Philip Delvecchio, Entrepreneur in Residence at Starta Ventures in New York, shares his experience with startups coming to the U.S.
For the past four years, New York-based Starta Ventures has been one of the leaders in North America for providing acceleration services to startups from Europe, and most recently, also for those from South America and Asia.
Meet Philip Delvecchio, one of the leading mentors for foreign startups in the U.S. market, and one of our Entrepreneurs in Residence (EIR) at Starta Ventures. He is an operations expert, startup advisor, business owner, international speaker, and he has been involved in the Starta acceleration program since early 2019.
I’ve always had a strong passion for connecting different cultures and different people. In recent years, I joined an accelerator that was focused on supporting international entrepreneurs in their market entry into the U.S.
I started my own business to support these companies in greater depth by providing training, consultation and implementation services where we actually work with them as their partner in the U.S. as they scale their business. When I got connected with Starta Ventures I was really excited because Starta’s accelerator program focuses on helping these businesses do that, as well as helping them domestically grow.
Our role is new at the Starta Accelerator and I think it was a really great test. The way I saw my role was guiding the ship. Founders and I met once a week for about an hour, and we talked through their week and plan for the upcoming week, as well as bring in the different feedback they were receiving from different coaches.
One thing I was also able to do was fill in the gaps. Often times the founders would pick up on bits and pieces from the coaches but there would always be valuable additive information and strategy I could provide in our meetings. I helped them to implement and execute business development initiatives and messaging, and I did outreach for them around the advisory.
One of the startups I was amazed by is Capturica — a Starta Accelerator alumni. The rate at which they’re able to scrape data, and the accuracy at which they were able to measure impressions, is really top of the line.
The challenge for Capturica was that they were doing a lot in both markets, which reduced the scale at which they could do things here in the U.S. I remember that they were lining up maybe five calls a week with different prospects and I said that you guys need to be lining up five calls a day. They just didn’t know that it was possible because they didn’t have the bandwidth. They weren’t comfortable with the pace because they were doing too much. That was definitely a challenge.
One thing that’s really important and highly valuable when you’re looking to tackle two different markets is that you need a key stakeholder in the U.S. and a key stakeholder in the local country; you need to the right kind of leadership in both regions to keep things going without requiring too much back and forth. If you’re serious about the U.S. market, then one of the founders needs to commit to traveling to this market on a regular basis. You don’t have to be here permanently, though. You should find local partners who can help fill in the gaps in sales and marketing. I think Capturica is now in that process, but they are trying to close fundraising.
Of course, you don’t need a CEO in the U.S. until you have a real strong presence here. But you need a U.S. partner. I see two things done wrong when it comes to figuring this out and bringing on such a person. You either go too senior or too junior. If you go too senior you end up with someone with 15 to 20+ years of expertise in the industry, and he or she has their black book of contacts that they can tap into. But you’re an outsider and these people are used to selling larger companies or other well-known brands. So, when they go to meetings and it doesn’t work out they’ll blame it on your lack of a brand. They aren’t used to the scrappy environment of trying to build something from nothing.
Now, the reverse is that you get a really junior person who you hire for cheap, and you end up with shoddy work because they don’t know how to perform working remotely and they are still learning how to establish a process. You can’t expect someone to take low pay, work remotely with no team, not having the benefits of an office, and expect them to stick around long, unless they’re really brought into the company. I always say if you can, start to build that culture and team dynamic while you’re here, and then hire someone who is mid-level. Once that person gets the seeds of traction, then find someone who speaks English well, with a strong understanding of the product, and have them come to the U.S. to manage and build a team around that person.
In New York City, networking is probably the most effective channel that B2B startups can use to reach potential partners. LinkedIn, however, is the best digital platform for B2B sales and marketing. Every B2B company that wants to enter the U.S. market should take a look at LinkedIn, which has 500+ million members. It is the largest platform for Fortune 500 companies, and is also the №1 channel for marketing executive outreach. Founders need to be thinking seriously about their Linkedin strategy. At Capturica, with whom I worked as an adviser, most of their success was through Linkedin. They started doing a lot of automated outreach and saw strong results. On my end, I supported Capturica by finding the right people in my network and giving them a better understanding of the US Market.
I have to say that Capturica also made a good decision to start its North American business in New York City, which is one of the best markets for international companies in general. The advantages have a lot to do with time zones, and the presence here of the international community is higher than anywhere else in the U.S. You get everything you’d want from a Silicon Valley tier city, but there’s a much greater focus on diversity, especially international founders who bring a diversity of culture.
Capturica is a media marketing ad tech company, and New York is the largest market for that. Maybe Los Angeles has some competition, but if you’re looking for the right market, then you have to set up your office closest to your clients; it doesn’t matter from where you fundraise. You don’t need to be next to your investors, but you need to be close to your clients.
In the U.S. it is pretty cut and dry with investors; if the startup doesn’t have an office here then they’ll have to incorporate in the U.S. Investors prefer that they incorporate as a Delaware C. The other thing is traction. Investors will rarely invest in a company to help with their U.S. launch, but they will invest to fuel their growth here. A company shouldn’t be saying I need money to enter the U.S. market. They’re going to have to think bootstrap at first and get some validation before they can expect to get investor’s interest.
Once you get the validation and traction, investors will be happy to talk because you’ve proven that you can go into one of the world’s toughest markets as an outsider. I tell companies to get early traction or validation in the U.S., then return home and raise investment there. Once you have extra money, put it into your growth in the U.S. After you’ve started to show real progress, then you can go after U.S. funding opportunities.
Also, I’d like to recommend some books and videos. Simon Sinek has a TEDtalk called “Start With Why” that is still relevant today. In general, the concepts highlighted by Simon are often missed by international entrepreneurs. They should find highly acclaimed business culture books on building a team: “Delivering Happiness” by Tony Hsieh, CEO of Zappos, is really good. Another is called “Tribal Leadership”. These books will help inform their understanding of team culture, marketing, and sales in order for them to start and bridge their own gaps in adaptation.
In conclusion, a program such as with Starta Accelerator is an enormous opportunity for any Eastern European startup trying to establish a foothold in North America. First, with Starta you are in New York City, which is becoming just as important as Silicon Valley in terms of technology, but even more important, here you have access to many financing opportunities. Perhaps most important, Starta provides so much expertise, support and local knowledge that will give an enormous boost to any foreign startup that is trying to figure out how to do business in the USA. That assistance is of course priceless.