How a German SaaS Moved 70% of Its Revenue to the US | Tomas Fandrich, quantilope

0:11Hi, everyone.

0:12Dr. Thomas Fandrich:Welcome to the Scaling Stateside podcast. I'm David Rose, the CEO at U.S. Expansion Partners, along with my co-host and co-founder, Matt Oxley. We're on a mission to help founders from the UK and Europe better understand the U.S. expansion process, the pitfalls and best practices to hopefully prepare them to be successful in their own journey in the U.S. As part of that process, we're having conversations with founders who've already made the journey and venture capital firms who are founding or funding U.S. expansion for the portfolio companies. And today we're very excited to have a great guest with us.

0:46Dr. Thomas Fandrich:We have Dr. Thomas Vandrich, who's going to be joining us from a very unique location. He is the founder of Quantilope and has led the company's U.S. expansion efforts. So Thomas, please introduce yourself and tell us where in the world you are today.

1:00Tomas Fandrich:David, Matt, thank you for having me. That's a great format. I'm very excited to share a few stories today, help others to do their expansion journey as well in a successful way. I'm Tom, the co-founder of Quantilope. And today I'm serving as a board member and strategic advisor for the company. I fulfilled various roles over there at Quantilope from CEO to chief customer officer. And of course, most importantly, leading our US extension since 2018. Maybe a few words about Quantilope and what the company does. It is a consumer intelligence platform, a B2B SaaS, that radically changes the way how companies make marketing decisions based on consumer insights.

1:46Tomas Fandrich:And the marketing decisions like, what is the right price for my product? What innovation should we bring to the market? How should we design our campaigns? Or how do we reposition our brand? There are so many different marketing decisions that need data to decide the right things. And today, this insight market is mainly dominated by big service-heavy agencies. And those agencies are slow and costly in their processes and fail to deliver actionable consumer insights in the moment companies need them. And that, at the end, slows down decision-making and leads to competitive disadvantages for companies in their fast-paced environment.

2:29Tomas Fandrich:Or it leads to another situation where managers just skip the steps and decide based on gut feel because they can't wait until they get their consumer insights from the agencies. And this is even more dangerous because, as we know, 95%, for example, of the product innovations fail. And that is a lot of wasted money. So the dilemma is that either you decide right, but you are slow, or you decide fast, but you have a high risk for failure. And this is the reason why Quantilope exists, to solve this conundrum of speed versus substance in marketing decision making. Now, how do we do it? We do it with the help of an agentic AI that automizes and integrates the entire end-to-end consumer research process.

3:22Tomas Fandrich:on a single platform that delivers fast and scientifically grounded actionable insights. And that, at the end, enables every company and every decision maker to take the right marketing decisions based on data at the time where the decision is needed and the data is needed, and therefore minimize the risk for failure and increase the performance of the company. Right.

3:46Dr. Thomas Fandrich:Super, super valuable. You're in a unique location, and we typically ask guests where they're joining us from. Tell us where you are today, Tom, because this is going to be a first.

3:56Tomas Fandrich:Yeah, I'm in my mobile office today right next to the Cotopaxi volcano in Ecuador. One of my mantras in life has always been to step out of my comfort zone, regularly, and never stop exploring. And digital nomading has always been something that fascinated me. That is why my wife and I decided in 25 that we're going to try it ourselves and live and work on the Pan-American Highway from Alaska to Argentina for one or two years. We have everything behind in Germany, set up a fully equipped Sprinter van with Starlink, solar power, and big batteries. And that serves as our home and mobile office until the end of 26.

4:40Dr. Thomas Fandrich:Definitely the first time we've had a guest in Ecuador, for sure. So, Tom, let's go back all the way to the beginning. We always like to talk about with our guests, what was your very first paying job as a young man? What was your very first paying job?

4:56Tomas Fandrich:Yeah, I was about 16, 17 years old. It was in the late 90s. And I started to sell semi-professional Casio keyboards at Toys R Us while being in high school. And that was a fun challenge for me because I love the technology of those keyboards. And I love to excite others about making music with those kind of crazy things. But on the other hand, selling and making people buy those$500,$700,$800 instruments was quite a struggle from me at the beginning.

5:26Dr. Thomas Fandrich:Nice. Great, great starting point. Well, let's kind of fast forward. Obviously, you have some really impressive academic credentials. and you have a unique kind of starting point for Quantalope where you and some other PhDs in your field decided to start the company. Can you kind of walk us through the decision point of like, obviously you're in an academic environment and you decided to actually launch a company for real. Talk us through that.

5:54Tomas Fandrich:Sure, happy to share that story. As I mentioned earlier, exploring and discovering new things is really a strong passion of mine. And that brought me to academic research, to marketing science, with the goal to explain based on data why consumers behave in certain ways and second, predict how they will behave in the future. And of course, those insights and prediction models are very interesting for consumer-facing companies. And that is why we advised a few of them in parallel to our doctoral PhD programs. And when I say we, I mean Lucas, my co-founder and I. And we noticed during those early consulting projects that gathering consumer insights and deriving professional marketing decisions from them is something every company needs for better decision-making, but it's something where you need a lot of expert knowledge and it's a very lengthy and cumbersome process.

