8

Scaling up
After establishing your initial presence in the US, and gaining some early
customer traction, the challenge shifts to your model for scaling. How should
you design your increasingly complex global organisation, and your global
leadership team?

Leadership talent
There is now a fairly deep pool of talent in Europe across all functions required
by startups - technical, commercial and operational. It is growing all the time,
and extends well beyond London - to Berlin, Paris, Amsterdam, and elsewhere.
However, there are still only a handful of outlier tech successes that have been
built in Europe. This means that the talent pool for leaders with proven
experience of high-growth tech companies at-scale is still very shallow. This is
true across all functional areas. The dominance of US companies, and more
specifically, companies from the San Francisco Bay Area, is reflected in where
this top leadership talent can be found.

On the journey from startup to listed company (or equivalent scale), we

typically see two or three iterations of executive leadership, reflecting the
evolution of capabilities that are required at different stages of growth. This is
not a hard rule, and there may be one or two executives who stay and grow
with the business through different stages. But on average, each function will
see three successive leaders. We can characterise these stages as early,
middle, and late.

The sequencing for these stages differs by business model, but we set out
below a typical journey for a SaaS company, together with estimates for the
Scaling up
number and location of experienced leadership candidates at each stage.
 SaaS scaling journey - leadership requirements and talent pools

Stage of Number of experienced Example leadership role and

scaling executives per function focus:
(ARR as a Sales Function
proxy)

Early 1,500 proven US candidates VP Sales

(Series A-B) 60% in the Bay Area - Experimenting with sales
$0 - 15m 200 proven European candidates motion
- Finding market-fit (client size,
sector, use-case)
- Player/coach, hiring and
mentoring initial sales team

Middle 500 proven US candidates CRO 1.0

(Series C-D) 70% in the Bay Area - Scaling and optimising
$15 - 75m 50 proven European candidates repeatable sales motion
- Full customer lifecycle (upsell &
resell)
- Pipeline management
- Strong methodology for sales
metrics
- Ramp-up
- Regionalisation and
verticalisation
- International (Europe)

Late 150 proven US candidates CRO 2.0

(Series E to 80% in the Bay Area - Nurturing strong leaders below
Listing) <10 proven European candidates them
$75m+ - Building channel sales
- International (APAC, Latam,
MEA)

The most ambitious European companies will aspire to hire experienced and
proven
Scaling up talent. By the time you reach the ‘middle’ stages, this will almost always
involve candidates in the US, either to hire in the US, or to relocate to Europe
 from the US.

“Companies also need to be open to step-up candidates.”

Pat Haggerty
True Search

Relocating leaders
Within the US

It is a common misconception that relocation is much easier within the US than

in Europe. Whilst this may be true for junior or mid-level talent, it is rare for
executives.

“Relocations of execs in the US, particularly from the West Coast, are super-
hard, particularly with Covid-19. I’ve actually done more European relos from
the US over the years. It’s actually getting harder now, with dual-career
couples juggling priorities, and greater concern for protecting work / life
balance.”

Mannie Gill
Renovata & Company

“If one thing is mis-understood, it’s the likelihood of candidate relocation at

exec level. In the last four years, I haven’t done a single one.”

David Ives
True Search

On the other hand, commuting is more common for executives in the US than
in Europe,
Scaling up and offers another way of broadening the talent pool. This doesn’t
work between the East and West Coast- the distances are just too long to be
 work between the East and West Coast the distances are just too long to be
viable over any period of time. However, there are many examples of execs
who commute weekly along the East Coast (particularly between New York and

Boston), or West Coast (e.g. between Los Angeles or Seattle, and the Bay
Area).

“If a candidate hasn’t proven themselves to be capable of a commuting

arrangement before, that’s a red flag to me.”

Pat Haggerty
True Search

Relocations to Europe

For relocations from the US, we advise looking for US candidates with some
‘hook’ to Europe. There is a growing pool of expatriate Europeans in Silicon
Valley, who now have young families and/or ageing parents, and who are
therefore open, or even keen, to return to Europe. Inversely, they may be
American executives, with a European partner who is keen to return.
Alternatively, they may have spent some time studying or working previously in
Europe, or simply have run international teams involving frequent European
visits. Another receptive talent pool we have seen are South Asian expats on
the West Coast, who want to move significantly closer to home. Whilst it can
be tricky to pre-screen candidates for some of these characteristics, our
experience is that you need at least one of these hooks. Beware of US
candidates whose interest boils down to “I want an adventure, and Europe
sounds fun.” Not only might you waste time on ‘tyre kickers’. The bigger risk is
hiring someone who then doesn’t work out, because they didn’t appreciate the
realities of moving to Europe, either personally or professionally.

