Eero from Relancer (00:00)
Welcome to the Relancer podcast where we talk about talent acquisition topics. I'm Eero, the co-founder of Relancer, the platform where employers connect with freelance recruiters. Today we have Rob and we're talking about what does it take to enter the US market. Welcome, Rob.

Rob (00:17)
Thank you, thank you for having me. Appreciate it.

Eero from Relancer (00:19)
So you're originally from California, how did you end up in Finland?

Rob (00:24)
This is actually one of these weird Estonian crossovers here. So I had a friend and she was back in the San Francisco Bay area where I'm originally from. And she was saying, you know, there's this random company that they're posting all these international jobs. This is international job board. And so these companies, they'll sponsor you, they'll bring you over. And so if you're curious to like check out a different location or travel a bit, you should check out this website. And so I checked it out.

The company was called Jobbatical know, on that you're probably familiar with and a lot of Estonian folks are as well. But I found a Yousician which was the company that I worked for for a number of years. They were, they're still active, obviously, it's an EdTech music company. And so I applied for them. And then also my  now wife, she she applied for a number of different jobs as well through Jobbatical. And she got some interviews in Germany and then also in Australia.

But my process went all the way through. So I accepted the offer without ever coming to Finland. I showed up in a couple of months back in 2017 and I started working with Yousician and I've been in Finland ever since. So that explains my bad tan. I've been here for far too long. So, yep.

Eero from Relancer (01:38)
That's super cool.

Yeah, that's super cool. Like I actually did something before Relancer we did something like Jobbatical. So we were also like relocating people looking for talent from different countries, mainly for Estonian startups. Of course Jobbatical was bigger and now they basically cover that paperwork and then everything else with the relocation. So there's no board anymore, but it's cool to see that...

Rob (02:02)
Yeah. 

Yeah.

Eero from Relancer (02:11)
it actually worked and then some people landed basically on the other side of the world. That's cool

Rob (02:19)
Yeah, it's a bit bittersweet because it's like, I obviously, I liked the service before because it benefited me, but also like, I think the hole that they're, they're filling makes probably more sense. I just, I selfishly hope that maybe they create a spinoff or they, or, or maybe another company goes and does what they were doing. Cause it was, it was pretty cool. I mean, it's really hard, the biggest issue with, with relocating internationally is like, you don't know if they actually

will sponsor you and if they'll go through that entire process of like actually bringing you over. And so by actually having like a list of companies that check the box, it's like, yes, I will actually relocate you. And we're looking for people internationally. It cuts out a lot of the guesswork on it.

Eero from Relancer (03:02)
Yeah, there are still some platforms, like in the Netherlands there is this Honeypot and then, I don't remember what the name was, there's something like Relocate Me or something like that. So there is something still going on, like I think like on some kind of scale. What can you tell us about your experience hiring in the US, like so you're from there you have probably hired for European companies.

Rob (03:08)
Mmm.

Yeah.

Yeah, yeah, so a bit about my background. So I started doing recruitment in 2012, which I think for a lot of the world, that's maybe not like super early, but the market obviously changed a lot. And it's constantly changing over, over 10 to 12 years. So like I started doing recruiting in 2012. In the Bay Area, it was actually super unrelated to what I'm doing now. It was like healthcare IT recruitment for a staffing agency.

And then I eventually, I slowly started moving into working with tech companies with the first kind of product growth company being Instacart, which they've now gone public and there's been a lot of information about them in the news recently. So maybe you've heard of them. We're probably going to discuss unicorns at some point. They're one of the billions of unicorns. Everyone seems to be a unicorn these days. But yeah, I started working with them. And then I actually worked for a company called Connery Consulting.

It was founded by Nancy Connery, who was the original CHRO for Salesforce. So she had a super deep network. And so she kind of created this agency where they would help scale ups. So I primarily focused on, like my sweet spot was really early stage at times, like kind of garage startups where we're talking like, you know, 10 to 20 people max. And then, occasionally there would be companies in the hundreds.

I did that for a while and then I moved to Finland and did the Yousician stuff for a number of years, helped double their team. And then I created R&R Talent Advisors alongside my co-founder Magnus. And that was in 2020 during the pandemic. Since then we work internationally, but a lot of the clients are in Europe. There is still a mix in the US. So long story short, I've been working with the US market for over a decade.

And then with the European market, I started working with them in 2017. So that's kind of crazy as well that it's been that long. I guess that just means I'm getting old basically. But yeah, I've been working with the European market since 2017. But it's a mix of both for sure. So even today, I actively have a number of the US clients that I'll be working with and a number of European clients that I'll be working with. with. with.

Eero from Relancer (05:37)
So...

So how often do companies come to you with the plan to expand to the US?

Rob (05:57)
Yeah. I mean, we get that question a lot, because, I think primarily just cause of my background and then Magnus's background, we kind of bridge that gap being that I've worked in the US for quite a while. So when companies do want to expand or if they're hiring distributed, which has also become a big thing after, especially after COVID where they're hiring people in North America and Europe and even Asia, we tend to be an agency that works with these types of companies just because

we're used to working with both markets. So it's a fairly regular thing. I would say it's maybe 30-70, 30 % is distributed where they can hire kind of anywhere. And then 70% is where they're like, intentionally, they're setting up an office out in the US. And then they're asking us to kind of help make a first hire or potentially help to build out that office.

