Succeeding across the pond: Partner ecosystem business building in Europe
I recently sat down with Bernhard Friedrichs, founder of PartnerXperience, to talk about succeeding with European partner ecosystems. We explored the differences between partnerships in the US and Europe, and discussed the important things American companies need to understand if they want to expand into Europe. As a European immigrant to the US, this is something I’ve experienced first-hand, so I was excited to share my insights (and my mistakes). Bernhard is an international expert in partnerships as well so he had a lot of amazing input to contribute. You can watch the full conversation here (thanks to the Cloud Software Association).
Our conversation covered three broad area, with plenty of topics within each:
- US vs. Europe: key differences, opportunities, misconceptions
- Partnering across Europe: a deep dive into how it works
- Entry strategies and tactics for US companies
US vs Europe: key differences you need to know
Europe may be a union, but it’s not a country. It’s a patchwork of 27 distinct countries and cultures. And even within regional or linguistic categories like DACH, there’s very real diversity. Germany and Switzerland are pretty similar when it comes to risk aversion and regulation. Austrians are more easygoing on that front, but they’re very focused on issues like trust and loyalty. That’s a tough nut to track, especially for outsiders. So even within one bloc like DACH, it’s tricky: same language, but very different priorities for anyone trying to build a partner ecosystem.
Doesn’t everyone speak English?
Everyone can communicate in English, but in almost all European countries, you’ll get to the point where it’s essential to be able to work in the local language. And as Bernhard added, it’s not even just about being able to speak the language. It’s also about navigating the web of cultural norms and subtleties that go along with that - as he put it, “reading between the lines”.
Decentralization: geographical and virtual
Another key difference is that Europe is more decentralized than the US, so it’s much harder to set up in one location and grow. If you’re operating in the UK, you can probably get away with setting up in London. The same goes for Paris - everything in France happens there. But Germany is much more complex, and one location might not be enough: Berlin is good if your ICP includes startups and SMEs, but Munich is better for enterprise.
And because the geographical distances are so much smaller in Europe, in-person meetings play a bigger role. There’s an understanding that if it’s just a one-hour trip, why would you not show up? That can be a way to signal your commitment to the partnership - and those kinds of signals really matter.
Deal-making in Europe is more about trust, less about brand
Speaking of the in-person/virtual divide, I think that’s why trade shows are even more important in Europe. When I worked in Europe, I used to be very present at trade shows, to meet people, shake hands, and open doors. This is quite different in the US, where it’s more about showing who your investors and customers are - in other words, foregrounding your brand. Of course, trust and brand both matter, wherever you are, but there’s a definite difference in emphasis and priority. In the past, I’ve described this as the difference between “why not?” (US) and “why?” (EU).
And, by the way, when you’re dealing with continental Europeans, you need to be quite delicate about how you talk about your competitors. “You should partner with us, because your current partners lack these skills” may sound fine in the US (and to a lesser extent, the UK), but it’s likely to backfire in Germany.
Differences in legal regulations (or: why I like the IRS)
We wrapped up this part of our chat by looking at differences in the legal landscape. In the EU, privacy and data regulations are strict. More than that, they vary from country to country. What works in the UK might not (and often won’t) work in France. Unlike the US, you can’t rely on any general consensus that applies across borders. So it’s vital to get a handle on these differences, very early on, to avoid nasty surprises.
I experienced this myself, when running co-marketing campaigns in Europe. Afterwards, when I asked for leads, I was told that I couldn’t have them, because of GDPR constraints.
My advice for US companies operating in Europe is this: there’s a perception that US companies aren’t serious about this stuff. So be sure to have the conversation early on, with the relevant people in your partner organization, perhaps a data privacy officer. Get the signoff you need, so things can run smoothly afterwards.
Overall, navigating European regulations and dealing with tax authorities is far less straightforward than the IRS. So US companies should be prepared for their established routines to undergo what Bernhard refers to as a “stress test” as they adjust to very different conditions.
How European partner ecosystems work
Next, we took a deep dive into how things actually work in Europe. We began by discussing how localization happens much earlier. If you’re in France, you’ll need a French product, and fairly soon. Then, we got into the nuts and bolts of partner ecosystems in the European context.
In Europe, once you’re in, you’re really in
In the US, it’s generally easier to get past the first barrier: signing a contract, getting listed in a marketplace, getting a shoutout. But in my experience, next step - actually working together - is harder. That’s because people have a lot of partners, and you need to work to become that partner who gets brought into deals.
