Germany SaaS Hiring / Start-up Overview
Our Investigations suggest that a high proportion (68%!) of German Enterprise SaaS Executives would rather work for a North America employer. So why do many SaaS firms find it difficult to attract, hire and make their German operations successful?
The main explanation would seem to be a lack of appreciation for German business culture, a lack of appreciation of the German economy and a lack of understanding of the German social security system as well as cultural differences in German business buying habits. The feedback from our German network suggests that US firms are in too many cases still approaching Germany without making the necessary business planning and hoping that the revenue will stream in! You can’t be anymore wrong!
Sales cycles and time to market success takes longer in Germany than in the USA or the UK so realistic time planning is required. Furthermore, SaaS companies (started outside of Germany) will need to abide by very strict data laws often meaning that data needs to be hosted locally and not outside of Germany.
SaaS start-up’s looking to find success in Germany must offer a unique solution and something the established, local vendors such as SAP are not able to provide as German firms can be tremendously sceptical of purchasing from non-German SaaS firms with no local references.
Start-ups appeal less to Germans?
Unlike the UK, The Netherlands, Sweden or France where US start-ups have great appeal, a new US start-up venture can sometimes be seen as less appealing to the German candidate pool. The German market is a graveyard of failed US start-up companies that did not invest in a legal GmbH entity or had no vision beyond a sales executive working from a home office. However those SaaS firms that do not cut corners and have a concrete business plan to approach the German market with a vision for growth will find a pool of talented A-player executives that will want to learn more about your SaaS firm. The key to building a successful entrance into the German market is to employ a hands on and vigorous commercial sales leader that understands both American and German business culture and ideally will have worked in other high growth international SaaS environments.
Quotes from VP level German SaaS Execs:
“Having worked for an US company, there are more points to address like: investing in field service, pre-sales, help desk (German!), translation of software and marketing stuff, not to forget to build contracts in line with German law and finally the willingness to pay the needed money for at least 3 years. You need min 10 people to start, to set up the company and build the confidence that you take your plans really serious. Hiring only a sales manager, even it is a German, will not build trust. If you are not accepting these minimum requirements, you will fail.”
“If you want to succeed in Germany its absolutely key to have a highly localised strategy and go to market approach. Literally the same level of localisation as if European companies are going to do business in the US. Local leadership that speaks the language and understands the German culture, a physical representation and marketing specifically for the German market are only the beginning”.
For any questions around establishing your SaaS firm, please get in touch and contact Ben Watkins.