Eero from Relancer (06:46)
Yeah, actually, I think in 2019, I think I went to San Francisco. So there were some investors here who really promoted going to the US. And I was like, there is this thing in startups that what they say like is that entering any new market is hard.

Rob (06:52)
Okay.

Eero from Relancer (07:11)
It's hard if it's small or big market, so you always should go to a bigger market. And that's why the US definitely is like a sweet spot. Dreamland, everybody wants to go. I dig up some numbers also for comparison. So basically the US economy, GDP of the United States is 27 trillion. To understand, the scope is the whole European

Union expected to be about 19 trillion. So it's smaller, the whole EU economy is smaller than the US. Like, of course, it's the biggest in the world. And then also compared to, for example, Germany has like 4.5 trillion, so the US is more than five times bigger than the biggest market in Europe. So it's definitely a place where

companies want to expand, there are some benefits, like because it's English speaking. So if you expand in Europe, for example, you always have to localize. Like, of course, probably you have to localize in the US also, but you have one language, in Europe you have different and then European Union is maybe expansion wise, like legally easier probably, because if you take all the European countries, they have similar legal work.

Of course there's some specifics on every market but maybe you can comment also on this. What I've heard is in the US you have, is it 50 states now? So 50 states and the legislation can be quite different in every state so I have heard that that is a

Rob (08:35)
Keep it easy. It's 50. 50. Yeah.

Eero from Relancer (08:45)
quite complicated in the US.

Rob (08:47)
Yeah, I mean, different states have different laws, obviously. And then there's also like the federal side as well. So, and then the federal overrides the state. So, yeah, I mean, I think the two kind of trickiest markets are also the two probably most desirable markets, which is New York and the US. They both have kind of some unique things that they do with their labor code and the stuff that they require. I think keeping it really simple.

The US has made things so complex that you pretty much need to have a lawyer if you want to go to the US, most likely there are different solutions that try and make it a little bit easier from just an administrative burden, but yeah, I mean, opening up an entity in the US is, is wrought with challenges. So I would encourage people to at least

use some sort of legal support when they're at least getting stuff set up.

Eero from Relancer (09:45)
Yeah, in the end, if you're not doing things on a smaller scale, whatever country you go, you should get some kind of legal support probably.

Rob (09:53)
Yeah. Well, yeah, yeah. And that's kind of it, right? So it's like, I think there's the concept of the American dream and it goes both ways, right? Like, I mean, it's Americans that are presently there trying to "live the American dream". But then I think a lot of VCs, whether it's Europe or whether it's Asia or wherever it may be, South America, I think a lot of people look at the

American dream and they're like, hey, this is the market that we need to we need to go to. We've had on multiple occasions when we've had clients when I've asked like, why are you expanding to the US? Oh, our board says that we have to. So I mean, there's there's definitely like, if you want to scale, this is the market to do it.

Eero from Relancer (10:38)
Yeah, yeah.

are the main misconceptions companies have about entering the US market? Like, it's the American Dream, everybody wants to go there...

Rob (10:49)
Yeah, I think probably the biggest misconception is like, everything's just going to be easier because there's more of everything. But I think it's sort of like a one-sided, they're looking at it from a one-sided equation where it's like, there's a larger customer base. There's a larger talent base. There's more investors. There's more of this, there's more of that, but there's also more competition for all of those.

It's a more crowded marketplace as well. It's just like dramatically larger. So I think people don't really take that into account. I think the other thing too is it's like, it's such a large country. A lot of the time people are like, yeah, I'm just going to set up an office in New York. And it's like, great. No one knows who the hell you are.

So, so good luck with that. That's going to be a challenge. And it's like, we try and advise them, hey, you know, New York's really expensive. It's one of the most expensive places on earth. Like, are you sure you don't want to potentially consider remote options where maybe people come to the office once a month, or maybe it's a more distributed option. They're like, no, no. Like we really believe people have to be in the office. And we have had multiple occasions where,

we've hired some people for folks, they've been there for three to six months, and then they realized that these people cost an insane amount of money to hire people in New York, to have a WeWork in New York, to have any office space in New York, and they're pretty much shuttering the office in three to six months, or they're keeping just a handful of people out there, and then they're laying people off.

I think there's a misconception that it's going to be, I don't want to say that people think it's going to be easy, but that they think that it's going to be maybe smoother than it actually is. It's a pretty risky endeavor. It's very like feast or famine kind of concept. But the other thing too is on the candidate side, I think when you do get companies that come over the US and they're used to paying, let's say they're used to paying

Eero from Relancer (12:32)
Yeah.

Yeah.

Rob (12:56)
for an engineer in Europe somewhere around €70 to €80 ,000 euros. And then they're hiring an engineer for you know, $300 ,000 or $250 ,000. Or you can apply it to any kind of C-suite type of position as well, where it's like, hey, in Europe, you know, we're paying for a CMO, series A, series B company might

Eero from Relancer (12:57)
Yeah.

Rob (13:16)
might hire somebody for like around €100 to €150 ,000 euros plus stock plus some other stuff. And then you go to the US and then again, these people are like 350 to $400 ,000. They have a huge bullseye on their back, right? Like these people have to be absolutely like walking on water in order to actually keep these people. It just puts so much pressure on everything to go right.

Eero from Relancer (13:20)
Yeah.

Rob (13:40)
And that's a hard thing. It takes companies years and years to try and get the US right. And some would probably say it's kind of like the lesser of two evils and maybe they never get it, but they feel like they have to have kind of that office operating in the US. it's just it's not a very straightforward situation.