Ensure that your shortlist of candidates in any executive search is therefore

weighted accordingly - eg 4 from Europe, and 1 or 2 from the US. Otherwise
you run the risk of drawing a blank.

Scaling up

“In my experience someone from Silicon Valley is as likely to relocate to

 In my experience, someone from Silicon Valley is as likely to relocate to
Europe as they are to NY or Boston.”

David Ives
True Search

Another common challenge with relocations from the US relates to

compensation. US compensation is significantly higher than in Europe,
particularly for equity. This difference partly reflects the higher average
experience levels of US candidates, and also the very high cost of living in the
San Francisco Bay Area. However, even adjusting for these factors, you may
need to re-think your executive pay-scales in order to compete for US talent. We
recommend also thinking about this in terms of up-levelling compensation for
your European-based executives. It creates resentment if a relocated US
executive is offered a much better package than their European peers. Often,
this is because companies have failed to increase compensation for their
existing executives in line with growth.

“US talent is far more focused on equity - you need to pay to play, and they’ll
do a lot of due diligence.”

Andrew Robb
Former COO, Farfetch

It is important to recognise the ‘pulling power’ of different European locations

for US candidates. Individual candidates will have personal preferences, but our
experience of ‘city appeal’ is as follows:

1. London - by a significant margin

2. Berlin, Amsterdam, Barcelona

3. Paris, Dublin, Copenhagen, Stockholm

4. Other locations
Scaling up
 Recommended Headhunters

For GTM hires in the US:

True Search - Pat Haggerty & David Ives

Renovata Partners - Mannie Gill

Daversa Partners - Gary Constance

For US to Europe relocations:

True Search - Nick Fairclough

Renovata Partners - Thomas Jepsen

Daversa Partners - Wendy Colvano

Distributed leadership teams

Successful US expansion implies that, for at least some functions, or time
period, company leadership will be distributed across the two continents. This
presents challenges, even for companies with a fully-remote model. The critical
factor to ensure success with a distributed leadership team is a willingness to
travel and meet frequently. This is essential for any executive in an organisation
split between the US and Europe, and the expectation needs to be explicit
before making any hire.

“Having remote leadership takes a certain kind of person - someone willing to

take late-night calls and frequent travel. There are lots of late nights, and lots
of jetlag. Not everyone has the stamina for it. Although we wanted our
people and leadership co-located, for the right person, remote can make
sense.”
Scaling up

A d R bb
 Andrew Robb
Former COO, Farfetch

At the earlier stages, it is important that leaders are co-located with their
functional team, until there is sufficient bench-strength to cover day-to-day
management. We see this most clearly with R&D leadership - engineering and
product leadership will remain in Europe for several years, before it is possible
to consider upleveling these roles in the US. But the recommendation applies
to other functions too - marketing, finance, operations, etc. When a functional
team is small, there is a significant advantage to co-location, making it easier to
establish systems and processes, and to train up more junior members of staff.

An exception to the co-location model is for sales leaders in companies with a

field sales model. Field sales teams are likely to be distributed by their nature,
and also composed of experienced individuals, so it is fairly common for these
roles to be remote. But it is still preferable if sales leaders are located with
other leaders.

Engineering stays in Europe

In every outlier success story of Europe-to-US expansion, core engineering has
remained in Europe, even if commercial success pivots to the US. Once you
have built an engineering team that has in turn built your product, it is simply
too risky to move or replace it. Keeping your engineering team in Europe also
allows you to take advantage of a strong talent brand, lower costs, and higher
retention. Later-stage European companies sometimes add additional
engineering centres within Europe as they scale, in order to tap into new talent
pools. For example, King and Skyscanner in Barcelona, or Collibra in Wroclaw.
But there is still an advantage to keeping hubs relatively close in terms of
timezone.

