of the key differences is resourcing. If you look at the typical raises in the US at seed and Series A rounds, they're often five or ten times greater than in the UK, Ireland, or Europe. This creates a very different dynamic. A two million seed round in an enterprise B2B software context here doesn't go very far if you're trying to aggressively generate extra leads. Paid acquisition is increasingly vital, so the resource gap becomes a huge issue.
We are a lot leaner and more bootstrapped here, which means there's more demand on time, and it can get frustrating. It's easy for a CEO to demand a certain amount of growth because someone in the US is achieving it, but it's not an apples-to-apples comparison. There are differences in cash, the number of people in a marketing function, and the tech stack.
In the UK, I'm used to working with small teams, particularly in the pre-Series B range. The US playbooks sound great, filled with things you "should" be doing, but they often lead to an ever-growing list that forces knock-on effects not readily understood.
One example might be that smaller raises and more resource constraints in Europe force the marketing function to focus on demand gen and lead gen. US companies can afford a broader mix, including branding, product marketing, or even hiring growth hackers. However, in the early days, you might need someone focused more on market research and customer validation, which often gets eliminated in the rush to generate leads.
Moreover, the geographical and cultural factors play a significant role. In the US, you have a vast, relatively homogenous market, whereas Europe is more fragmented. The main English-speaking countries are the UK and Ireland, and then you have different currencies, political jurisdictions, and regulations, especially post-Brexit.
So, it's indeed a more challenging environment in some ways, but that's not me being down on it. There's still a very viable ecosystem here in Europe. It's just that it has very different characteristics, and American companies may not always be aware of these factors.
Understanding these differences is essential for adapting strategies and expectations to the local context, rather than blindly following playbooks that might not apply.
Talent challenges in the UK's B2B SaaS startup landscape
The talent scarcity is a real challenge, but there are creative solutions. Models like the one I operate, where experienced professionals contribute on a part-time or consultancy basis, can spread the experience load. This portfolio approach is quite adaptable and provides different options for companies seeking expertise.
Additionally, the rise of remote working has opened up the opportunity to plug into talent more broadly. For example, I've seen European companies hiring CMOs from the US, recognizing that their main growth market might be there. That leads to familiarity with the market and access to a broader talent pool, though it does require a more substantial budget, given the demand and supply dynamics.
While the talent landscape in the European and UK startup scene is indeed more challenging, there are innovative ways to navigate these difficulties. Whether through a focus on scale-ups, leveraging part-time expertise, or seeking talent internationally, there are strategies that can overcome the limitations imposed by the nascent nature of the B2B SaaS startup landscape in this region.
Building success as a B2B SaaS CMO in Europe and the UK
To be successful in Europe as a B2B SaaS CMO, you've got to be a voracious reader. The landscape is fast-moving, and it's not for those that think their learning stops at 25. You do have to have an appetite for keeping abreast of things because it's so fast-moving.
Another thing is being strong on data and analytics. There's an awful lot of data created by technology companies and software companies, and deriving actionable insights can be a challenging task.
There's almost so much data that it can be hard to find insights. Take Google Analytics, for example, which runs on most software websites. You need to apply lots of filters to the data. If you don't filter properly, you might make false assumptions about the traffic on your website. There might be a spam bot that hit you in February, or internal traffic from people in the office going onto the website every day. You have to be very strong with data, but it's got to be very focused on actionable insights.
Some softer skills that are really important include time management and prioritization. There's just always way too much to do, so you've got to be really focused on unit economics and making sure that your time is being aligned with the outcomes. Everyone wants to have an opinion on it, and there can be a lot of external noise. Prioritization needs to be key.
They're some of the qualities and skills that I think you definitely need. Then I guess, the other interesting one is, how much do you need to get into the weeds? You'll be operating in a domain, and you need to know that domain, understand the buyers, the buyer personas, the stakeholders in the purchase decisions, the software unit economics, and the tech.
But then how deep do you go on the various elements like analytics or PPC? Do you really need to get into the weeds? And I'd argue, probably not. You want to be able to delegate effectively.
Being a successful CMO in the European B2B SaaS landscape requires a blend of continuous learning, data analytics proficiency, soft skills like time management, and an understanding of the specific domain in which you're operating. Balancing these aspects while adapting to the unique characteristics of the European market is key to building success in this field.
What skills do startup CMOs need to operate in Europe?
Developing the skills necessary to become a successful CMO in the B2B SaaS landscape in Europe is a real mix, and I'd argue there's no one-size-fits-all approach.
I guess I'm not your typical CMO. My background in economics and marketing from a primary degree, coupled with an MBA, has provided me with foundations around macro aspects, strategic thinking, and unit economics. This skill set is somewhat unusual, but it underlines the fact that there are multiple paths to reach a senior role.
1. Continuous reading and learning
Having a voracious appetite for reading is essential. Of course, part of the trick is trying to know what to read since we're overwhelmed with content. I follow a couple of external writers or commentators that straddle everything from psychology to economics to data analytics. Over time, I've recognized that these writers consistently provide insightful content, although I must admit that there's an inherent bias in my selections.
2. Balancing hard and soft skills
In life, there are hard skills you need to know to do certain jobs, and then there are soft skills. Empathy, emotional intelligence, and good interpersonal skills are important aspects you're likely to develop through your journey through life.
3. Being aware of diversity and thought leadership
While I recognize the bias towards American male writers in my reading choices, I am consciously trying to follow more diverse backgrounds and voices, including more female writers. There's definitely a need for more thought leadership from European B2B SaaS professionals, and it's encouraging to see that it's coming with initiatives and networks focused on building that ecosystem.
