Nova is launching in the UK - our playbook for international expansion
Not all companies follow the same approach when it comes to expanding to other countries. This is how we do it at Nova.
Hey, we are Ramón Rodrigáñez and Andrea Marino, Co-Founders at Nova, the Global Top Talent Network.
Welcome to Talent First, our newsletter where those who believe that talent is the most important resource in the economy get together.
Every week we cover a new topic related to attracting, hiring, developing, and retaining talent, as well as the learnings from our journey building Nova.
Summary:
Why and how we are expanding to the UK. We are very excited to retake our international expansion after some tough months for the organization where we had to postpone our plans. Today we want to tell you more about how Nova has grown internationally this far, why we are expanding into the UK, and how we plan to do it with our first version of a “playbook” for international expansion.
Nova UK Launching event. We will officially launch in London tomorrow, May 9th, with one of Nova’s most appreciated event formats: a C-Level talk with Luis Quiroga, co-founder at Asper Investment Management. If you are curious to learn more about Nova and our plans for the UK, get your ticket below (open to non-Nova members).
1. Why and how are we expanding to the UK
How we started Nova and our expansion into Sweden, Spain, and Italy
Before we tell you about why and how we launched in the UK, we believe it’s better to tell you more about how we started Nova and made it into an international company from the outstart with 3 markets in the first 2 years: Sweden, Spain, and Italy. It is a rather strange configuration of markets if you think about it, but there is good reasoning behind it. We hope this will help you understand our thinking in moving to the UK and may answer some doubts we often get asked.
Our origins - Nova is a Swedish company
Nova was incorporated in 2020 as a Swedish entity. Cool, right? In the end, Sweden has produced a bunch of global, legendary companies like IKEA, Spotify, Klarna, and Skype, which have created a sort of “aura” that plays into our favor when people know we are a Swedish company.
However, we are 3 co-founders from 3 different markets: Sweden (Lars), Spain (Ramón), and Italy (Andrea), so we had agreed from the outstart to grow an international company with ideally no boundaries in terms of geographies.
Solving the “chicken and egg problem”
As you might know, we did not create Nova from scratch. That would have been a lot tougher, as it is in any network business: imagine we had only 10 or 100 members - what would the value for both members and client companies be?
This is the classic “chicken and egg problem” that happens in any marketplace type of business, which makes them very hard to start but also to replicate. In our case, we had some unfair advantage: we did not start the company from scratch but rather purchased an existing company, “Nova 100”, which was started in 1997 in Sweden by our co-founder Lars. We got in touch by working at Nova 100, where Andrea was Head of International Expansion and Ramón was the CEO of the Spanish franchise created in 2016 in Spain.
Think of Nova 100 as a kind of “traditional recruitment agency” with some extra employer branding services offered to companies. It already had some of the secret sauce of Nova (entering the database was already merit-based, and it was focused on the same “customer persona”, top talented individuals aged 20 through 35), but it was not a network as you wouldn’t know who else was part of it and it had no technology to enable connections or matching.
In our expansion to Spain, for 3 years we proved that creating a true network or community underneath the headhunting business was a great idea, as it enabled us to source better candidates and to have a closer relationship with them by offering them value when they were NOT looking for a job. We were on to something better than what Nova 100 had been in Sweden.
Finally, towards the end of 2019, we understood that there was an opportunity to create something bigger and more scalable: a global network for the top 3% of talent, a kind of mix between LinkedIn and YPO for top talent young professionals, bringing all the learnings from Nova 100 and particularly from our community in Spain. And we went for it, this time with the 3 of us as co-founders, without any franchise and with the ambition to empower this network with proprietary technology to help us scale and nurture connections. Nova as you know it today was born in January 2020.
Right after incorporating the company, we purchased Nova 100 and its database, which helped us solve the “chicken and egg problem”: we started with ~5.000 prevetted top talent in the network, about 3.000 in Sweden and 2.000 in Spain, and some good client relationships with companies including McKinsey, BCG or Fevet, so we could directly launch the company in both markets and offer value for members and clients from the get-go.
Our expansion to Italy
Our company is a network by definition and, like all networks, it provides more value the bigger it is (in our case, provided that we maintain the level of quality of the members and companies we work with - this is a must-have in our case). This is defined as “network effects”, which happens at Nova in 2 ways:
Direct network effects: the more talented members we have, the more valuable it is for each member because the quality and accuracy of connections in tools such as Gravity are higher. This is the kind of network effect of any social media platform like LinkedIn, WhatsApp, or Facebook.
