Top 7 Deadly Mistakes Companies Make When Going to the Silicon Valley
I hope avoiding these mistakes will help you reach your startup goals faster!
I have spent one year and a half in the Silicon Valley developing a French company. My goal was to establish and develop the company’s operations on the continent from Palo Alto. I was also sent to co-develop a hardware product with a local company.
I’ve been incredibly lucky to be given such an exciting challenge.
For many, the Silicon Valley is a dream: technological advancements and opportunities in a magical scenery.
Aside from that and as usual, I wasn’t sure about what to expect.
Particularly because the French and American cultures are so drastically different. It’s funny how speaking english and watching American TV shows can be misleading. It makes you feel acquainted to the culture… Until you really move there and live the American life.
Additionally, the way business is done on the west coast is different from the way it’s done on the east coast.
And then, there is the Silicon Valley. That part of the world that seems unreal, where all the dreams come true if you work hard enough. Where money and ideas flow and cars already drive by themselves (prototypes, but still).
Going there is both enriching and inspiring. I’ve met with entrepreneurs and talents from all around the world. They all come determined and excited about the good things they can take out of there. Just like me.
Things go fast in the Silicon Valley and you’d better be prepared.
In that regard, here are a few common mistakes companies make. Feel free to share your personal opinion and experience at the end of the article!
Mistake #1- They don’t invest enough
The Valley is super competitive, cash is flowing and Americans use credit a lot. They are generally okay with using as much credit as they can until they get what they want. France would tend to be the opposite: credit scares us a lot. As a result, local competitors have millions to spend on marketing, tools and talents. Sure, you can always be smart about your use of resources and do some growth hacking but still. To be in the race you will need to invest the way Americans invest. Do so as soon as you can. It’s USA after all. You can’t go to the Silicon Valley half way and there are no excuses.
This is the American dream so it’s assumed that smart people find their ways to get money to get a seat at the table.
Mistake #2- They fail to adjust their ambitions
It’s funny because in so many other places, having the ambition to change the world means you’re arrogant or stupid. Most likely, you’re both at the same time. The Silicon Valley is different and I love it for that. Ambition is key to the Valley’s mindset. It also implies they tend to take more risk. You don’t want to change the world? Then don’t step there or it will become an expensive loss for you. You won’t be taken seriously either. This is a place where no one wants average or standing stills. Ambition is appraised, not despised or mocked. Everyone there is looking for excellence and growth.
If your plan is not to become a unicorn, it’s going to be hard to surround yourself and to make it a worthy investment.
The area is too expensive for that.
Mistake #3- They mess up with hiring
There’s a debate about whether America produces enough STEM graduates or not. Whether this is true or not, no one can argue with the fact that there are a lot of engineers from abroad in the Bay area. These foreign workers need to be highly specialized to get a visa. Besides, there are Stanford and Berkeley talents all around the place. As a result, the Silicon Valley is a pole of excellence.
It’s no secret that one can only win technological battles by starting with hiring the very best brains.
It drives the costs of specialized tech people to go up, almost like a bubble. Imagine paying a freshly graduate bachelor engineer 120 000$/year on his very first job? In comparison in France, the overall average salary is 56 000$* for engineers with a master’s degree.
As a result, retaining talents ends up being one of the biggest challenges for startups. Employees there are super well treated as they are super demanded and expensive. Hiring strategies and organizational structures overseas have to be adjusted accordingly.
*Source: Glassdoor 2017
Mistake #4- They choose the wrong spot to live in
To me, it was important to live in the Silicon Valley, not just close to the valley. It’s true that housing in the area is extremely expensive.
I’ve seen tents planted in a backyard for 25$/night on Airbnb. In Hacker houses and on high season, the price for a bunkbed in a bedroom with 5 strangers reached up to 1500$/month. The Valley is crazy expensive and there are good reasons for that.
But where you live defines which circle you belong to and things go very fast. If you spend 4 hours a day in the traffic you’ll miss tons of opportunities.
To give you a brief and rough overview per industry, the North Bay is more software oriented. As you go south all the way down to San Jose, it gets more hardware specialized. South Bay is like the epicenter of the semiconductor industry. VCs tend to live around Palo Alto and work in Sandhill Road. That position is strategical to easily access north, south and east bay. It’s also close to the airport. Finally, East bay is populated with manufacturing plants and other capital intensive companies.
Again, traffic is a nightmare in the Bay so choose your spot wisely. Things move around fast and meetings can be scheduled on short notice.
You need to have the freedom to meet spontaneously with people.
If you really can’t, it’s not the end of the World. But beware of missing opportunities and productivity.
Mistake #5- They fail to identify relevant clusters
I wish I learned that earlier in the process and benefited from belonging to more clusters. Because of competition and different lifestyles, people tend to gather around “tribes”. If you belong to one or several of them, you will be more supported by their community members. It’s plain simple and sociological. Yet this is a well-known fact that I may have underestimated. For example, University alumni networks are very important. You simply have much more chances to be backed by a VC who went to Stanford if you studied there too.
Another example would be the cultural “mafias”. Like any place on earth, people tend to gather around common cultural behaviors. It’s about sharing the same references, speaking the same native language and so on.