“We reviewed hiring developers and UX in New York, but the cost of doing so
was astronomical compared to London.”

Joshua
Scaling up Jian
Head of Corporate Development, Credit Benchmark
 From our research into 275 European companies that have expanded to the US,
only 50 had any developers in the US. Much later in the scaling journey, we do
sometimes see the opening of a secondary engineering centre in the US. This
is typically triggered by the hiring of a US-based CTO.

“The problem with engineering talent in the US, particularly in the Bay Area, is
that there is just no loyalty. In Europe, they are genuinely excited about what
they are working on, and are more likely to stick it out through the highs and
lows.”

Danny Rimer
Index Ventures

What % of R&D Headcount do European companies have in the US?

Index Research, sample size = 251

Scaling up
“Keep technology in one location for as long as you can. If you need to expand,
 seed the new location with a mini cell and build a team around that cell.
Avoid building a technology team in the US, because of retention issues.”

Stephane Kurgan
Index Ventures & former COO, King

Organisation design
With the exception of engineering, the impact of US expansion on organisation
design varies widely, depending upon your archetype. A summary of each
potential journey is presented below, after which we will discuss some specific
recommendations for each of the archetypes.

Organisation Design and Leadership - division between Europe and US

Early Venture Stage Growth/Listing Stage

Stage

Archetype Organisation Leadership Organisation Leadership

Compass All in R&D in Europe: R&D in Europe All in US:

Europe Europe CTO G&A CEO
G&A in VP Product mostly US CRO
Europe VP Finance CMO
GTM GTM mostly CFO
increasingly US: US CPO/CTO
in US CEO CHRO
VP Sales
VP Marketing
VP Customer
Success

Pendulum All in R&D in CPO/CTO in R&D in Europe Distributed

Europe Europe Europe. GTM, G&A between
GTM, G&A Others distributed Europe and
distributed distributed US
Scaling up between
Europe and
US
 US

Anchor All in Mini-org in All in Europe, R&D in Europe All in

Europe US across all except US Europe,
GTM President Mirror-org in except US
functions US across all President
GTM and G&A
functions

Telescope All in All in Europe All in Europe, Mostly in Mostly

Europe except except Europe, except Europe,
BizDev team VP Business BizDev team, except
in US Development plus % of VPBD, and
Customer maybe VP
Support, and Support
maybe Finance and CFO

Scaling Compasses
The Compass archetype is characterised by a pivot of the whole organisation to
address the US market. After the founder has moved, and US commercial
traction is established, this has a ripple-effect on all other functional teams, and
on leadership. At the point of IPO or listing, the entire leadership team will be in
the US, along with about 50% of the overall team.

Product

In the early stages, your product team needs to be close to engineering - close
collaboration is critical. But following US expansion, the requirements of US
customers will drive your product roadmap. It is essential that your product
team is oriented to these needs, hearing them first-hand from customers, as
well as from US-based sales and customer success.

This can be achieved whilst keeping your product team co-located with
Scaling up
engineering, but you need to put in place rigorous processes to foster
i ti d ll b ti ith th US GTM t
 communication and collaboration with the US GTM teams.

“High-quality engineering talent and strong product experience means that

maintaining Israel as the center of gravity for R&D makes sense for most
Israeli companies. But this can’t be done successfully without heavy ongoing
investment in a culture of cross-border collaboration.”

Gil Dibner
General Partner & founder, Angular Ventures

However, what we usually find is the creation of a dual product team. The
majority (maybe 70%) of product managers will remain in Europe alongside the
engineering team, with a technical orientation. But a smaller team of (usually
more-experienced) product managers will be hired in the US, with an explicit
customer-orientation.

“Product leadership has to be close to customers and to sales. Our product

team is now split, with most of the senior PMs in the US.”

Peter Bauer
CEO & co-founder, Mimecast

At later stages, with the product organisation growing in complexity, the

pressure builds to hire an experienced leader - someone with the gravitas to
counterbalance demands from the sales team, whilst capable of maintaining a
consistent and integrated product roadmap. The talent pool of proven Chief
Product Officers is very heavily weighted to the US, which results in a further
pivot towards the US. This individual will often also oversee engineering,
through a VP Engineering direct report based back in Europe.