But in Europe, opening the door can be really tough. But if you make it over that initial reluctance and get that agreement signed, it’s actually easier to get to the good stuff. I’ve had cases where it took me a year to build relationships with European CEOs - but once I was in, I was able to close the door behind me. When competitors approached my partners with similar offerings, they stayed loyal.
Getting past “the bouncer”
As Bernhard pointed out, the step that comes just before that is the exact opposite. The initial meeting is actually harder to land in the US, because the market is usually more crowded, and you need to build enough brand credibility to “get past the bouncer”. In Europe, that vetting takes place within the meeting itself.
On a related note, I pointed out that first-mover advantage really counts in Europe, precisely because there usually aren’t so many companies doing what you do.
Never underestimate the influence of local players
What I learned from working in martech in Europe is that a great partnership in the US might not translate directly into results in Europe. It’s actually more important to connect with powerful local players who may not even be known outside their regional markets.
Even GSI relationships don’t help as much as you might think. Usually, you’ll still need to start from scratch.
Partnering motions we take for granted in the US aren’t as common in Europe
At this point, Bernhard asked me a really interesting question about the differing emphasis on integration and channel partnerships. In my experience, integrations are less emphasized - and perhaps less well understood - in Europe. It’s important to bear in mind that in general, partnerships are around 3-5 years behind the US. So you have to be prepared to spend more time explaining what you’re doing and why.
For example, partner mapping is now second nature for American partner managers, but in Europe, you can’t just send a Crossbeam link and expect things to happen. Co-selling is also trickier. You need to invest time in making things tangible to get people on board. That comes down to identifying strategic influence within partners’ sales departments, and working hard to create success stories that then spread to other AEs and open doors.
Co-marketing as a way to gain a foothold
All of this means that you need to have a long-term mindset. Things will happen on a longer timeline, and the work just has to be done. Personally, I’m a great advocate of using co-marketing as a relatively easy way to score those first wins that establish credibility and trust, and help to move the process forward.
Building an entry strategy for Europe: key steps to success
After identifying the challenges, we turned to entry strategies. There’s no perfect blueprint, but there are some things that every US company needs to think through long before they land in Europe.
Take the time to figure out the best entry point
This is often overlooked because it seems simple. But it’s so crucial to get this right, so it’s worth investing the time and research needed to make the right call. Don’t just go for what feels easy, like defaulting to the UK because they speak English. A common language is less important than something like ICP. Establish where your prospective customers and partners are, and where the market structure is right for you - then reverse engineer from there.
And that might not always mean the “big three”: the UK, France and Germany. I’ve seen companies land and expand in the Nordics first, because that was the right place for them.
You’ll need local champions
This also comes down to research. And your existing customers can be a great source of data, especially if you already have some European customers. Ask them who they work with now, and who they trust. Or ask them about other tech platforms they know and trust. The results may surprise you.
Build a regional strategy that will get people on your side
This comes down to understanding people in the region you’re targeting and finding appropriate ways to get them in the room. Be prepared to travel, physically, just to shake someone’s hand. As we said earlier, being present in the market, and leading in person - these things really matter in Europe. Give people those little signals that show you care. Over time, this pays off.
As Bernhard put it, navigating different regional and intra-regional hierarchies affects your timelines. The amount of support you’ll need to provide for onboarding and enablement will vary - but if you get it right, you will reap the rewards.
Key takeaways for Americans abroad
The key to succeeding with European partner ecosystems is being agile, and aware of important cultural and economic differences. If you’re planning to make this move, you might need to leave at least part of your US playbook at home.
Approach Europe with a long-term mindset, and be prepared to do the hard work of starting over, even if you have major US partnerships under your belt. That might mean going back to partnership “basics” that haven’t yet become business-as-usual outside of the US.
On the other hand, as Bernhard pointed out, don’t be afraid to bring forward new initiatives. US companies enter the European market with a certain degree of prestige, because of where they come from. They also typically have access to financing from their own domestic market. These are both powerful advantages that US companies can use when they arrive in smaller markets.
Lastly, don’t discount that good old-fashioned American pragmatism that just makes things happen - remember the “why not?” attitude we mentioned earlier. That, too, can be a real asset. And while nobody said it would be easy - building a lasting presence in Europe is most definitely worth it.
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