Eero from Relancer (13:55)
You mentioned competition. When I went to San Francisco, what I learned was... So basically, I was going to meetups, one of the ways to meet people... I had some people I knew who were in the Bay Area also, trying to get invitations.

In a way, my situation was tricky because I had an idea. I didn't have a product yet. I didn't have anything. But what I learned quite quickly in the meetups was it was full of people like me who wanted to get in somehow, who wanted to meet. They would be from somewhere, from Europe or whatever country. And then they would come here and they would try. So there were actually no locals in the meetups. It was full of people who wanted to somehow get

Rob (14:27)
Yeah.

Eero from Relancer (14:43)
into the community. Also I learned, at least in the beginning, like if you're nobody, nobody knows you, it's quite hard to get also introductions because there is this reputational line that people don't want to risk unless they really, really trust you or know that what you're doing is good. Because I had nothing back then, so it was in a way even hard to get intro from

people I knew because they don't want to put their reputation on the line. That's definitely the similar experience when you come and you're nobody and then nobody knows you in the US.

Rob (15:17)
Yeah. Yeah. Yeah. I mean, it's interesting how you frame that because like, there's definitely a positive in that too, right? I mean, that's electric to be in a place where there's so many people that are kind of aligned with you trying to create products, trying to, trying to build something, like the amount of people that do that, you know, in the US especially if you go to like San Francisco,

well, New York as well, but especially go to San Francisco, Austin, New York, et cetera, wherever these markets are popping up. It's a really cool thing. I've definitely worked with founders before where they're like, they're originally from New York and they're living and working out of a different place. And when I asked them like what they missed, they're like, oh, I miss the energy that you get from working in New York city. Or like, if you talk to people that

have tried to raise money in San Francisco, like, oh, I miss that ecosystem. Like that you have Y Combinator and you have all this other stuff going on. And the concentration of obviously not just money, but like of sort of institutional knowledge that you can get from people. It's just like a hundred X of pretty much most of the world. It's a very cool thing. I don't ever want to sit here and be like,

Eero from Relancer (16:09)
Yeah.

Rob (16:29)
grumpy old man it's like, yeah, I've seen a lot of companies go to the US and they've struggled, it's like there's reasons they do it and the company should do it, it's just they should be aware of the challenges that it comes with.

Eero from Relancer (16:39)
Yeah, but it's also a cool experience. You can see all the, oh, everybody's basically there. You see Google, you see Apple, you see whatever you can name. Like the biggest company, Salesforce, everything is there. So yeah, the concentration definitely, if you take San Francisco, I think like 800 thousand people or something, which is small, but most of them are tech people. So the concentration is super high.

Rob (16:44)
Yeah.

For sure.

Yeah.

Yeah, that's the other kind of, that's the running joke too. If you're in that area when you ask somebody and they say, where are you from? They're like, oh, San Francisco. It's like, no, but where are you really from? Because pretty much most people that are there are all transplants, which is also cool by the way. That's also a fun environment to be in where everyone's from different groups and kind of has to melt together.

Eero from Relancer (17:30)
So what are some insights companies should keep in mind when they make a market entry strategy for the US? So we mentioned already it's not going to be easy. It might take time. What else?

Rob (17:44)
Yeah. I think a few mistakes that we've, I've seen before is also people think that they're just going to relocate a number of their employees directly to the US. That's also tricky, right? I mean, the US, they want to as much as possible, like you to hire people from the local economy, as opposed to bringing across your employees. So like, you know, if you think you're going to bring a number of people over,

again, talk to a lawyer because you need to figure out who can actually get the L1 visa that they would need. And most of the time, let's say we have an employee that's a really important integral part of our company, but like, let's say that she's a head of marketing or something. The the US wants to see that this is like a CMO type of

person or that this is like an absolute critical person to the company. And you have to have a very strong reason for why you do it. And then on top of that, the application is insane. It's really tricky. For Europeans, they don't understand, but like the example I always give is like doing taxes in Europe versus doing taxes in the US. In the US you have to have

whole companies devoted to teaching you how to do your taxes and you have to pay those companies. And it's still really confusing and no one understands what the heck they're doing. In Europe, they basically automatically do the taxes for you. Like you just kind of click on a button and you're like, yeah, correct. Oh, actually my salary was this, let me add like 500 bucks here and you're done. It's very complex and that's why it's like, it's not going to be something that you're just going to be able to handle right away. now.

Eero from Relancer (19:00)
Yeah.

Rob (19:18)
So I think that's one thing. Just think about who you want to bring over. Think about your long -term strategy. A lot of companies do not do this. They're very short -sighted. It's like I described, it's like, oh, our board thinks that we should open up an office in the US. So we're going to go open up an office in the US. It's like, OK, who are you bringing? What are your reasons? What is your intention for doing this? What roles are you planning on hiring?

You know, being really intentional about like, are you going to have a physical office? Are you going to have a distributed office? Are you going to be able to hire remotely? You know, which market do you want to go to? Where's your customer base? Where are the people that you're trying to hire? Like thinking about all of these things and like really spending time to actually do that due diligence on like what you're like, why you're doing the things you're doing. And then having a long -term approach. I think that's really critical.