GTM
Scaling up
Sales and marketing organisation and leadership will rapidly pivot to the US,
 reflecting the growth opportunity and focus, as well as availability of talent. This

naturally creates tensions during the transition, particularly if early GTM

leadership is already in place in Europe.

“It has been tough matrix-managing a lot of people with hard dotted-lines to
our Lausanne functional leaders. It’s the biggest challenge.”

Mary Beth Vasallo

VP America, Nexthink

Over time, you will probably appoint a VP Sales (Europe), responsible for sales
activity across the whole region, and reporting into a US-based CRO. If
European R&D is in a secondary hub, the European GTM hub may well be in a
different location - London or Amsterdam being the most likely. For example,
Collibra and UiPath have both chosen London, despite R&D being centred in
Brussels and in Bucharest, respectively. For further insight into building out
European GTM operations, read the Index Ventures handbook ‘Expanding into
Europe’.

G&A

As the commercial focus shifts to the US, functions such as finance and legal
will tend to follow, albeit at a slower pace. The ‘2.0’ leadership hires are likely to
include a US-based CFO, General Counsel, and Chief People Officer.

Scaling Anchors
In the Anchor archetype, US expansion involves the creation of a condensed
mirror-org across GTM and G&A functions, and hiring a US President.
Expansion tends to be later in the journey, by which point ‘2.0’ European
functional
Scaling up leaders are likely to already be in place. The US is not expected to
become the dominant market in terms of revenue share, although it may
 g y
become the highest-revenue single country (20-30% of total). At the point of

IPO or listing, the leadership team will remain entirely or mostly in Europe,
along with 70%+ of the overall team.

Matrix management in the Anchor model can be tricky. With most functional
leadership sitting in Europe, it is usually best to give significant autonomy to
the US, so that they can optimise for US market needs. In practice, this means
dual-reporting lines for US functional heads, but with the stronger line into the
US President for sales, marketing, and customer success functions. Ideally, the
US President will be responsible for the full US P&L, although this depends
upon your business model.

Unlike in the Compass, the product function usually stays in Europe alongside
engineering, although you may scale to having one or two US-based product
managers, focused on ongoing localisation.

“For our product teams, being close to customers is important, but being far
from engineering is a risk.”

Ingo Uytdehaage
CFO, Adyen

Scaling Pendulums
The Pendulum archetype poses the toughest leadership and management
challenges with US expansion. Distributed leadership works best when
functional teams are built on a distributed-basis from early on. In fully remote
teams, this approach is part of the DNA of the company. But if your initial
engineering team is centralised, a deliberate ‘remote-first’ decision needs to be
taken when hiring later for functions such as marketing and finance.

“Myup
Scaling advice is that if you truly believe your company is going to be big, don’t
accrue organisational debt; adapt to distributed leadership early, definitely
 once you’re post-Series B. Especially today, with remote working being more
viable and desirable.”

Daniel Ek
CEO & founder, Spotify

“We never had the whole exec team in one location, and this took a big toll on
my personal life. Running a distributed team needs you to have a very clear
vision on what you are trying to accomplish, and clear associated KPIs.”

JB Rudelle
Chairman & Founder (former CEO), Criteo

“I was focused on getting the best talent, so I accepted the trade-offs in

having a distributed leadership team: management tension, lots of travel, and
video conferencing. I can recommend this when you are in pure scaling
mode, and when the proposition is totally clear. But not at the stage when
you are changing things, and adding product lines, all the time.”

JB Rudelle
Chairman & Founder (former CEO), Criteo

“Having a distributed leadership team works fine for an early stage startup
where everyone is used to the rough and tumble, and are just working to get
things done. Collaboration is harder on the individual-contributor level, but at
leadership level, people make it work.”

David Helgason
Founder & ex-CEO, Unity Technologies

Criteo provides a good example of successfully navigating these challenges. In

2013, in the midst of hyper-growth, the CEO and founder, Jean-Baptiste, was in
Palo Alto.
Scaling up The CRO was in New York, the CPO was in London, whilst the CTO
and CFO were in Paris.
 “Sometimes there is no ideal org structure. A good strategy is to change the
design every couple of years, like multinational corporations tend to do,
keeping ideas and relationships fluid.”

