“The culture is going to be the hardest thing to replicate. It’s been one of my big learning curves as the team has grown. If you don’t pay attention to it, you can easily get the wrong culture and the wrong behaviours."

Glofox's expansion into the US with Conor O'Loughlin

“The culture is going to be the hardest thing to replicate. It’s been one of my big learning curves as the team has grown. If you don’t pay attention to it, you can easily get the wrong culture and the wrong behaviours."

Glofox is a SaaS business management software tool for group exercise and training: recognising that many fitness professionals are small or even one-person businesses, Glofox’s mission is “Helping fitness entrepreneurs win”. Its clients are therefore mainly fitness studios and gyms, but also include dance, pilates and yoga studios. Clients get an elegant management dashboard plus a white-label mobile app for their members, through which they can book and pay for services. Glofox takes a monthly subscription from clients plus a small percentage of all services sold. That accounts for 20% of revenues today but is growing rapidly.

The system includes full class booking/availability management and flexible membership and entitlement structures. This increases service usage and therefore retention, keeps the gym brand front of mind and improves raw revenues by making participation frictionless. Particularly for smaller and oneperson operators migrating from spreadsheets, Glofox can represent an admin saving of over two hours per day.

CEO Conor O’Laughlin was a professional rugby player in his ‘previous life’, and had been thoroughly exposed to the fitness and training sector. He realised that it was fragmented, especially in his country, Ireland. Glofox began as a consultancy, offering web and app development services to these businesses; but as it became apparent that they all faced the same challenges, it soon made sense to build a coherent cloud solution. It took a year to build the platform (including testing with an eager cohort of early adopters), and in May 2015 the legacy consultancy business was wound down.

Since then, Glofox has grown at 12%+ month-on-month to almost 600 clients in 20 countries – and 50% of those are from the US. It also became clear that Glofox was successfully gaining market share in the US from an incumbent competitor (a much more mature, quoted company with a more generic product).

Being an SME product selling in the $100-per-month bracket rather than a $50K-per month enterprise play, Conor has attracted plenty of interest from US clients prepared to give his product a try – which has allowed him to gain traction before making any big decisions. Today, he is on the brink of moving to the US full time to grow Glofox to its full potential.

It sounds like the SME space is ideal: big enough revenues to develop the product, small enough to be low-risk for new customers. But it makes the growing pains acute, too. Says Conor, “Yes it’s a light-touch sales process in that most customers find us online. But in our industry, and at our pricepoint, most will go through a personalised demo with an account executive. It was in the last quarter of 2016 that we saw that the vast majority of our inbound opportunities were coming from US clients. We had to re-engineer the Dublin office to sell, on-board and service US time zones. We had to sort out split shifts. And the more we got the servicing right, the faster we grew.”

The effort has been worth it – the US market is attractive beyond its size and scale. “US clients are higher converting”, says Conor. “They are also cost in terms of activation channels, more likely to self-serve, more likely to place value on the basic instruments of our product, more trusting of the mobile experience - and ultimately more successful businesses in their own right as well. The more we started to serve those US clients, the more we started to see that these were our ideal clients for product development. They were ahead of the curve. They gave us more concise feedback - feedback we agreed with in terms of where the industry was going. And that’s given us a virtuous circle: as we have started to develop the product more in line with the expectations of the US client, we have seen more growth in the European customer base, too.”

Today, the Glofox team is 31-strong in Dublin (product, marketing, European sales and support) and Conor has just opened an office in New York. Glofox’s top salesperson is moving permanently, and will build out local sales, technical support and customer success functions. Help has come from the Bank of Ireland, which as a national bank “is really good at supporting Irish start-ups. As one of seven fast-growing Irish start-ups, they’ve given us office space in Manhattan for a year, which is a great landing pad. It’s not just an office in Midtown, it means we can step off a plane and have a ready network. By the time we’re at capacity, we should know where to set up next and be able to take advantage of any government opportunities that are available to us. We’ve always been careful to do everything as capital efficiently as possible and avoid costly mistakes or commitments that would be hard for us to reverse. The Bank of Ireland is really helping us to build our team without burning through the runway.

Keeping the culture

“The culture is going to be the hardest thing to replicate”, Conor continues. “It’s been one of my big learning curves as the team has grown. If you don’t pay attention to it, you can easily get the wrong culture and the wrong behaviours.

“We have a great working environment today and it means we’ll be able to make some really great hires on the back of it. We’re trying to emulate that in the US, and the more people I can have involved that are used to the culture back home, the easier it’ll be for those teams to operate in tandem.

“That’s the other challenge I think: I’m very conscious that we don’t create two separate businesses. We’re operating in different time zones, but we should be in the lucky position where we can lean on the infrastructure back home and the US is an extension of our core business. Yes, we want to localise our product, but I think we can still maintain that Irish-ness. I still think there’s a place for a little bit of a shamrock!” If anything, the need for localisation will not be linguistic, but technical. “Our planned organisation wouldn’t have scratched the surface of the expectations that a US client has” says Conor. “For example, they require the ability to put different tax rates into products. Or, in the UK, we use more direct debits; in the US they use ACH. They’re also very sensitive to credit card processing fees. So in terms of our roadmap, there were a lot of little subtleties.”

But then, there’s payback: “In general, the US customer is more likely to give you time remotely. They’re more likely to do business with a company of our size; you don’t have to be a behemoth for them to give you a shot. They have higher expectations of service and functionality, but they will flag it quicker if they are not having a fantastic experience, in terms of quality control. In the US, we feel like we are really getting to know our customers.

Writing in Summer 2017, Conor is taking his first steps into the US market, before moving continents fully. His key strategy for the rest of 2017 is to tap into the network of social ambassadors in the sector, recruit a top-table team for the US, and leverage existing happy clients for a reputation that will “dominate the category of group fitness”.

Key takeaways

  • Get traction in the US with demonstrable product-market fit before committing to a move.
  • US customers are often advanced: use their feedback to build a better product, faster
  • Get a low-cost, low commitment launchpad. Shared workspaces are great: you’ll meet similar entrepreneurs.
  • Don’t lose your home culture; instead, suffuse your new US operation with the attitude that got you this far

This story was taken from Notion’s Crossing the Atlantic Report

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