Indirect network effects: the more top talented members we have, the more valuable Nova is for each client company as there are more potential top-quality candidates. Also, the more companies we work with, the more cool jobs we have in our platform, making it also more interesting for members to join us. This is the kind of network effect of marketplace and platforms such as Uber or Glovo.
These network effects are very clear at Nova and, since our members speak fluent English and travel or relocate often for work, it’s very clear that if Nova was present in more cities around the world each single member would get more value from the network. Moreover, many of our B2B clients are multinational corporates, who would rather not have too many different providers in each local market.
Thus, we saw from the beginning that we needed to grow Nova internationally as fast as possible to better serve members and clients. In our first thinking about where to start, although we discussed a few potential markets, Italy came up soon as the more logical because of 3 main reasons:
We could leverage Andrea’s network and understanding of the market and be able to launch without a country manager
It was the most similar to Spain in terms of dynamics and culture, and Spain was already ahead of Sweden as our biggest and fastest-growing market
It was not the biggest of markets and, even if we failed, it would not have been too dramatic for Nova into the future. This enabled us to test and refine a “playbook” for international expansion that we could then replicate in bigger markets such as the UK, Germany, or the US.
Finally, towards the end of 2021, and thanks to a funding round with members and BAs, we decided to expand into Italy and created our “playbook” for international expansion. The outcome was just great: Italy is today the community with the highest level of engagement at Nova (measured through KPIs such as Monthly Active Users in our platform or events attended per member). The fact that we entered with the new brand, a much better technology, and a new vision (not through the old “Nova 100”), has of course helped a lot in this success.
Why we are launching in the UK as our 4th market
We have been planning to launch in the UK since the summer of 2022, so almost 2 years now. However, we had to postpone it as we had a big financing round canceled towards the end of 2022 with a Term Sheet signed and DD passed (we will write soon about it). After this round was canceled, we saved the company through an angel round, a round of layoffs to reduce costs (we will also soon write an issue about this), a change of operating model, and a pivot to charge the membership under high uncertainty and pressure, so it was not the time to distract ourselves further with new countries.
Now that we have proven a better business model with the membership, we believe it’s time to get back to our plan of making Nova a global business. The choice of the UK as our next market was relatively easy:
First, we chose the UK because it’s the market where we have the highest volume of Nova members outside of Sweden, Spain, and Italy. The UK, and London in particular, is a classic destination for many top talented young professionals from all around Europe, particularly if you are interested in Finance or Technology. We now have more than 1.000 Novas living in the UK, most of them in London, many of whom are Spanish, Italian, or Swedish in origin but who traveled there for work or to attend some of the most prestigious universities in Europe such as Cambridge, Oxford, Imperial College or LSE.
Second, the London community at Nova has been one of the most active in the past few years. Not only did we have many Novas relative to other European cities, but those Novas were more engaged and more active in the network, organizing afterworks, sports activities and dinners on their own thanks to the leadership of our City Leaders (thank you Rebeca and María!). Here Nova is in essence a “club”, as we still have no jobs and the whole value is around being able to connect with great people.
Finally, from a more “business” perspective, London is a fantastic city for Nova in both our B2C and B2B businesses:
On the B2C side, salaries are higher, which means paying a 149€/year membership is nothing for the value Nova can bring (2-3 dinners?). London is a city of expats and we know expats are a particularly good population for us, as they have relatively more time to engage in the network vs. locals (where Nova competes with more family/friends plans) and thus get more value from Nova and become power users.
On the B2B side, London is one of the markets with higher salaries, higher rotation, and bigger volumes of white-collar jobs in Europe, which means our tools and services for Employer Branding and Recruitment will be appreciated by companies looking to hire top talent. We expect Londong to become bigger than Spain, Italy, and Sweden combined in the B2B business in the coming 3-5 years.
We have countless stories of Novas finding their jobs, friends, roommates, and co-founders in the Nova UK network. Now we want to double down our effort to bring them even more value.
How we are planning our UK expansion
In 2022 we created the first version of our playbook for international expansion with the learnings of opening in Italy, where we applied our best strategies from the Spanish expansion of Nova 100 and refined them with new insights. Now, with the new B2C model based on memberships, we have refined it and will test a new version in the UK, to keep iterating it as we move into new countries.