Dom Vidal
Index Ventures

Scaling Telescopes
Telescopes are able to build a customer base in the US with little US
headcount. The core customer acquisition channel is usually self-serve growth,
which is run by teams back in Europe. Instead, US hiring tends to centre
around two functions:

Business Development and Partnerships - key distribution and technology

partners are in the US

Customer Support - proportional to the size of your US customer base

As you scale, you will probably hire a VP Business Development based in the
US, to run this function, although it will never become a large team. In terms of
headcount, the US support team is likely to become larger, depending on the
relative % of your US customer base. If the majority of your support team ends
up being in the US, it might make sense to have your global team leader there
too - ie VP Customer Support. Most other functional leaders are likely to remain
in Europe, even if they are individuals relocated from the US.

“The level of expertise you can find for certain roles in the US is beyond
anything that exists in Europe. We found this when we hired Danny [Head of
Platform Partnerships] and Brian [Head of Ad Sales].”

Riccardo
Scaling up Zacconi
Former CEO & founder, King
 An important caveat is that in B2B, Telescopes have a tendency to evolve into
Compasses. This happens when a software product based on a freemium or
bottom-up growth model, starts to get traction with larger enterprises. In this
case, the GTM model shifts towards sales, which requires people on the
ground. Zendesk, Dropbox, and Slack all evolved in this way. In Europe,
Pipedrive, the Estonian CRM software company, is also now shifting from a
self-serve to a more sales-driven model, and building a sales team in the US.
When this happens, the gravitational forces described in the Compass model
kick in - drawing the founder/CEO and the leadership team towards the US.

Archetype

Compass

Achieving hypergrowth and category

leadership from Romania to the US
Scaling up
About: UiPath designs and develops robotic process automation (RPA) and
AI ft
 AI software.

Founded: 2005, Bucharest, as DeskOver, pivoted and rebranded in 2015 to

UiPath

Fundraising: 2015 $1.6M Seed

2017 $30M Series A
2018 $153M Series B
2018 $265M Series C
2019 $568M Series D
2020 $225M Series E

Fundraising to date: $1,243M

US as % of TAM: >50%

US % revenue: >50%

Headcount split: 2,700. 30% US, 43% Europe, 27% RoW

GTM: Field sales, channel sales

Leadership location: All in New York, except co-founding CTO in Bucharest,

and CPO in Seattle

Engineering location: Bucharest and India

Founder location: Splits time mainly between Bucharest and NY

Founder/CEO: Daniel Dines

History

Daniel Dines and Marius Turca (CTO) founded DeskOver in Romania in 2005. It
was auplifestyle business, making $300k a year providing automation libraries
Scaling

and an SDK Developers discovered the software through SEO and Adwords
 and an SDK. Developers discovered the software through SEO and Adwords,
and their users included teams at IBM and Microsoft.

“In the beginning my motivation was to achieve the minimum wealth I

needed to have a decent life. But to be an entrepreneur you need the hunger
to achieve something from deep within.”

Daniel Dines
CEO & founder

Daniel’s eyes were opened to the RPA opportunity when a customer told him
that they were using DeskOver for task automation.

“We were building an engine, and selling that engine to other garages...we
didn’t yet know what we could do with it. Until somebody told us ‘you can
use it to build an airplane’.”

Adrian Dorache
Early developer

The shift to RPA

In 2012, with a team of ten, they built a basic RPA product aimed at SMBs. At
the time, they were bootstrapping the company through consulting revenues,
which was a distraction.

“You’re much better off raising money through an accelerator programme. But

in our time that just didn’t seem possible from Romania.”

Daniel Dines
CEO & founder

Scaling up
With hindsight, the team felt that they went in the wrong direction for a few
 g , y g
years.

“We launched our product too slowly. We polished it too much, and we killed
it too late.”

Daniel Dines
CEO & founder

The turning point came in 2014 when they were contacted by a major Indian
BPO who was pioneering RPA, and who wanted to work with DeskOver. Daniel
sent a team of 3 to India for three months, to get immersed in the problem and
implementation.

“This was an astral moment, and I felt it could be our break. We didn’t think in
terms of ‘product/market fit’ back then, but looking back, this was what got
us there.”

