Most tech founders and executives that I know would have liked to keep the entire product team united under one roof. To be honest, I, more than once, had the same thought during my 10-year spell as CEO in the SaaS company Komfo, where our product team of 50 people was divided across Copenhagen and Sofia.
- Under one roof, it is easier to communicate and build the desired culture,
- you have fewer misunderstandings on urgencies and priorities
- and knowledge is more naturally shared between commercial and product people.
So why even consider a location abroad for your product team?
There are multiple reasons, why having a foreign location is a good idea when you are scaling a Nordic tech company.
1. Access to larger talent pool when hiring
Software talent is a scarce resource in the Nordics. When you stop receiving qualified applications on your job ads, it is a natural time to think about having another location. Having a tech office in a market with a larger talent pool of software developers is the most common reason for setting up a new location.
2. Save time and stay focused on product development
When you finally, get the required funding or budget for hiring the people you need to deliver on your road map, then you basically want them as fast as possible. Having a foreign location often means working with a professional local partner handling hiring. This allows you to keep focused on product development instead of time-consuming hiring processes.
3. Preparing for scale culturally and financially
When thinking long-term most Nordic tech founders will agree that it is not likely to keep product development under one roof. The sooner you get to experience what it means to have a product team across two locations, the faster your culture and work methodologies will adapt. Moreover, it will be very expensive to hire everyone in the Nordic market (assuming you can find the talent). It will most likely not be cheaper in the first phase when setting up the foreign location, but at scale, there will be significant financial upside.
Things to consider before on-boarding a foreign software team
4. Assess your own team
You need to have an overview of your own team’s capabilities when it comes to product development and you need a plan for which competencies to have in which location. Which part of the product development do you want to keep closest to you down the road? You should consider your team’s current strengths in product leadership, UX, UI, design, system architecture, software development (coding), data science, quality assurance and DevOps.
5. Have a plan to deliver on UX and design
Scaling your software team means increasing demand for specified, designed and tested product user stories. In the Nordics, we have a great UX and design tradition and in most cases, it makes sense to design the user experience in the Nordic HQ in collaboration with the customers and relevant partners close to the market. In other words, you need to make sure you have the right people and partners in place to keep up with the increasing software delivery capacity, as the foreign team gets up to speed.
6. Be comfortable with agile methodologies
In order to be agile and react fast on market demand, you need to be comfortable with agile development methodologies. This is the case in most tech companies, but especially when having a foreign location it is important to have a constant dialogue across borders about what’s being developed and why.
7. Allow the entire team to work on the core
A common way to think about a foreign location is to design the road map so the foreign team will work on isolated and less important parts of your product, allowing your local team to focus on the core. This might be good practice for some enterprises, and for scaleups, it is often a good way to get new colleagues up to speed in a safer way – both at home and abroad. However to get the full potential of your new foreign colleagues the natural ambition should be to get them to contribute to the most valuable part of the road map as fast as possible – including the core of your product. The Product team needs to work as one united team.
8. Choose an EU location for your team abroad
You need to be in an on-going dialogue in your team so for practical reasons choose a location as close to your own time zone as possible. Nordic scaleups often choose Eastern Europe, where there is a great tradition for software development and a large talent pool at lower salary rates than in the Nordics. With all the attention on privacy and data protection, good advice is to choose an EU destination to making sure partners and developers are familiar with the GDPR.
If you consider a foreign location for software development, or if you are struggling with getting your current setup across multiple locations to work, then I hope you will be able to use these 8 tips.
You are welcome to connect at https://www.linkedin.com/in/rasmusmn/ if you would like to discuss some of the topics above.