6:54Tomas Fandrich:So we loved what we did, But we didn't love how we did it because it was too slow, too complex, too expensive. And now we started looking into the different steps that we as consumer researchers took during our work and identified one area after another that we could teach and hand over to machines, making our scientific consumer insights and research faster, easier, and therefore more affordable for everyone.

7:23Dr. Thomas Fandrich:When you were, because obviously you're really deep in the research, so you started the company. Was there anything in the data or the research that led you to think, gosh, we really need to be in the U.S. market? Was there data to do that or is this like an obvious TAM to go after or a gut feeling? What led you to enter the U.S. market initially? You mean even before we founded it or later in the company? No, so as you started the company and you kind of get up and running and you're obviously going to be rolling in your home market, Was there data or signals in the research you said, oh, wait a minute, this data says we should be in the U.S.

7:57Dr. Thomas Fandrich:Or was it more, there's a giant TAM there or more of a gut feeling of why the company and why specifically you should lead the company into the U.S.?

8:06Tomas Fandrich:Yeah, so we pushed ourselves into the U.S. market at the end. In 2018, after we were running the companies for four or five years, we noticed that we achieved good product market fit in Germany and our home market. and we noticed that through kind of bigger enterprise brands, knocking on our doors, getting bigger deals, six-figure deals in, having loyal customer segments. So it felt that the product was ready for it and we were looking for kind of the next big growth opportunity while we were preparing our Series A and at the end race it with Thorn Capital from London. And part of our growth journey should be the U.S.

8:49Tomas Fandrich:expansion is what we decided. And we looked into different markets and identified the U.S. as being a very attractive big term.

8:57Dr. Thomas Fandrich:And you didn't just kind of like green light U.S. expansion. You personally moved to New York and went to kind of lead the U.S. expansion. So why you, Thomas, and talk us through that experience?

9:15Tomas Fandrich:Yeah, so in summer 2018, I started to look deeper into the U.S. market. And I flew over and joined a few industry trade shows because I wanted to see what is the market talking about there? Do they have the same challenges? And what I noticed is that really our product is strong and ready, but our go-to market would need to become bolder.

9:41Dr. Thomas Fandrich:So you didn't just kind of green light the US. You actually led this. You moved to New York personally and ran that expansion. So I guess my question is, why did you put yourself forward? And talk us through that process. Because obviously you had product market fit. You needed to kind of get the go-to-market machine going. Talk us through what you did. What were those first steps? What were those first six months like?

10:05Tomas Fandrich:Yeah, so after kind of quickly scanning the market in the US through trade shows where I learned more about the competitors, how they talk about the market, what their products look like. I noticed that our product is strong. It is on eye level with the U.S. market. But our go-to market would need to become way bolder, louder, more self-confident. We won't get very far in the U.S. with our German understatement. So what we did then in Q4 2018 is put together a small task force around me in Hamburg before going to the US. It was a team of four, one SDR, one AE, and one customer success manager, all high performers and all passionate like me about international expansion.

10:52Tomas Fandrich:We rented a small satellite office in Hamburg, two blocks away from the headquarter, and shifted our working hours from German time to Eastern time to maximize the overlap with the US model. And then we started from Germany with email campaigns, cold calling, asking marketing and insight managers for advice and feedback on our product and what we are planning to do in the US. And the goal was to show that we are able to build a funnel of about 30 opportunities in one quarter. And I even remember that almost at the end of this quarter in 2018, on Wednesday, we learned about a new DIY Insights trade show in New York.

11:34Tomas Fandrich:And that was actually a perfect fit for us and where our company wants to sell and be positioned. So the next day on that Thursday, we signed up for that conference, bought a speaker slot for me, ordered two roll-up banners and 201 pages. And three days later, we landed in New York and attended the conference at Bryant Park. and there we met great brands like Campbell Soup, like Clorox and many others that we were able to establish first trust. So at the end of Q4 2018, our funnel was filled with even more than 30 opportunities which gave us the confidence to make that investment and move over to New York in Q1 2019.

12:22Tomas Fandrich:So the four of us moved over to Manhattan in one shot AMBMB and started working.

12:30Dr. Thomas Fandrich:What an incredible story. I've never heard US expansion done like that, where you take a gritty team, hot team, stick them two blocks away. I love that because then you're not kind of distracted by the kind of German operations and give them a target. Go and get 30 and I love that. Where did that target come from? Was that the board? Was that you guys as founders just going, look, we need to demonstrate that we actually have a go-to-market motion and people are picking up the phone. That is our target. Where did that come from?