Daniel Dines
CEO & founder

From DeskOver to UiPath

Between 2014 and 2015 the team grew from 10 to 100. They grew their
enterprise customers from 100 to 700, and in 2015 changed their name to
UiPath.

Customer leads were still almost all inbound, through a free-trial offer. But
deepening relationships with systems integrators (Cap Gemini, Cognizant, and
others) were creating a strong channel to enterprises. EY Romania was a key
strategic partner, and they got UiPath in front of global corporations.

In 2015, UiPath raised a $1.6m seed round, and flipped to a US topco.

Scaling up
 The path to scale

In 2016 they reached $5m ARR through an inside sales team in Romania, who
sold remotely into the US.

“You can build good relationships remotely nowadays - we were introduced to

GE via a partner, and our Romanian inside sales team closed it at $300k.”

Daniel Dines
CEO & founder

Enterprise products were rolled out, and offices opened in London and
Bangalore.

“Web traffic grew from 10k per month in 2014, to 1.5m in 2016. This indicated
a much broader base of interest beyond individual developers.”

Daniel Dines
CEO & founder

Shift to the US

2017 proved to be a huge year for UiPath on multiple fronts. In January, they
hired a US Sales leader following a search process. He was solid, experienced,
and ran the US until recently, building inside and field sales teams. A top
Romanian sales rep moved over to support him. Pre-sales was covered through
a lot of travel by the Romanian team.

Daniel started spending four or five months per year in New York, often with his
wife and baby.

Scaling up
“My being in NY wasn’t significant for closing US sales. But it helped for
 hiring US execs.”

Daniel Dines
CEO & founder

In February, Forrester ranked UiPath as a leader in RPA, which made a material

difference.

“The ranking counted a lot. It matters what analysts say. Besides just making
sales, your product needs to be very good, and by the time this report came
out, we were a company that delivered. This is important, because big
companies want to deal with big companies.”

Adrian Dorache
Early developer

In April, a large Series A provided fuel for expansion. By this point they were
servicing 200 enterprises (40% Europe, 30% US, 30% Asia).

By the end of 2017, they had also built a field sales team of 40 across Europe,
the US, and Japan. They achieved $45m in ARR, and doubled their direct sales
contribution. Overall, headcount grew from 250 to 500, across 10 offices.

Over the next two years, hypergrowth continued, to $150m ARR in 2018, and
$300m in 2019. In parallel, Daniel raised three huge rounds, taking the company
to a latest Series E valuation of $10.2 billion.

“Our culture is built on humbleness. What can make us successful is really the
desire to do something better, to become better. Only people who think from
a position of humbleness, can improve.”

Daniel Dines
CEO & founder
Scaling up
 Engineering and Product
Securing engineering talent in Romania was initially tough, because employees
were not willing to take the risk of joining an unproven startup. But there was
some success, including a 2016 developer hire who now runs the Romanian
engineering team.

“Romania was not a good place to build a business. Although there is good
engineering talent they are scared of startups. Our success should change
the ecosystem. It shows that we’re now in a global era, when it doesn’t
matter where you start, if you have ambition and a good product.”

Daniel Dines
CEO & founder

“We had product owners in Romania, but really they were technical program
managers. Effectively, I was running product for a long time.”

Daniel Dines
CEO & founder

In 2018,they opened an additional engineering centre in Bangalore.They saw

AI/ML integration as key to product innovation, so hired a CPO in Seattle from
Microsoft. This has led to building a 100-strong engineering and product team
there, focused on innovation.

However, the core engineering is still mostly carried out in Bucharest.

Marketing & branding

Scaling up

C i h i i GTM f h US C i f ll i h
 Compasses pivot their entire GTM focus to the US. Companies following the
other archetypes, however, need to make deliberate choices. These are often

trickiest when it comes to the marketing function, particularly in B2C, where

marketing rather than sales drives customer acquisition.

Analysing the location of marketing teams in nine later-stage companies reveals

differences in approach. However, what is clear is that marketing rarely pivots
over to the US. The function usually stays unified, and close to the CEO in
Europe.

“It’s a Google and Facebook world, which means you can run or at least test
all propositions centrally.”

Andrew Robb
Former COO, Farfetch

“Consumer brands have to feel as though they came from the region and have
to rethink positioning of their brand and cultural messaging for the US.”