When we plan an expansion to a new market, we typically distinguish 3 phases:
Phase 0 - Getting to critical mass
For Nova to work in a country, we need a certain critical mass to make it somehow relevant and useful to properly launch a market. This critical mass is around ~500 people and has to gravitate around 1 city ideally (that is why opening in the UK and launching in London is more or less the same to us, as 90% of our members in the UK concentrate in London).
This initial critical mass is somewhere around 500-1.000 members, a size which gives us the ability to host frequent events and make tools like Gravity work well within the country market (without the need for international connections).
We drive this growth without local employees thanks to the work of our global community team led by Elías and Fátima, who run our City Leaders program and ensure there are Nova gatherings in more than 20 cities around the globe. City Leaders are Nova members who especially contribute to the community by being the local “heroes” who make things happen and get a special status and rewards from us as a sign of gratitude.
However, we do not have yet a “secret sauce” of cracking this critical mass in a given city at a certain speed, and that is in our plans for the next 12-18 months as we prepare to accelerate in new markets. For now, this has happened rather “autonomously” thanks to our network effects and to our Novas relocating for work, and thus we haven’t done anything in particular in the UK to achieve this other than wait for it to happen.
Phase 1 - Launching the community (B2C launch)
Once we hit that critical mass of 500-1.000, we can properly launch the community and put people on the ground to run the community and accelerate growth. This is the phase we are now launching in the UK: a pure B2C play where we plan to focus on growing a great community of top talent that thrives and provides more value just as a “club” of top talent. Here, we activate 4 main areas of work:
First local team to accelerate operations and local value. We start by hiring a local Community Builder who comes to support the City Leaders and help accelerate our offer of events and value in the new market. This person will also be the one in charge of the partnerships and growth strategy locally.
Presence at local universities, ambassadors, and partnerships to accelerate growth. Finally, thanks to the local presence of our Community Builder, we start our playbook for local growth with partnerships with local universities and associations, which help us spread the word around Nova and source members. We also started our ambassadors’ program which enables us to source diverse students at almost all universities in a given market through a network of Novas already studying at those universities who also get compensated for their support.
100 “Founding Members” to help accelerate diverse growth. Founding Members are 100 key individuals who help us shape the community going forward in a given market by bringing at least 10 people each into Nova (100*10 = 1.000 people who will determine how Nova looks like in a given market). We look for very talented individuals (probably more among the top 0.1% rather than the top 3%) across a variety of industries, roles, and seniorities to help us plant many “seeds” of different types of members which can then grow by themselves. These Founding Members get special treatment, status, and benefits in exchange for playing this pivotal role in shaping our community in a local market. We are now looking for our Founding Members in the UK (we have secured ~50).
Nova 111 List to accelerate growth and get local PR. The Nova 111 List helps us find the most talented 111 young professionals under 35 in a given market. Since being on the list is highly prestigious and gets quite viral on LinkedIn and traditional media, these lists help us in 3 ways:
Source several hundred members at a time (if you apply to the list and win, you get 1 year of free membership, but even if you do not win you may be accepted into the network).
Get our brand known in the market through both virality on LinkedIn and appearance in local traditional media outlets.
Start the first B2B conversations, as the Nova 111 is a very unique Employer Branding tool for companies who want to position themselves in front of top talent.
Thus, expect us to be launching the first edition of the UK’s Nova 111 List in the coming months 👀.
Phase 2 - Launching the recruitment business (B2B launch)
Phase 2 involves putting together a local B2B team of Account Executives and Talent Agents who will work with client companies to support them in attracting and hiring top talented young professionals.
Although we started phase 2 almost at the same time as phase 1 in Italy, we now have come to understand that 500-1.000 members are not enough to have an edge vs. LinkedIn or headhunters in supporting our clients, so we have decoupled both phases and we won’t start phase 2 until we have a bigger reach (probably around ~2.000 members in a market).
Moreover, instead of running the B2B part on our own, we are moving towards a partnership strategy where we plan to keep the platform business in-house and partner with local headhunters for the times when a client needs extra service on top.
Although we have already closed our first jobs in the UK, you won’t see them exploding probably until the end of 2024 / beginning of 2025. We will keep you posted on this ;)
2. Nova UK Launching Event
Join us next Thursday, May 9th, for our official launching event in the UK, where we will be hosting a great C-Level Talk with Luis Quiroga, co-founder at Asper Investment Management. We will both (Andrea and Ramón) go together with Elías, our partner, first employee, and Global Head of Community.
The event is open to the world, so even if you are not a Nova member just yet, we would be delighted to meet you there for the beers after the event (tickets are already sold out).
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