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The Contrarian Path to Category Creation in Europe: Why Being Second to Market Might Be Your Best Strategy
Product-obsessed founders often struggle to balance innovation with market reality. But in a recent Category Visionaries episode, Figures CEO Virgile Raingeard reveals how following established U.S. players can actually accelerate category creation in European markets.
While U.S. compensation tech companies like Pave race ahead with $100M funding rounds, Figures is charting a different course. Rather than viewing U.S. competitors as threats, Virgile sees them as category educators who validate market demand while inadvertently creating barriers to their own European expansion.
“Competition is a great thing,” Virgile explains. “It’s impacting us greatly because it’s showing that the space is there to stay. And none of those are coming to Europe.” This isn’t just optimism – it’s strategic insight into European market dynamics.
The challenge for U.S. players entering Europe isn’t just geographical fragmentation. As Virgile notes, “Europe is like a very fragmented geographical area. Entering Spain is no different than selling into France, entering to Germany, especially when it comes to compensation, because there’s a lot of data privacy topics that comes into play.”
This regulatory complexity creates what Virgile calls a “noble” obstacle: “Privacy is a super sensitive concern, especially in Germany and France to an extent. And so for a U.S. player to come in and being like, ‘Hey, come on, get give us your compensation information,’ is very tough.”
Rather than fighting this market reality, Figures embraces it. They watch U.S. players closely, not to copy, but to learn. “When we are building this module, in terms of salary bands, one thing that we are doing, and we are very upfront about it, is we are looking at some of the three or four or five competitors in the U.S.,” Virgile shares. “We are looking at their product videos and being like, that seems a good idea, that seems like a good idea.”
This approach offers a fascinating counterpoint to the common startup narrative of being first to market. Instead of building everything from scratch, Figures can focus on adapting proven solutions to European market needs. As Virgile puts it, “I feel a lot more reassured that we can just in a way, have a look at some competition, some benchmark to design some of our new features instead of starting from scratch entirely, which is very more risky.”
But this strategy isn’t just about product development – it’s about category creation itself. While U.S. players educate the market about compensation intelligence globally, Figures can focus on building trust locally. This is crucial in Europe, where data privacy concerns make trust the primary barrier to adoption.
The result? Figures has become the market leader in Europe without fighting the uphill battle of category education. As Virgile notes, “We are market leaders in that space.” They’ve achieved this by letting U.S. competitors handle the heavy lifting of category creation while focusing on regional execution.
For founders considering European expansion or category creation, this offers an important lesson: Sometimes the best strategy isn’t to be first, but to be first where it matters. Understanding local market dynamics, regulatory environments, and cultural nuances can be more valuable than raw speed to market.
The key is to recognize when being second mover is actually an advantage. In Europe’s fragmented market, where trust and compliance matter more than pure innovation, following established players might be the smartest path to category leadership.
Actionable
Takeaways
Leverage Personal Pain Points as Innovation Drivers:
Virgile's journey with Figures began from his personal frustration with the lack of reliable compensation data. For B2B tech founders, leveraging personal pain points can be a powerful source of innovation, often leading to solutions that address widespread industry challenges.
Embrace the Power of Simplicity in Initial Offerings:
The initial success of Figures was based on a simple Google Sheet exchanged for compensation data. This simplicity in product offering can be crucial for early traction. Founders should consider launching with a minimal, straightforward solution that directly addresses a core problem, then evolve based on user feedback.
Prioritize Product Security from Day One:
Given the sensitivity of compensation data, Figures places a high emphasis on security measures to avoid breaches. For founders in the tech space, prioritizing product security from the outset is essential, especially when handling sensitive customer data. Investing in certifications like ISO 27001 and SOC 2 can build trust and credibility.
Use Humor to Stand Out in Marketing:
Figures incorporates humor into its marketing and product videos to engage audiences. This approach can differentiate a brand in crowded markets. Founders should consider authentic ways to infuse personality into their marketing efforts, making their brand more relatable and memorable.
Monitor Competitors for Inspiration, Not Intimidation:
Observing the evolving 'CompTech' space in the US, Figures draws inspiration for new features and strategic directions. Founders should view competitors as a source of learning and inspiration for product development and market positioning, rather than a threat.
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