So not going there for three months or going there for six months and realizing like, wow, this is really expensive. Like you should know it's really expensive before you go. So you should have like a longer term approach in terms of what you're doing before you just pull out. Cause if you don't have that, then you shouldn't even bother doing it to start with. Cause it's a ton of work. It's a ton of money.

Eero from Relancer (20:25)
Yeah.

Yeah, that's something that I have always heard from startups and also investors that if you want to go to the US, you need to have enough capital. So you can't go just to try a little bit out. You have to go all in and have the capital and it will take time. Of course, the benefits can be quite high if you can penetrate the market. And like you mentioned, it's quite common, though,

Rob (21:01)
Yeah.

Eero from Relancer (21:03)
that you send some troops there, you have to keep in mind that not everyone is going to get in. Probably some of the senior level or most crucial people you can get in, but everybody else you probably need to get looked at. There's also one thing that I experienced. We haven't had anybody from the US, but one of our... So we have a remote team in Relancer and one of the team members went to Canada

Rob (21:14)
Yeah.

Yeah.

Eero from Relancer (21:32)
for some time. She was traveling in different countries and then you have to take into mind also the time difference. Of course, if it's New York, it's less, but I think at some point, they were also in San Francisco. So from Estonia, it's 10 hours. So it's either early in the morning or late in the evening. It's possible to work, but if you want to have calls, usually it's very on the edge.

Rob (21:40)
Yeah, for sure.

Eero from Relancer (22:00)
She was waking up like six or something to have calls with me or whatever.

Rob (22:03)
Yeah, it's, it's, I've done it before. It's, it's not fun. Yeah, definitely time zone. So good call out, but like, I'm kind of known for saying like, on the candidate side, your last resort should be hiring a full -time employee. Your first goal should be like, can we potentially hire like a contractor? Can we outsource this? Is there something that we can do? I think this is a similar concept with companies too, right? Like, can you hire an agency to do this stuff?

Can you hire a freelancer to kind of test this stuff out? Like before you just show up in New York with your bags and move into your Airbnb for a month and try and figure it all out. Like there's different progressions. And so trying to figure out what the right sort of risk tolerance is and how you actually validate your assumption that you're going to be able to do it. I do get it at a certain point. You just have to jump all the way in. Like you said, go big or go home type of a thing, but.

there is probably an in-between or happy medium.

Eero from Relancer (23:00)
Yeah, so what's the difference between recruiting in the US and Europe?

Rob (23:05)
Yeah, I try to pull up some data for you guys, but really quick, I think Europe's changed a lot actually since I've been here, like when I first got here, I think, you know, people were

not very aggressive, maybe a little afraid to step on people's toes and like, you know, I would ask recruiters like, oh, like how's the role going? It's like, oh, good. You know, it's a little quiet. I'm like, oh, well, what have you done so far? It's like, yeah, we wrote to 30 people. And it's like, okay, it's not very many. Like you're probably gonna have to write a lot more. And so we have seen the market get a bit more aggressive here. It's still nothing compared to the US but

looking at some of the data in terms of roles that we've recently reached out for. So this one was kind of general EU search. So that was 348 outreach, which we made a placement. This one was, local to the Finish market. And so we wrote like, you know, for an iOS developer, like 120, 140 people on web, 228 on design.

So smaller market, Finland, we made placements on all of those. This was for a junior data scientists that we were working on. Locally we wrote 275 people, made a placement. Senior product designer. We, we wrote 182 people for like general EU. And we made two placements out of this actually. So two placements out of 180.

And then we get to the US and so for this testing position, it was a remote role anywhere in the U S we wrote 1000 people, actually 999 people. We did make a placement for this one. but it was quite a bit. SRE. We wrote 595 people in the US, did not make a placement. And then this one's a real crazy one. We were working

Eero from Relancer (24:45)
Mhm.

Rob (25:00)
on some marketing roles in New York, we wrote 1243 people and we did not make a placement. And it takes a lot of work, right? The market has changed a little bit for now. Let's see, it's probably going to change back again and there's talented people actually applying right now because the market's just been in ruins globally. But traditionally,

Eero from Relancer (25:24)


Rob (25:25)
you really have to push on outbound. And another example I would give is when I started working in Instacart, when we were talking to our, to my manager, we were talking about inbound, meaning like applicant flow. And I was like, yeah, inbound is pretty garbage. And he was like, yeah, it is. It's quite garbage. And I was asked, we were going into the data. He's like, well, you know, to be honest with you, I've been here for three years and we've

Eero from Relancer (25:44)
Yeah.

Rob (25:50)
never hired anybody from inbound. We've hired 40 engineers and none of them have been from inbound. And so, you know, in the US, traditionally inbound has been awful. So that's one thing, in Europe, I think it's not uncommon that you're able to make maybe 30 to 40 % of your hires from inbound, sometimes even higher depending upon obviously the role, it's continuing to get harder as

Eero from Relancer (26:07)
Okay.

Rob (26:16)
opportunities become more distributed because again, there's more competition, but compared to the US where inbound's been an absolute zero, and then you have huge competition that you're going to have to fight against. It's a, it's a ton of work. So you also have to think about how you're going to hire, like, are you going to have a recruitment team?

Eero from Relancer (26:22)
Yeah.

Rob (26:36)
Are you going to hire agencies, headhunting fees, 20 % for hiring engineers that are 300K, that's 60K. You can burn money really fast.

