In Silicon Valley, Failure is accepted — it’s not accepted to not being Ambitious at the first place
Very interesting discussions last week with local venture investors last week on funding culture in Palo Alto. Entrepreneurship culture in Silicon Valley was created in 1970’s the combination of Stanford University, Hewlett Packard and money. Monopoly profits created on the first wave, silicon chips, enabled investments to the next generation technologies: computers and later on telecom, software and mobile applications, AI and VR. In 2000’s Chinese are diversifying their portfolio in Silicon Valley, which has had a strong impact on housing prices.
Silicon Valley is the leading, most complete and best functioning tech ecosystem in a world with a complete talent pool. Of total $62.8 billion venture markets in USA, over 45% of deals are done in California.
Silicon Valley is a very different market than the US and Europe, so you play different rules. Companies come here very early and deal flow is better benchmarked from here. Money available drives the whole mindset. For a startup, local presence and networks are important, because buyers, who pays the most money, don’t buy companies have not heard on.
Level of ambitious is tremendous and even the niche market potential can be tremendous. Everybody is hunting for the next 1 billion business (unicorn or not). This makes the ability to grow very important. The right speed to move is not speed but 1/speed. The faster traction means faster market leadership and faster monopoly profits. Still, one of the strength of the Silicon Valley is unique pay forward -culture.
Month to month growth is valued higher than cash profitability. In SaaS, the higher the growth, the less profitability and the higher valuation. Make sure you understand your metrics and earning logic very clearly, because VC’s in Silicon Valley are not tracking P/L driven metrics like EBITDA but MRR growth %, ARR growth %, LTV and CAC.
Silicon Valley is the hardest markets to fundraising, actually it’s the Olympics of fundraising. Failure is accepted — while it’s not accepted not being ambitious at the first place.
The author is the Founder of BackedByCFO, CFO As A Service from seed to IPO, the greatest passion to help CEO’s with cashflow and metrics