Many times, that leads to unconscious bias when it comes to choosing who you are going to make business with.
I won’t go over all the different types of clusters but you get the idea. You need to identify your own clusters and find the people you have the most in common with. Get involved in these communities. For instance, I created a Meetup group for people working with radio frequency technologies. It brought me opportunities and leverage in my space and beyond.
Examples of other “clusters”: Digital nomads, hackers, artists, the Paypal mafia ;), Software people, Middleware people, Hardware people, VC circles, locals who grew up there and who don’t work in tech, local hippies who don’t work in tech (Haight-Ashbury street style), tech american founders, foreign tech founders, Hacker house communities, students, researchers,…
Mistake #6- They ignore cultural differences
Here are a few findings that I learned the hard way.
Marketing and sales technics
Marketing and sales technics are more pushy in USA than in many other countries. Americans are used to it and they tend to master pitching techniques. Some techniques would even be culturally less accepted in France. On the other hand, French methods could be considered dull and effortless in USA. In addition, efficient techniques are based on people’s psychology. The later is deeply rooted in our cultural heritage.
Mind the gap when doing sales and business development.
Observe, learn and replicate the best technics. You will be fine.
Americans tend to be more optimistic
They think that anything is possible, which seems definitely true in the Valley. They are confident with the fact that they will succeed.
There’s no room for doubts so “fake it until you become it”.
Hesitation is known to slow people down. It also makes you less convincing.
Specifically in the area, it is a common belief that you can achieve absolutely anything if you set your mind to it.
No matter where you come from. So be optimistic and share the word. Whenever you face complicated requests, get the deal and improvise until you deliver. If you don’t deliver, you can always apologize and make up for it.
In contrast, it’s different in France. You could very well say “we’ll see what we can do” and only commit after validating the feasibility of the project. Partially because failure is not culturally accepted yet. Although the startup world now seems to adopt a different style in France and elsewhere. That’s a good thing.
Business meetings observe a different structure
You can be pushy there too. It’s better to start a business discussion with your potential agenda and expected outcomes. In contrast, some cultures appreciate non business related talks before getting to the point. Being aware of that fact may save you time.
Tastes and uses are different
No matter what you are building, it has to be plug and play. Think of how beautifully Steve Jobs cracked that case. He even set the bar higher for user experience across industries.
The simpler and faster, the better.
Americans are generally super impatients as they can have everything they need straight away with services like Amazon Prime or Doordash. That’s challenging when you work with complex technologies which require heavy documentation (ex: RFID). But there’s no way around ease of use. This goes with exceptional customer support too. In a way, it forces you to be more agile. Keep in mind that less is more.
Relationship to rules and compliance
Who doesn’t know that suing is very common in USA? You may have heard of “funny” stories about cats in microwave disclaimers.
Rules are followed religiously, except for those who don’t care because they can afford super talented lawyers. American administration is stiff and you need to comply.
Make sure you are surrounded by legal specialists, it’s worth the investment.
That kind of regrets cost a lot of money in USA.
Appearances: understand dress code conventions
The dress code in the Bay is super relaxed and “tech hype”. Your style defines your job and lifestyle. Hoodies and jeans mean you’re technical. Shirt and jeans is more VCs style. Sales are kind of in between. Marketing and design have room for a little more originality in the spirit of minimalism.
Suits don’t work too well in the tech space in the San Francisco Bay.
It’s funny because at some point, you can even guess someone’s job and city based on gesture and the way he/she dresses. It’s striking in the area. Of course, it’s up to you to follow dress code conventions but it comes handy to be able to read through and adapt.
Mistake #7 — They stay in their confort zone
Once you find the clusters you belong to, it’s time to look for the people that are completely different than you. Learn from them, share with them, confront your perspectives. Make new extraordinary friends… That’s how people create and innovate. Meet as many people as you can.
Diversity is a great catalyst for innovation and ideas.
Particularly, you can get in touch with anyone in the Silicon Valley. So be bold and go for it because you have nothing to loose. Doors are open and it’s only up to you to make a good use of the twenty minutes you will be given at a Starbucks coffee.
There are tons of opportunities to meet incredible people. Countless tech events, community activities, parties (aside from the scandalous ones you may have heard of), private business clubs, opportunities to speak at conventions, University conferences,… Mix with different people! Take off your blinders or you will miss the big picture…
Now jump in!
Avoiding these mistakes should help you find the shortest way to achieve your goals.
Besides, the Valley is paradoxically both formatted in a way, and a paradise for outliers and dreamers in another.
It’s your dreamland if you are okay with tough competition and high ambitions.
That’s the way things are there. It doesn’t mean it’s the best and only way, but it’s definitely a fascinating one. On a personal note, I even felt a cultural shock when I moved back to Paris. I miss the Silicon Valley’s high and vibe.
There are tons of resources about the Silicon Valley’s good and bad sides. I strongly recommend you explore some of them.
That being said, nothing replaces experience on the ground.
It’s definitely worth going there at least once to truly understand what it’s all about.
Enjoy the ride, I hope you’ll tell me news about it!
I hope this article will help you, feel free to give me 50 claps and follow me if you enjoyed it, thank you!