Compass
Anchor
Telescope
Pendulum
Index Ventures
ExpansionPlan
Only a small proportion of European tech companies that expand into the US grow to the scale of global category winners. We have distilled the strategies adopted by the winners into four distinct archetypes: These are organisational templates that startups can follow as they expand into the US.
Now discover your archetype…
Anchor
Tethered, like an anchor, in Europe.
For companies with a larger opportunity in Europe and the rest of the world, and a US market representing 15–30% of TAM, the centre of gravity is likely to remain in Europe. The best way to succeed in this archetype, is by building a relatively autonomous US GTM (go-to-market) team, with a strong US-dedicated leader.
The Anchor archetype is common in situations where US expansion comes later in the journey. At this point, you will have a substantial European business to protect and grow, and a more mature leadership team in place. It will take some time for the US to become as significant a market, so you don’t want to pivot your attention and organisation there, at least initially.
Notable Anchor startups
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Compass
Built in Europe, sold in the US.
For companies with a dominant (>50% of TAM) US opportunity, as well as the ambition to pursue it, the organisation and leadership as a whole needs to pivot to the US as its new ‘true North’. You will gravitate towards a setup where the bulk of R&D (engineering & product) remains in Europe, but the CEO moves to the US, and your GTM (go-to-market) teams are focused there – “built in Europe, sold in the US”. Over time, a new set of global functional leaders is hired in the US.
Compass is the main archetype for enterprise software startups, but is much rarer for consumer-oriented startups.
Notable Compass startups
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Pendulum
Distributed customers,
distributed organisation.
For companies whose US market size falls somewhere between 30–50% of TAM, it can be challenging to decide whether Europe or the US should hold the centre of gravity. Pendulums are usually companies that have delayed their launch into the US market. By the time attention turns to the US, the organisation is more mature, with an established leadership structure in Europe. Competitors in the US may have also moved ahead, limiting the landgrab opportunity.
As traction builds in the US, and the growth potential is proven, the company needs to divide its attention. Over time, the organisation, founders, and leadership spread out across continents. A global mindset is essential, plus a tolerance for extensive travel, and calls at all hours of the day or night.
Notable Pendulum startups
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Telescope
Focus on US, through a lens
located in Europe.
This is the main archetype for startups when distribution is self-serve, or through app stores or digital marketing channels. The US might represent a large portion of your total addressable market, but the bulk of your leadership and headcount can remain in Europe. Your organisation is like a telescope, able to focus on the US market and customers, through a lens located back in Europe.