Eero from Relancer (26:46)
Yeah, but how do the salary levels fluctuate? So you mentioned, for example, CMO 350 to 450k in New York or California. I don't remember now all of the cities. I did some research back in the day. So there is actually a lot of tech hubs in the US, most of the biggest cities, for example, Austin, Texas

and basically Chicago, Philadelphia, almost every of them have quite decent tech scene and then how are the salary levels in like New York or California.

Rob (27:26)
Yeah, I mean, it's, it's a lot more flexible. And that's why I say like, if you can try and hire the person remotely or distributed, because then it just gives you, it gives you options. I think like Florida, for example, is a huge state. It's kind of a burgeoning tech scene as well. So there's plenty there. I think, you know, If you're going to hire like Tampa, for example, Orlando.

Eero from Relancer (27:44)
Yeah, Miami, Florida.

Rob (27:47)
I think a lot of these, again, we talked about at the beginning, like different states have different regulations. I think Florida is a really tax friendly state. So that probably is a reason for companies to open up there. But like, you know, if you hire a CMO in New York for 450K, in Florida, maybe you hire them for like 300K. Still a ton of money. But if we look at it, that's a 50 % difference, right? So, I mean, there is...

some variation there. And I think more so you just want to give yourself as many options as possible. So like instead of hiring like every software engineer in New York, where each one you're paying 200, 250 K, you have the flexibility to maybe, okay, I hired this person in Wichita, Kansas, and I'm paying them 175 K. You're still paying a lot of money, but you know, over time, you give yourself more of an option.

Eero from Relancer (28:37)
Yeah, I was just thinking like from the recruiter side, for example, if you get the freelance recruiter, if you get somebody in San Francisco, it's like 150 euros per hour or whatever dollars per hour. And then, if you go somewhere else, I have seen even like $40 per hour. So it can be like a huge difference. you're saying still like 300k but maybe the difference also in there is like, there is a difference between a CMO and CMO

because of the size of the company, size of the market, the marketing budget. If somebody has, for example, $1 billion for marketing budget, maybe Apple has, I don't know. Probably the CMO in Europe has never seen those numbers. That's also why maybe you can pay somebody like $300 ,000 or whatever.

Rob (29:01)
Yeah.

Yeah, yeah, for sure. I mean, the budgets are a lot different. And so that can be applicable as well. I mean, the market the market varies greatly. So just giving yourself those options is is critical.

Eero from Relancer (29:36)
But for software engineers, can we give some examples in the US? And then you hire some, let's say California, and you hire somebody remote, what can be the level for a senior one?

Rob (29:40)
Yeah, well...

Yeah, I mean, and that was one thing I wanted to talk about too, which I'll get to in a second before or after I answer your question. I know for example of a guy locally in Finland actually that is working for an American company. And I would guess that he's getting 150 to 175 ,000 euros, something like that, or maybe even dollars in Europe. And then

like San Francisco, I think you're going to be paying like 300K for like a staff level engineer, for example. And it depends, it really depends on the size of the company, right? I mean, if we're talking about all the big ones that we all know, like Google, Meta, et cetera, yeah, I mean, those guys are going to pay a lot. And a lot of it actually does, it's total comp, right? So it's not purely cash. A lot of it's coming with the RSUs as well.

But then if you, if you're a smaller company, then maybe there's more flexibility. But even so, I think the thing that I was, I was going to reference is like, as the market becomes more distributed, I think the salary bands are quickly becoming a little bit more diluted. So I'll give you an example. I know for a fact that LinkedIn, like when, when COVID happened, they were like, Hey, you can go wherever you want in the US.

But like if you're going to be in, let's say San Francisco or New York or Seattle, expensive markets, you're going to keep, you're going to get a hundred percent. So let's say I'm an engineer that's making 300K, you're going to get a hundred percent. if you go to Denver or maybe secondary markets that are still expensive, it's 90%. And if you go to really affordable markets, I think as low as it would get prorated to was like either 70 or 80%.

So like, imagine getting paid $210 ,000 to live in Birmingham, Alabama. That's a ton of money for like Birmingham, Alabama. However, like this is what we're gonna start to see, right? Like the salary bands, like there are actually shockingly a number of tech companies that are in Alabama.

I would suspect that mostly like you're probably seeing engineers getting paid closer to 150 to like 175K. But when you get people like LinkedIn and you get other folks that are willing to just hire people all over the world, it's going to change those numbers. So then, you know, Shipped, the company I'm thinking about in Alabama, instead of paying 150, 175K, they're going to be like, okay, well, this other engineer got offered, you know, 200, 210K. I need to kind of move the bands.

Eero from Relancer (31:59)
Yeah.

Yeah.

Rob (32:18)
So the bands move and move and move is my point. So the same as what's happened in Europe where we get Americans coming to us and saying, hey, I want to hire a dirt cheap engineer that's just absolutely amazing out of like Romania or out of Estonia or out of somewhere else. It's like, we kind of tell them like, if they're really good, someone will have found them. We hired an engineer for one American company in Estonia and in Estonia, he was getting paid

250,000 euros. People aren't cheap anymore, right? Because if they're really good internationally, they will be found. So like, maybe these are exceptions, but the exception isn't totally the rule, but it's moving and moving and moving.

Eero from Relancer (32:48)
Yeah,

 yeah.

But in general, yeah, at least when you're starting, it's more common to build like sales teams or marketing teams in the US. And then usually companies tend to keep their dev teams somewhere else because it's quite expensive and the competition. Like you said, there is Google, Apple,

Rob (33:18)
Yeah.