Sofia Dolfe
Index Ventures

Location of Marketing Teams in late-stage companies (non-Compasses)

Company Archetype US Marketing Team Location Marketing

Headcount Leader

Farfetch Anchor 200 of Almost all in London 5 in US London

4,000 - brand

TransferWise Anchor 173 of Almost all in London 4 in US London

Scaling up 1,600 - content
 Adyen Anchor 300 of Mostly in Amsterdam 13 in San
1,500 US - local social, events, and Francisco

comms activity

Spotify Pendulum 3,200 of Split between London and New York

6,850 NY, across all sub-functions

King Telescope 315 of Almost all in London London

2,650

Supercell Telescope 100 of 774 Almost all in San Francisco San

Community in Helsinki Francisco

Lemonade Telescope 176 of 326 Almost all in Israel New York

(recent
CMO hire)

Pipedrive Telescope 55 of 600 Almost all in London 2 in US London

- channel marketing

Typeform Telescope 29 of 259 Mostly in Barcelona Barcelona

6 in San Francisco - product

marketing and comms

The factors which influence the location of marketing teams include:

Co-location - the benefits of co-locating marketing teams across sub-

functions - paid digital, social, CRM, content, brand, comms, etc

Talent - availability of marketing talent in HQ location - eg world-class in

London, much rarer in Helsinki

Proximity to product team - strong collaboration required, eg for acquisition

funnel-optimisation, growth mechanics and viral loops

Evolution
Scaling up of comms - the comms aspect of marketing is more strategic with
scale, encompassing internal comms, investor comms, and public policy.
 Staying close to the CEO is important

Localisation - certain marketing sub-functions tend to localise more obviously,

such as offline campaigns (TV/radio, outdoors, sponsorship), events, and
content

“Being such a visible part of the London tech scene was something we took
for granted. In NY, despite our guerilla marketing, and stunts including taking
our clothes off, we just didn’t get the same reaction! We weren’t local, so we
needed to earn the right to be anti-establishment.”

Joe Cross
Joe Cross, Global Marketing & PR, Transferwise

“The comms function operates at its best when it is close to the senior
executives who engage with external and internal stakeholders most
frequently. When the CEO and C-level moves, the comms team usually
follows.”

Vojtech Horna
Index Ventures

Archetype

Telescope

Scaling up
 Building a successful product and brand for
the US, out of Israel

About: Lemonade is a full stack home insurer powered by AI and

behavioral economics, and driven by social good.

Founded: Tel Aviv and New York, 2015

Fundraising: 2015 $13M Seed

2016 $13M Series A
2016 $34M Series B
2017 Corporate round
2017 $120M Series C
2019 $300M Series D

Fundraising up to listing: $480M

Listing: July 2020, NYSE

US as % of TAM: >50%

US % revenue: >50%

Headcount split: 380. 37% US, 55% Israel, 8% RoW

Scaling up

GTM M bil d b l f
 GTM: Mobile app and web platforms

Leadership location: Leadership split between Israel and US

Engineering location: Israel

Founder location: Israel

Founder/CEO: Daniel Schreiber, CEO & co-founder Shai Wininger, COO &
co-founder

Founding story

Lemonade was founded by Daniel Schreiber (former president of Powermat)

and Shai Wininger (co-Founder of Fiverr), in 2015 in Israel. Both of them were
experienced tech entrepreneurs, match-made by investor Michael Eisenber of
Aleph VC, as they were searching for their next ventures.

In February 2015, they began broadly brainstorming huge businesses and

industries - something that could be explosive, and make a dent in history. They
stopped when they got to insurance, and realized the untapped opportunity.
They knew nothing about the industry, but used their outsider status, and first-
principles thinking, to develop a disruptive concept to be an end-to-end fully-
licenced insurer, controlling the entire user experience. Their vision was to build
an insurance brand that consumers loved, aligning their incentives with their
customers’.

Launching in the US via New York

Daniel and Shai knew that disrupting the industry meant cracking the US
market, so they focused on it from day one, even while operating out of Israel.

They chose to launch in NY, because it is one of the strictest places to get a
license;
Scaling up if they could prove themselves there, they figured further roll-out would
be much easier.
 be much easier.