4. Blend of experience and formal education
Having a background in economics and marketing, and even an MBA, can provide a solid foundation. But experience, learning on the job, and having a trial-by-fire approach can also shape your skills and understanding of the industry.
There's no essential playbook, and different routes can lead to this senior role, reflecting the complex and fast-moving nature of the field. It's a journey of growth and adaptation, where one must remain open to various sources of knowledge and constantly hone both technical expertise and interpersonal acumen.
The intricacies of marketing to a diverse European market
The dynamic nature of Europe's various business environments is a distinctive characteristic that makes it vastly different from the United States. Unlike the fairly unified business practice in the US, Europe's business environments vary significantly from one country to another. This presents unique challenges and opportunities for CMOs who have to navigate these different business cultures and adapt their strategies accordingly.
SaaS companies are an excellent example of businesses that need to cater to a global audience, starting with the big markets of the US and the UK, and expanding to other English-speaking countries such as Ireland, South Africa, Australia, and New Zealand.
Interestingly, the consumption of many software applications is weaker in Europe compared to these countries, with most of the early days skewed heavily towards English software applications, with Germany being a notable exception.
For B2B solutions targeting professionals, language barriers are less of an issue as many of these countries in Europe have English-speaking professionals. However, when a company is founded in a multilingual country like Belgium, the challenge increases. They have to cater to a domestic market that uses multiple languages such as Dutch, French, and German, all of which add to the complexity and cost of maintaining different sets of websites and producing content in different languages. Currency fluctuations and setting pricing for different markets also add another layer of complexity.
The challenges of international scaling and adaptation
It's important to note that while most companies aspire for global reach with a predominantly English solution catering for the US, UK, and Irish markets initially, the need to adapt based on data and market demand can't be overstated. Tools like Google Analytics can reveal where site visitors are coming from, allowing for possible localization if there are clear hotspots. However, the costs associated with this need to be carefully considered.
While it can create additional work, such strategic adaptation is necessary for companies to remain competitive. Factors like pricing pages and exchange rates can greatly affect a product’s competitiveness in the market. Moreover, other seemingly minor factors, like site speed, can also greatly influence user experience and site performance, especially for those targeting growth markets like the US.
There are tools available, like Pingdom, to help check the site speed from different locations, and it's something that has to be consistently monitored. Many businesses only discover these issues once it's too late, but experienced CMOs will be vigilant about potential pitfalls.
The value of experience and learning on the job
European CMOs face unique challenges, and it often involves learning on the job due to a lack of specific resources addressing these issues. From understanding FX impacts and site speeds to the importance of indexing content in Google Search Console, B2B SEO strategies, and creating an amplification plan for content, all these lessons add to their experience and equip them to navigate complex business landscapes.
While it may seem that European CMOs are 'scrappier,' terms like resourceful and resilient may better capture their approach to their role. Their experiences certainly make them different, but whether it gives them an advantage over US CMOs is up for debate.
US CMOs often have the advantage of a full stack team and a fully optimized tech stack early on, which can facilitate more sophisticated strategies than what might be possible in Europe. However, European CMOs' resourcefulness, which includes leveraging contacts or freelancers and their networks, cannot be overlooked. Both models have their benefits and challenges, and ultimately, the choice depends on the individual marketer and their preferred working environment.
The US vs European tech landscape: A comparative analysis
I think there will always be a gap between the US and European landscape, particularly when it comes to resources and opportunities. It's not just the 300 million people on the doorstep of the US or the more cash brought in at the early stage. There's also a richer ecosystem. The US landscape isn't uniform, and it’s pocketed around Silicon Valley and the West Coast, leaving large parts of the country on par with Europe.
Natural advantages, like having such a huge domestic market, definitely help the US maintain its edge. For instance, startups in Ireland and Finland, despite being brilliant, lack a natural advantage. Some even need to move early to the US to succeed, such as Stripe out of Ireland.
However, I'm neither despondent nor downbeat about the European landscape. Markets are evolving, growing, and can contain multiple successful players. The US might lead, but there is still plenty of room for European companies to be profitable and well-run. There's a shift in perspective occurring, moving away from the single unicorn model to recognizing the value of viable growing companies. With software, positioning is increasingly important due to declining barriers to entry.
Despite the US's natural advantages, they're not as strong when it comes to certain aspects of Europe. Many US companies will look at acquisitions in Europe since the market can be complicated. The approach to European software might be reframed, focusing on strong businesses that grow nicely rather than the historic VC-dominated model chasing unicorn outcomes.
Advice for new CMOs in the European B2B SaaS landscape
For those stepping into the role of CMO in the European B2B SaaS landscape, there are a couple of essential tips to keep in mind:
- Be data-driven: It helps to understand unit economics early on.
- Prioritization: Use tools like Trello, Teamwork, or Asana to prioritize.
- Time tracking: Toggle can be beneficial.
- Networking and learning: Utilize resources like the CMO Alliance and SaaStock, and platforms like Growth Mentor where aspiring CMOs can find guidance.
- Use your network: Reach out to people, look for mentors, and don't try to do everything on your own.
I've served as a mentor on Enterprise Ireland's scale-up program and seen firsthand how these strategies can set up new CMOs for success. Irish B2B software companies have benefited greatly from these practices.
The underlying message is clear: don't do it in isolation. Use your network, be open to learning, and set yourself on the path to success. It's an exciting journey ahead!
Got questions? Maybe you've got your own advice for navigating the European stat-up landscape as a CMO. Share them on the CMO Alliance Community!