Eero from Relancer (33:20)
and then Meta and then probably some other ones also like Tesla who are paying such high salaries. So you just like, some companies probably can compete but in a way you can't.

Rob (33:33)
Yeah. But I mean, like Tesla is a good example, right? You look at Elon Musk, he's just like, why am I going to continue to pay these prices? Why don't we open up a plant in Nevada and open up a plant in Texas? And they're going to move more and more of their employees there. Cause also there's the taxation involved as well but like, I mean, it doesn't make as much sense anymore to just like, all right, I'm opening office in San Francisco and hiring a thousand people in San Francisco. I don't know if you still get as much out of that as you used to, and it's just really expensive.

Eero from Relancer (34:01)
What are the cultural differences between Americans and Europeans?

Rob (34:03)
Yeah. So cultural differences, I think I don't want to over dramatize this because people talk about it enough. And I think frankly, some of it is exaggerated, but I think it is a bit more intense in the US, a lot of it just comes from like, I mean, it's really how the system's set up. So at-will employment, it's not, it's more pro commerce, pro business than pro employee. So you can fire an employee at any time. Whereas

as we know in Europe, you know, you make it past probationary period. It's almost impossible to fire these people. And then the other thing is exempt versus non-exempt employees. So pretty much any white collar employee is going to be exempt. What that means is, like I can make 200K and I can work 40 hours a week or 80 hours a week. I'm still making 200K. That doesn't change at all.

And so what that results in is a much more kind of competitive environment. So I think those are pretty dramatic differences. As well as like, I think people here like in Europe or maybe this is generalization, but like, I think as a whole, I think people in Europe are maybe a little bit less career driven and more sort of well-rounded than

in the US at times, in the US it's very all or nothing in some cases. So what does that result in? Well, and one other thing I would actually cite as well because it's becoming a disease in my opinion is like unlimited paid time off in the US as opposed to the holidays that we get here in Europe. Unlimited PTO in the US, what that's code for is kind of a big brother system

where you're looking next to you to see if your coworkers are taking time off and they're not. So you continue to work and then you get laid off in six months and then you never took any time off and they don't have to pay you anything either. And so my point is like, I just think that it's more of an environment type of a thing where it's just, it's a little bit maybe more,

Eero from Relancer (35:52)
Yeah.

Rob (36:08)
I don't want to call it purely toxic because it's like, yeah, it's maybe it's not great in some ways, but it's more focused and work driven, I would say, whereas in Europe, I think more times than not, a lot of it is like, work's just something that we do. It's not really our lives. It's just a part of our lives. And Europe's really good about trying to make work complement your life

as opposed to the US at times, it's like, work kind of dominates your life.

Eero from Relancer (36:35)
But for example, if you're doing outreach to the candidates in the US, what is the difference? What do you focus on? Is it the career or...?

Rob (36:46)
I think, I think it's the same. I don't think that really changes that much. I think, you know, you try and sell like, people are going to respond, like gravitate towards what they're interested in. So if you have an interesting product, I think people are going or if you have something that's interesting or applicable to them, let's say you're really into, network infrastructure and open source tech. If I reach out as a recruiter from a company that does that,

I think they're still going to gravitate towards that. I think it's a little overblown that, you know, engineers are just engineers or people in the US are just like soulless and they're just like, whoever's going to pay me the most money is going to win the day. It's a factor. I don't think, especially as these numbers get crazier and crazier, you know, if someone makes 300K and works at a company that they really love, or they make 500K working in an industry or in a vertical that they despise.

I think they're fine to take the 300K. So yeah, I don't think it changes dramatically. I think people can be more choosy. Like one thing that I see a lot with recruitment here, as opposed to the US, the negotiations are just a lot easier here. In the US, again, because it's such a congested marketplace, you'll be talking to someone that's got five different offers.

And, they're also, they're very knowledgeable, right? Cause they have more experience. Kind of like interviewing, switching jobs. I think things change a lot faster in the US, people are maybe a little bit less risk averse in the US as opposed to Europe. It's changing a lot. I think I'm seeing people that have traditionally risk averse markets. I would say Finland is frankly a little bit like risk averse. I think it's moving a bit.

But the people in the US are used to being hit with an onslaught of recruitment messages and calls. And they proactively take those to try and like get more information. Whereas I think in Europe, a lot of the time it's like, leave me alone. I'm fine where I am. Just stop bugging me which I hate. But like you do get more experience and frankly, you put yourself in an advantageous position by

Eero from Relancer (38:35)
Mhm.

Rob (38:51)
talking to more people, switching companies a little bit faster, taking more risks. So yeah, I mean, there's a multitude of factors there, but like, I think those are some of the things that I see.

Eero from Relancer (38:58)
Yeah,

I think there is a fun example with Netflix. I don't know if they still do it, but they encourage people to take those calls. So if somebody is willing to offer more, they usually say, OK, now the market level has increased, I will pay you more. Some companies can do that.

Rob (39:17)
Yeah. Well, and I can tell you sitting on the, yeah, exactly. I mean, it's some of it's just money. But like, I can also tell you sitting on the other side of that, like trying to hire somebody from Netflix, they've sat there and been like, I don't need money. I don't need cash. I want all the equity that you can possibly give. And so you're sitting there looking at your compensation bands and they're like asking for insane equity. So then you kind of have to go back to the manager and be like, can we, can we do this?

