Lessons learned: European founder in Silicon Valley
I had a chance to visit San Francisco for 3 months last year. I met many European founders coming to Bay Area and hope this might help those who are planning to do so.
- I decided to go with no specific goal on my mind and it was a great choice. Forget closing deals or raising money if you are visiting for the first time. You will learn and enjoy much more if you focus on observation and networking.
- 3–4 weeks are perfectly enough for the first visit. If you think that staying for 5 months will get you an investment please refer to point 1 :)
- San Francisco is expensive comparing to Prague where I live. My monthly costs exceeded $3,000. One needs some $2,500 a month to survive — sleeping on a bunk bed in a hacker house for $1,000 + $1,500 for food, transport, events, … $4,000 budget secures a middle class lifestyle — own room, drink or trip on weekends.
- I airbnb’d few places and I think neighbourhoods in the vicinity of the Golden Gate Park have the best price/performance factor.
- I felt in love with San Francisco in 5 minutes — vibrant, great food and weather, people are very open and positive. There are 5 startup events every day and offices of tech giants seem to be more frequent than Starbucks cafes.
- All that glitters is not gold. There many people monetizing the Silicon valley brand — accelerators, hacker houses, events. Rule I’ve evolved in 4 or 5 weeks: Do not touch anything that has Silicon Valley in its name or tag line. It’s probably a bullshit.
- Meeting people I already knew helped me a lot — basic introduction to culture, places and people was a great starting point that saved a lot of time.
- Few things you should learn from American founders (especially when trying to raise money and move company to US):
a) Your company should aim for US (ideally global) market if you want to raise money in the US. It’s quite hard for US investor to validate the opportunity on European or Asian market and there are enough global startups not to compromise on that. They will also bring less value in case you don’t target US market.
b) Be ready to move to Bay Area. There are many startups in the Bay Area so investors don’t feel like travelling even to L.A. for a board meeting. Not speaking about London. Your spouse will probably get visa that don’t allow a full time job, the lifestyle is expensive, public sector works worse than in EU (subjective opinion) and the culture is different. It will be much harder to manage your team if it’s in Europe or Asia. At least one of founders will have to make a serious lifestyle decision.
b) Go big or go home. If your company hopes to make $20M in revenues one day then you are in the same category as local burrito business on Silicon Valley scale. Most companies we Europeans call startups are referred to as a “lifestyle businesses” in Silicon Valley.
c) Timing matters. I’ve never been thinking about the timing of the business idea until I heard so many US investors asking “Why your idea wouldn’t take off five years ago?” and “Why it’d be too late to start in 2020?”
d) Team matters. But you’re not the only one who is already 22 and has not sold a single company yet :) We Europeans tend to be too realistic. Use your charisma and make your story sexy.
e) Nationality doesn’t matter, culture does. Work on your accent, learn to make simple presentations, be positive.
f) Keep things simple. Innovate on product, not on company lifecycle, structure or accounting. Be clear on you’ve achieved to date (e.g. market research -> FFF round -> prototype -> angel round -> product & validation) and what you need (e.g. $3M seed round to develop monetization strategy and a sales team to raise A round later on). Also if possible have your IP already transferred to US legal entity with all paperwork in order (shareholders, IP, employees, customers). Americans don’t like complicated things, especially investors. And they’re right. Would you pour $3M in legal entity based in a country you don’t know with nontransparent structure, previous funding from european government and team that wants to live in Europe?
g) Build your network, listen to others, be coachable and don’t be an asshole. This usually helps in many geographical locations :) But I’ve never seen such a strong culture of help and building connections fast before I visited the Bay Area. Ask for recommendations!
9. Don’t forget to enjoy your stay, there are so many cool places in San Francisco! I made a trip to L.A., San Diego (what a city!) Las Vegas, Gran Canyon and Yosemithe which was just amazing.
If you have anything to add feel free to share your experience in comments!