I recently participated in a one-week Silicon Valley tour that was organized by the Finnish executive networking company Boardman. Together with a group of fellow-Finns, most of us entrepreneurs, investors and growth advisors, we had a chance to hear the Silicon Valley experiences of many interesting startups and tech giants. I’ll provide a brief 5-point recap of the visit in particular from the point of view of internationalization, the special focus of my company Takeoff Partners.
1) Attitude is key
Well you knew this one, right? During our visit we heard about ‘Thinking Big’ quite a few times. Silicon Valley is no place for mediocre growth plans. Also logically, without the famous ‘Can Do’ attitude one just simply won’t sustain in such tough place as SV.
Balancing out the tough culture on the other hand is the ‘Pay it Forward’ tradition: People tend to be very helpful to each other and they willingly share information for the benefit of the entire community.
2) It’s the Olympics in Silicon Valley
You wouldn’t go to the Olympics without giving it your best shot ever, would you? In Silicon Valley, there are the absolute top teams, top advisors, top financiers, top ecosystems overall. Be prepared to fit in with a brilliant idea and a well rounded team.
This on the other hand also means that SV is the most expensive place there is to develop a business. A sales director will cost between 300-400 kUSD (50% base salary and 50% bonus), and the tech guys will be highly expensive as well. If a foreign company were to take their tech team to SV, they will risk the competition offering better packages and that way luring the experts to change jobs.
3) Technical things to keep in mind
- Forget NDA’s. In Silicon Valley, an idea alone is not seen as very valuable.
- If you’re a company from abroad and seek VC finance from SV, the best approach is to establish a local company up front (in Delaware for the smoothest process). The locals are reluctant to invest in European companies since understanding their legal and other characteristics would require a lot of extra effort.
- Valuations in general are way bigger than the average levels in Europe. Just a team with a plan may seek millions of dollars to start with. Here’s where the toughness comes in, though: The conditions for the founders may be very demanding, ‘3 x Liquidation Preference’ meaning that investors will require their money back threefold before the founders and other shareholders will get anything in an exit.
4) Interesting trends in leadership culture and branding
It’s been a known fact for long that the local companies in Silicon Valley compete fiercely for the best talent. Companies such as Google and Facebook have been famous for offering lavish perks for employees but the style has been evolving lately. Recently it’s become commonplace in the leadership culture that team members will showcase their projects and that way also put the spotlight on their leaders.
In branding, stories that have emotional appeal (Pandora as an example) have emerged as a way of promoting the company and its products.
5) Opportunities of interest to investors right now
Solutions for more efficient asset management (such as Airbnb and Uber) are a hot potato currently: The ROI on asset utilization dwarfs every other use case for the Internet of Things.
The Blockchain (Bitcoin) technology will also bring huge new possibilities and will provide for many changes in the financial markets and marketplaces.
Boardman’s Silicon Valley tour was extremely well received among our group, and the tradition will be continued for good reasons. In addition to the insights and contacts obtained on the spot, the tour was a great opportunity for us travelers with different backgrounds to get to know each other. Information about next year’s Silicon Valley tour is already online on Boardman’s website, and I’ll highly recommend the experience to any Finns who want to get the flavor of Silicon Valley first hand!
– Markko Vaarnas
This post was originally published HERE