So there's just, I mean, there's a lot more variability, complexity, and the negotiations because companies can offer more and there's just more companies overall.

And it gets harder as the world gets more international as well. Cause instead of hiring for just an engineer, like instead of it being the thousands of companies in San Francisco that are hiring for an engineer, it becomes all the distributed companies as well spread out across the United States and maybe even Europe. So then you get more and more companies, which makes it more and more of a problem.

Eero from Relancer (40:14)
So how do you convince somebody to join a foreign company if you're a no-name, nobody knows you?

How do you convince them to join somebody from Europe?

Rob (40:24)
Yeah, I think because I've done this for quite a while, I look at this from a very desensitized viewpoint. I look at this as a math problem, basically. I mean, I kind of look at the data, like how many people we need to write. I talk oftentimes about like giving yourself as many options as possible. So we talked about hiring distributed as opposed to hiring strictly in New York or strictly in San Francisco. And then the other thing that I talk a lot about is kind of like mental inception, which I referenced earlier.

If you source really well, if you target really well, going back to that sort of networking open source type of company, if you sit there and you map out every sort of networking open source related product and you give yourself a really broad array of locations, then I think you have this like natural inception where it's like you write them, but like they're already thinking about solving these problems every day anyways,

plus you give yourself the chance of going all over the United States. So you're giving yourself more options, plus you're kind of hitting a bullseye in terms of what you're trying to find. So that's what it looks like in sort of a perfect world from a targeting perspective. And then it becomes how you sell yourself. So what's your brand? How much information do you have on yourself? If you are a no-name company, do you at least have...

Eero from Relancer (41:37)
Okay. you.

Rob (41:46)
I look at companies as minimum viable products. Like, do you at least have something that we can kind of hang on to and say, but listen, we're doing this. This is why this is so cool. And we have some numbers to back it up. I think that's something, being able to tell a story. It's like, you're only, a lot of people roll their eyes at this, but recruitment is sales, right? Like you're only as good as the product that you have to sell, which the product is a company. So if you don't have a very inspiring company,

Um.

could be challenging, but I think much like us, we're all unique snowflakes and we should be able to sell anything. We all have cool things about us. So like that may be, I think we try to just really lean into that. And then the third thing, so it's gotta be preparation, right? So like, how much money do we have? What are our bands? Like what kind of benefits can we offer? Like that's another thing that we haven't even...

Eero from Relancer (42:15)
Okay, yeah, yeah, yeah

Rob (42:38)
even broached and that's a huge discussion. The US is really complex because everything is privatized. There's, there's nothing, like in Europe, a lot of it's kind like you have socialized support and medicine and all sorts of everything else, in the States, you have to figure all this stuff out. So a lot of these big companies that you're competing against, they know all this stuff. This is their game that you're playing. So like they've already got like the best.

Eero from Relancer (42:55)
Yeah.

Rob (43:02)
the best HMOs and the best PPOs and they know the difference between Anthem and Blue Cross and Kaiser and whatever it may be. Like they know all the stuff. They know about, you know, 401ks, which are completely a novel thing to Europeans. They know about like how to match 401ks. Like they made the game. And so you have to understand all this stuff if you want to compete in that market.

It's not like you just do one thing and it works for you. And that's why I come back to like, it's a math problem, right? Like you're trying to give yourself the best chance as possible with the benefits that you're offering with the product that you're able to product-mission-vision that you're trying to sell. Plus giving yourself as many options as possible within the United States to hire people. That is my recommendation. I think the worst thing you can do is go into.

Eero from Relancer (43:34)
Yeah,

yeah.

Rob (43:53)
the most competitive market on Earth, not figuring any of this stuff out and then say like, I'm just going to sell people. I have such a cool product. No one cares about your company. That's the first thing that you should take away, when the US, it's in Europe too, it's not just US. I oftentimes have to tell founders like no one cares about your company. So like you need to like pull your head out of your you-know-what. Because  you have to sell.

Like you can't just sit there and be like, oh, like we were this like really cool company and Latvia and like everyone loved us locally. That's great. But we're, you're now competing against a huge, huge, huge group of companies.

Eero from Relancer (44:37)
Yeah, so you mentioned a lot of terms, can you tell us Europeans what they are, like you said, probably some of them are  insurance related...

Rob (44:48)
Yeah. So it's like, HMO, PPO, Kaiser, Anthem, Blue Cross. So HMO, PPO, those are different types of insurance policies. HMO basically ties it more to like, hey, you have to go to this specific doctor. PPO gives you the option to go to different doctors right away, as opposed to like initially having to go to a general practitioner and then kind of going down the line. And then Blue Anthem, Blue Cross, all this other stuff,

these are just different types of insurances and insurance companies, I should say. They have different levels of deductibles that you have to pay. And so like, that's a, that's a huge thing in the States, especially as a family is like, okay, how much money am I going to pay towards healthcare? What happens if I, if, you know, little Susie wakes up one day and gets hit by a car, like what are we going to do?

So yeah, I mean, there's the healthcare side of it, which is much, much, much more complex than Europe. And then there's like the 401k side. So that's, that's a retirement account. So that's a little bit more confusing. I would also say the equity side, that's moving a little bit, but like, you know, that's a lot more confusing and it's a lot more, it's a lot more competitive. I think here in Europe, a lot of the time,

you're able to get away with just giving like a token of appreciation equity grant where it's like, Hey, everyone gets equity. They work at the company and we're giving you X amount of grants. No, in the US like people are like on it, like, okay, what's the percentage? What's the dilution rate? Like, what's this? What's that? Like they will ask all of these questions. So it just becomes something where it's like, you really have to be a lawyer and prove your case, right? Like you have to know your stuff inside and out to, I think, be able to

Eero from Relancer (46:20)
Yes.

