This document provides best practices for international expansion based on the author's experience founding and growing a business with offices in both London and San Francisco. It covers topics such as deciding where to locate international offices, setting up legal entities and banking in other countries, hiring foreign employees, maintaining company culture across distances, and tools for remote communication and management. The author advocates for over-communicating with remote teams and establishing processes to coordinate work.

1. Best Practices for
International Expansion
Andy McLoughlin
Co-founder, Huddle
@bandrew

2. Stuff we‟re going to cover
Part I Some background
Part II London, SF <> SF, London
Part III Going east
Part IV Stuff you need to know and do
Part V Questions

3. Part I
Some background (or who am I and why am I here)

4. About me
Co-founder and EVP
Strategy at Huddle
Frustrated designer and
economist
Based in London for 8
years
Living in San Francisco for
the last 18 months
Love start-
ups, technology, great
food, trying to fence, trying
to ski, outdoor alcohol
consumption

5. I founded a business called Huddle. We make
collaborative tools for the enterprise. We have 75
people across London and San Francisco. I‟ve
made virtually every mistake possible as we‟ve
grown.

6. Our timeline
November 2006 – Founded business in London, based out of
my bedroom
April 2007 – Huddle launched, move into first office
November 2007 – Raised $4M Series A. Hire like crazy.
December 2007 – First business trip to the US.
July 2008 – Move into new office. Approx 20 people.
March 2010 – Raise $10M Series B. Start thinking about US
expansion. Hire like crazy again.
May 2010 – Announce Series B. Have a big party. Dance a lot.
Realise I have to re-locate. Panic.

7. Part II
London, SF <> SF, London

8. After the music stops, the work
starts…
US incorporation
Decisions on location
Decisions on relocation
and acquire visas for
UK team
Find offices
Start hiring
All whilst keeping the
UK business rolling…

9. (re)location, location
Do Sand Hill Road
investors want the entire
company to re-locate to
the west coast? Is this
feasible?
If not, what‟ s the
minimum they‟re looking
for in terms of
management cover for a
remote team?
Case Study - Zendesk

10. Who should you send?

11. But, wait, why San Francisco?

12. A word (or two) on US visas
Company Submit
Submits Petition Visa Embassy Passport
Petition Approved Application Interview Returned
Application [day 45] Online [day 50] [day 55]
[day 0] [day 46]

13. Submit application Begin hassling Lose temper and
and begin „business attorneys cancel 1st
trip‟ to US [day 0] [day 45] application [day 50]
Application returned Learn colleague‟s
with Request for Re-apply, paying for
application
Extra Information speedy processing
approved. Have
[day 51]
[day 66] tantrum. [day 52]
3 month visa
Submit Extra Application
expires, leave US
Information [day 75] approved [day 102]
quickly [day 89]

14. Part III
Going East

15. No, not to Brooklyn

16. Europe!

17. Why look to Europe?
Talent (an alternative to $100k developers!)
Huge addressable population
Major cities home to key industries
Many growth economies in Eastern Europe
The fine foods, culture, architecture and impressionable
members of the opposite sex
But Europe is a big, fragmented place. Where to start?

18. Paris

19. Copenhagen, Helsinki,
Stockholm

20. Dublin

21. Berlin

22. Deep dive on London
Warning – this section contains stats and lots of text.

23. Why London? A confluence of
industries and nationalities
Fashion
Advertising Media
Legal
Finance
(OK, and I‟m a little
biased)

24. http://borg12345.deviantart.com/art/Language-Barriers-184440424?q=gallery%3Aborg12345%2F24658983&qo=1

25. Mandatory Infographic
The UK has Europe’s strongest inward investment track-record for EHQs. More overseas companies set up
their EHQs in the UK than any other country – the UK is home to over half of all EHQs.
Location of European Headquarters Projects, 1998-2008

26. Setting up shop
2 real options; subsidiary or branch.
Subsidiary is a separate legal entity from
the parent company, usually with limited
liability. Capital requirement can be
extremely low, and there are no
requirements for the board to include
directors who are UK-resident or UK
nationals.
Chris Grew
Branch (aka Establishment or Place of Partner, Emerging Companies
Business) is owned and controlled by the US Orrick London
parent company and has a presence in the
UK. It is legally the same entity as the
cgrew@orrick.com
„parent‟ company whereas all profits/losses
of the UK branch are incorporated with the www.orrick.com
overseas parent.
Use an international law firm to do the work. You
should be up and running in less than 2 weeks.

27. Employing in the UK
There is no employment at will, but UK labor law environment remains flexible,
protecting both the employer and employee.
Either party can terminate with 1 week‟s notice during initial 3 month
probationary period.
Thereafter 1 month‟s notice is required and 3 month‟s notice may be asked of
key hires.
UK employees accrue additional rights after 12 months of employment, after
which a simple procedure should be followed in order to terminate employees.
Compared to the European Union average of 40.4 hours, full-time employees in
the UK work an average of 42.2 hours per week. Source: Eurostat, 2010
The UK has a far less restricted system than our EU neighbours thanks to a
unique opt out from the EU Working Time Directive which enforces a maximum
35 hour working week in the rest of the EU. In the UK employees are allowed to
work longer hours, with no restrictions on working hours, overtime and less
public holidays. This means more productivity for your company. Source: Invest
in the UK, 2010

28. International hiring 101
Hiring in the UK is broadly the same as hiring anywhere else.
Don‟t hire people you might hate, make sure they can do the
job, use your network, avoid recruiters wherever possible etc.

