This week’s TechCrunch 50 conference in San Francisco brought together a number of threads and stories which have been kicking around the back of my mind for while. A little like Borat, I’ve been asking the Americans a lot of questions (though hopefully without the accompanying chaos).
The first one seems obvious but is worth spelling out one more time: to launch a consumer web service or, increasingly, mobile application, America remains the golden prize worth shooting for.
It is a large, homogeneous market which speaks one language. It is quite simply a no-brainer to really go for it there. That has always had implications for European startups. How do you launch in a market when you are not actually in the USA, or headquartered there? How do you get traction? It is of course perfectly possible.
But many startups wring their hands about the issue and outside of trying to get a post in TechCrunch, it’s tough to get traction unless you have something which is innately viral. But this ‘launching in the US’ issue has been impressed on me even more this week after hearing about the experiences of startups like CloudSplit.
Watch my interview with them and witness how, towards the end of the video CEO Joe Drumgoole almost goes into an fit of ecstasy when I ask him whether attending TechCrunch 50 had been worthwhile. His reaction was typical of others I’ve spoken to – and I’m not just saying that because it was our conference.
Discussions like this have made me realise,once again, how useful it is for companies to build bridges between the US and their natural, native European markets. I have never been an advocate of just being in Europe.
The smartest startups launch internationally. But increasingly it’s clear to me that, if you are in the consumer applications space, you simply cannot afford not to launch specifically your startup at or literally in the US. That means tailoring your service so it looks and works like one of the locals, even down to using American English spelling.
I am also once again reminded of how smart companies like HubDub have been in launching their service at the US market. Out of the UK startups they’ve pretty much written the book on this, and I commended you to both the guest post by CEO Nigel Eccles and the presentation by his co-founder Lesley Eccles at the TechCrunch Europe conference earlier this year.
And there is of course just packing your bags and moving to America. It’s a hard choice but many startups have to make it. I just hope that, if they do, they don’t forget their roots, and they bring their knowledge, and their money, back to help other startups.
Another train of thought has come home to roost. Lately we’ve been hearing how hard it is for startups to raise early stage funding from VCs in Europe. If a VC goes in early into a company in Europe it is likely that that they will have to provide follow-on funding at some later stage.
That worked when the market was buoyant but they is no longer the case so they are just not starting in the first place. It’s quite clear that this is in part why the launch of new seed funds like PRO Founders has been driven by this market need.
But while here in San Francisco I’ve also come across European VCs who are simply not spending their money on consumer propositions in Europe. They are just not that keen. For business applications, yes, Europe, and particularly London, remains a great platform for business apps.
But talking to one European VC while I was here it became crystal clear that even the consumer web or mobile companies he was interested in backing in Europe were less interesting to him if they didn’t have plans to launch in the US.