Rob (46:32)
close people. And then there's the personal touch, which I always really encourage as well, like actually spending time with these people, sitting down with lunch, going for a coffee or a beer, like being able to actually sell this vision because it's not easy.

Eero from Relancer (46:34)
Yeah.

Yeah, I think one of the examples is the equity. Like you said, when I hire people outside of tech, I usually have to start explaining to them how stock options work, what it is. Most of the times you don't know anything about it. Then I send some YouTube videos or whatever to explain it. It's really simple. But why should anybody go through the trouble of hiring in the US if it's so challenging?

Rob (46:58)
 Yeah.

Yeah, it's, -

Eero from Relancer (47:16)
Of course, everything is challenging and expensive.

Rob (47:19)
I mean, you're only as good as your people, right? I think if you can find talent that you can't find in Europe, that's great. I do caution people, like, can you actually find the talent that you can't find in Europe? Meaning like, yes, the talent exists, but are you going to be able to attract that talent? I think that's one. But then two, the market's just massive. So like, if you want to be successful, like, you do eventually have to sell to the US, right?

Some people would hire for network, especially if it's sales. I think more so you're looking at like, can I hire somebody and there's this like 10X multiplier on that hire where they're able to teach us so much and we're able to get so much value from them that it's really critical. But yeah, you have to weigh all the risks, right? And then you have to try and hire the right people to do these things in the right markets, the right time.

It's a challenging thing, but if you do it correctly, obviously it can really scale your company super fast. So it's of course worth the risk if it comes to fruition.

Eero from Relancer (48:23)
Yeah, I did some number digging also. So I looked in dealroom.co. So basically, North America, this is the numbers of 2020, end of 2020. So 58 % of the unicorns in the world are in the North America. And then there is like EMEA. So it's like Europe, Middle East. I don't remember what was the last one.

But then Africa, it's like 18 % and in Asia and the Oceania, like 23%. So basically, almost 60 % of the unicorns are in the US. And so there's tons of really high-level people who have built unicorns. And then if you want to hire some people who have been there in the early days, this is definitely the plus.

perfect place to find them if you can attract them and if you can compensate them.

Rob (49:20)
Yeah.

Yeah, I've been looking for a nice way to say this, but intelligence wise, there's no difference between Asia, Africa, Europe, North America. I think it's more situationally speaking, in the US, like we talked about with the San Francisco example at the beginning where you're coming across all these different entrepreneurs. And like it's you're getting so quickly this consolidated punch of like, Oh my God, there's so much going on here.

It's the same with talent where it's like, there's so many companies going through so many different stages and different little niches and verticals that like, we just don't have access to here. So like they maybe have been through three, four or five scale ups and they're like 35 years old. Right. Whereas here, you know, maybe it's in a country in Estonia or Finland or wherever you may be, you know, maybe there's only

like one to two to three to four scale ups that are even kind of compared to the five scale ups that this one person went through. And so it's more of a situational thing where it's like they've seen this stuff, they've seen a really valuable market. So to be able to leverage that is really important.

Eero from Relancer (50:31)
Yeah. And maybe one thing to mention, you have to also be aware of this big name trap, or I don't know how to call it. I have seen also from the start up techs, so they're fundraising, they're saying, hey, I'm ex this company, I'm ex that company. And then it's a question, OK, were you one of the first 100 people or first 10 people or

or you're one of the 5 ,000 people of that company, of course, in the name, it looks fancy. Oh, he worked at Tesla, Netflix, or in Estonia, Bolt. But if you're like the 2 ,000th employee of Bolt, then it's not so amazing anymore. You're probably doing a small piece of that pie.

Rob (51:05)
Yeah.

Yeah.

For sure. There's a, like another side of this, right? Like all of my friends are so here are so impressed. Like, oh my God, I wonder if they've worked at Meta or if they've worked at Google. It's like where I'm from, like, it feels like everyone works at Meta. Like, you know, it's a huge employer, right? So like, if you grew up in the Bay area, it's not like unheard of that you would work at Meta or you would work at Google.

Eero from Relancer (51:40)
Yeah.

Rob (51:45)
There is an overinflation that also exists. And that's why I'm saying it's like, if you're going to invest the time and the money, make sure that you're getting the right people in the right market. Cause there is an inflated version of this and all Americans can sell. We wake up, we are born, we come out of the womb selling. And so like, you know, we are very tricky people as Americans. So you have to be careful with like,

am I getting a salesperson or am I getting somebody that actually really knows their stuff?

Eero from Relancer (52:12)
Yeah.

Yeah, I think everybody has heard the horror stories of salespeople who were very good to do the sales of themselves and negotiate their salary, but after that, they're useless. Okay.

Rob (52:30)
Yep.

Yeah, I mean, we're very good at negotiating salaries.

Eero from Relancer (52:35)
Yeah, so I think it's good time to wrap it up. So that's it for the episode six of Relancer podcast. If you like this episode, feel free to subscribe and share it. Thank you for tuning in and I hope to see you in the next one.

Rob (52:49)
Cool, thanks Eero.