29. (but if you do need a recruiter)
Dan Hyde of Erevena (based
in London) has helped us find
several key people (CTO, VP
Sales, Marketing Director)
over the last few years.
www.erevena.com

30. Working in the UK (i)
FACT
It‟s very naughty to come to the UK and work without a visa

31. Visiting the UK for business
US nationals can seek entry as a business visitor from an immigration officer at a UK port of
arrival.
A business visitor can:
 Go to meetings and trade fairs, buy goods and negotiate contracts with UK businesses
 Go to conferences and seminars as a delegate
 Find out about, check the details of, or examine goods
 Undertake training, as long as it is classroom-based instruction or limited to observation only
Business visitors cannot:
 Take paid or unpaid work
 Produce goods or provide services in the UK
 Sell goods and services to members of the public
To qualify as a business visitor, an applicant needs to satisfy that he/she:
 Intends to transact business directly linked to his or her employment abroad
 Normally lives and works abroad and has no intention of transferring the base to the
UK, even temporarily
 Receives a salary from abroad (but may get reasonable expenses to cover travel and
subsistence during the visit)

32. Working in the UK (ii)
If you intend to spend long periods of time working in the
UK you‟ll need a visa.
I have literally no idea how the UK visa system works but
if it‟s even half as painful as the US system then use a
specialist immigration attorney in the UK to assist you
with your application.

33. UK banking for your business
Great things about SVB Bad things about SVB
Set up the account from the
US
 Their banking interface
They‟re well connected to was created by Satan
the Tech City people himself
Shai Goldman is on the
ground in NY
Also consider HSBC (for
both business and personal
banking) as hundreds of

34. The Geography

35. Office Options
Co-working spaces such as Techhub, The
Trampery, White Bear Yard
Flexible office spaces with The Workspace Group, Regus
Ask people you know if they have spare desks – even big
companies start this way.

36. Other things to be aware of
Budget 1/3 of salary for additional taxes and national
insurance.
You don‟t need to worry about healthcare – this is
wrapped up in the national insurance cost. This is
generally the case in most of Europe.
By law, a pension scheme (i.e. 401k) must be offered
but the company doesn‟t need to pay into it.
Generally, people are less motivated by stock and
more motivated by salary. Why? London is an
expensive city to live in and there isn‟t the same heritage
of big technology successes are there is in the US.

37. London Meetups
There are hundredsof meetups every week in London for
people working in tech and media, or interested in
entrepreneurship.
The best are DrinkTank, Minibar, YC Hacker
Meetup, Silicon Drinkabout

38. Useful conversation topics
when talking with Londoners
“What about this weather we‟re having?”
“How was your commute in today?”
“What about this weather we‟re having?”
“Fancy a pint?”
“Looking forward to the Olympics? No, me
neither.”
“Yeah, I totally preferred Shoreditch before the
suits moved in.”

39. Part IV
Stuff you need to know and do as you grow

40. What / who to move abroad?
What‟s the purpose of
the new office? Sales?
Engineering? Customer
service? A mish-mash of
all of them probably
won‟t work well.
Do you have a senior
member of the team (a
founder, ideally) who
can form the nucleus of
the new office?

41. Dealing with the divide
Distance breeds mistrust; if you can‟t see what someone is doing
you‟re probably going to assume they‟re doing nothing!
Everyone hates process (documenting stuff, filling in forms, regular
meetings) but without some process everything will begin to fall
apart. Define a simple process for stuff and try to stick to it.
Reply to email from the other office as priority
Over-communicate, over-communicate, over-communicate!
Internal email newsletter
Always available by IM – try to cut down on email traffic
Policy for cascading information down
Make the distance as small as possible
Regular company all-hands video conference
New joiners introduced weekly by video
Internal Facebook group for gossip, sharing fun stuff
US team flown over to UK for induction and Christmas party

42. Finding a team structure that
works
As you grow, reporting lines become important (especially
so as you grow internationally)
Don‟t hire and just hope for the best - „water finds its own
level and staff will work out seniority‟ doesn‟t work.
It‟s likely staff will report into someone in another office
Appoint a GM in each remote office for day-to-day
management
Look at implementing OKR (objectives and key results) for
a lightweight way to keep people focussed

43. Changing your working day
I start in the office at 8am, although I first read email in
bed at 7am
The London team work later, and often take calls from
home at 9pm (after the kids have gone to bed)
8am – 11am is reserved for communicating with London
Put regular catch-ups with your team on calendar and
stick to them. Non-attendance punishable!
Skype is your friend – make sure everyone has it open
and a web cam installed

44. Maintaining company culture

45. Useful Online Tools
Rypple – staff management and reward
Yammer – micro blogging and communications platform
Shoeboxed – expense reporting
Tripit – travel management
Notable – product / design review
GoToMeeting – the most reliable tool for conferencing we‟ve found
Teamly – action and performance management
Pipedrive – lightweight CRM that doesn‟t suck
Spotify – create a shared playlist all offices can collaborate on and
listen to

46. Knowing what you now know
Ask yourself: do you actually need an
international presence? Could it all be done
from the US?
Doing it properly (i.e. incorporating a company, associated
legal fees, renting an office, hiring staff, visas for key US
people, relocation costs) is likely to cost at least $100,000.
Doing it cheaply (regular travel, sofa surfing, desk squatting)
could cost as little as $5,000 per year.

47. However, the distance doesn‟t
necessarily have to be a bad
thing….
My co-founder

48. Thank you!
(Part V – Questions)
Thanks to Mike Butcher (TechCrunch), Chris Grew (Orrick) and
Helen Moore (UKTI) for their input.