It was a challenging time while they worked on obtaining their NY operating

license. During this time they were approached by both the UK and Israel for
their initial launch. But they refused and stayed true to their original focus. In
September 2016, with licenses in place, Lemonade launched in New York.

“It’s part of our values to do hard things! We didn’t start the company to take
the easy route, so we persevered in making NY work!”

Gil Sadis
VP Product

After this they rolled out across the US quickly, adding 7 new states in 2017, 13
in 2018 and 6 in 2019.

Pivotal hires, building the US team

Ty Sagalow, a seasoned insurance executive, was hired in NY as Chief

Insurance Officer. Dan Ariely, the world-leading behavioural economist, joined in
2016 as Chief Behavioral Officer. Hiring great people from the start helped to
set them up for success, raising the bar for further hiring.

Building a consumer brand

Gil joined Lemonade in 2015 as the first product manager. He was inspired by
Shai’s passion, and also excited to work with Dan Ariely. The chance to build a
world-leading consumer brand proved too enticing to pass up.

Shai masterminded the brand concept, alongside the VP Comms and Gil. They
would watch insurance ads for hours, and then brainstorm. They wanted to
change
Scaling up people’s experience of insurance; in a highly-conservative industry that
people love-to-hate, they would develop a brand that people love. They wanted
 to be selected on the basis of brand, and not on price. They wanted their user
experience to mirror that of tech companies like Spotify, Uber, or AirBnB.

Transparency is a core tenet for Lemonade. They shared their bank account
statements, and wrote easy to understand terms and conditions for their
insurance policies. They gained a cult following - for example, by refusing to
insure assault rifles, or guns above a certain value, and by not investing in coal
or environmentally-damaging companies.

“Our leadership was brave enough to risk that half of the US population might
turn away from us, but that the other half would love us.”

Gil Sadis
VP Product

Building product from Israel

Shai, Gil and others in the product team travelled to NY constantly. They parked
themselves in a Starbucks and asked people to try out the app, doing hundreds
of sessions of user-testing, focusing on the UX and micro-copy. Shai was the
product visionary - and remains so today.

They had the benefit of time while waiting for licenses, and being very well-
funded.

“We were lucky. Sector sluggishness gave us a first-mover advantage. We

benefited from the numbness of the industry - we shook it up with innovative
branding and marketing!”

Gil Sadis
VP Product

The Lemonade
Scaling up app launched with strong conversion rates. The first product
was renters insurance - a simple use-case with a reasonable, underserved
 audience, which had been largely ignored by traditional insurers, so it had a
lower CAC (customer acquisition cost).

As the offering got more complex, it became harder to be so far from the
customer base. So the product team travels a lot, on rotation. They also rely
heavily on user data - from the app itself, from user surveys, from support
tickets, and through strong communication with their NY and Phoenix
customer support teams.

They have since also launched in Europe - starting with the Netherlands and
Germany.

Global team set-up

The founders remain in Tel Aviv, alongside R&D, growth and comms. In this
respect, Lemonade is organised along the lines of the Telescope archetype.
They feel that keeping comms and brand close to the founders and product has
ensured coherent messaging and alignment.

Several members of the executive team are now in New York, including the
Chief Insurance Officer, CFO, VP Business Development, and more recently,
the CMO. Daniel travels to the US every 3 weeks.

In this sense, Lemonade also has some characteristics of the Pendulum

archetype, and the company presents itself in the US very much as a domestic
player.

Consumer marketing expertise is rare in Israel, which has been so much

stronger in B2B tech. Lemonade hired for potential, developing people over
time. They also managed to relocate a lot of talent, for example in copywriting.

Communication and Travel

Lemonade is a very data-driven company, which allows them to be location-

agnostic.
Scaling up
 “Now we have such scale, the data really yields insights.”

Gil Sadis
VP Product

They emphasise the importance of internal communication, via Slack, travel

between offices, and beyond.

Lemonade’s Top Tips

1. Invest in your brand, taking care with micro-copy, design, and UX. Consumer
expectations now are way higher than they were in the ‘lean startup’ days of
2009

2. It is possible to start a company without being on the ground, if you are

laser-focused on your target market. Start with the smallest niche possible in
the beginning, and build out from there

Fundraising in the
US 10

Scaling up