13:06Tomas Fandrich:Yeah, this came from the board. And at that point, our new investors on capital, we said a US expansion can be very risky and be a lot of waste of time and money. Let's make a milestone plan for ourselves where we evaluate after each quarter where we stand and if we had success or not and if we move forward or not. That's amazing.

13:30Dr. Thomas Fandrich:And then, so you moved the four people to America in a shared Airbnb. I imagine that was a lot of fun. What was the first thing about doing business in the US as a German team that surprised you?

13:46Tomas Fandrich:Yeah, so there are many things that we learned and that surprised us and positive and also negative ways. The first thing I noticed is that in Germany, product engineering and quality and all those things is a science. While in the US, everything around sales and marketing communication is a science. It is really different and well-engineered and well-thought-out. And if you're able to combine those two forces, the product engineering and quality from the Germany market with the sales and marketing communication skills from the US market, you will be unstoppable.

14:29Dr. Thomas Fandrich:And then you're obviously going into marketing, MarTech. I mean, I built a company in MarTech. It went from 500 to 50 ,000. I mean, there was just a massive way of MarTech coming through. And then as a German native and German origin and culture, How did you guys adapt? Did you kind of have to, you know, I talk about learning American, even for English, that is what you have to do. Were there things that you had to adapt in your kind of sales techniques, in your kind of BDR pattern, the marketing, the outreach? What were the things that you had to adjust?

15:12Tomas Fandrich:Yeah, so the business culture is definitely different than in Germany. For example, what we noticed is that in the U.S. there's way more openness to try out new things and give innovations a shot. That helped us at the beginning, being new in the market. We also noticed that the decisions are made faster. There's more willingness to fail fast also by people that buy you and pilot you. relationship building with those people that you want to sell to and build customer relationship with is more important in the US it is expected and necessary you really need to dig in and learn more where those people stand what is the next step in their career a few things about their families the dog all these things that is way more important than in Germany where it is much more about the product etc.

16:10storytelling is very important in the US when you pitch to coach people.

16:15Dr. Thomas Fandrich:How did you find their reaction to innovation from foreign companies? Were they receptive to that?

16:22Tomas Fandrich:Oh yeah, they were very receptive to that because we had something to offer that was new for them and that was promising and solving their problems of insights are too slow, are not actionable enough. and they needed something also to boost their careers because they are in charge of delivering those decisions in their company and our platform was able to help them. So they were very open.

16:52Dr. Thomas Fandrich:And then you mentioned you made New York the home. What was the thinking behind why New York was the right base?

17:01Tomas Fandrich:Yeah, same here. we did scorecards of different potential basis for our company and we had different criteria. Of course, the access to talent was something. The overlap with the time zone in the home market was another thing. Closeness to clients, a good airport that has good connections. And of course, also for yourself as a founder and your family, it needs to be a place that you like and excited about because you will spend a lot of time there. That is why in New York hit a lot of boxes.

17:39Dr. Thomas Fandrich:You briefly mentioned the personal side of it. And I think one of the things I like to elevate in these conversations is you go over there. My girlfriend, who's now my wife, couldn't work. I didn't know that at the time. I got the visa, found out in the incorrect way. so there's a lot of I think baggage, personal baggage and sacrifices that are made because founders are going on this journey they want to get on the rocket ship they've got pressure from the board go and dominate this new market I think those personal elements that founders go through are often not talked about so what was the kind of hardships personally that you maybe kind of encountered along the way?

18:26Tomas Fandrich:Yeah, yeah A lot of the things that you just mentioned, Matt, is something I noticed as well. It's an absolute roller coaster with extreme highs and painful lows. It already started in Hamburg where we shifted our working hours to the US time zone, which meant that when my wife went to bed, I started work and vice versa. And then after moving over to the US with my three colleagues, the first eight months. I lived there just by myself, without my wife, since it took more time to organize the visa for her. And I think everyone needs to be prepared for that, that you also will be separated from your partners and families for a while.

19:12Tomas Fandrich:And then when she joined me, finally, she also was not allowed to work in the US. And so when I came home at 8pm, of course, she wanted to talk and was interested what happened today and tell me everything right and I was just tired wanted to rest and prepare for tomorrow so it is definitely a challenge for you and your family to go yes but there's also a lot of reward because just kind of browsing through the city the new environment is like a movie scene every morning every weekend and that gives you a lot of inspiration and energy as well so we enjoyed that time also.

19:51Dr. Thomas Fandrich:That's awesome. And thank you so much for being open about that. Because I think this is one of the, I think, things that are underrepresented in the US expansion story is the impact on family, friends, and the environment that you've got used to over, you know, X amount of years. But also, and I think you highlight this really well, the sacrifices that are needed to grow and continue to grow a successful business. That's not often highlighted. Thank you so much for kind of leaning in there. Tom, let's kind of shift to venture capital fundraising. So I know Quantilope has done several rounds of funding.