Sexy Silicon Valley

Privileged (!!) to be part of the Silicon Valley’s Startup Ecosystem …. That’s how I feel! Every week, while having the chance to get things done one challenge at a time, Silicon Valley molds and shapes our entrepreneurial learning curve in real-time. In global turbulent phases, like right now, where many traditional corporations’ shareholder values are trending downwards and entire continents are challenged by their dusty legacies, never before have innovations, startup abilities and entrepreneurial skill sets been so essential for humanity. Hence, Silicon Valley’s Entrepreneurial Environment has become a magnet for the world. While those who live here take it for granted, millions of people around the world ask themselves how to step into & learn from “Innovation Valley”!

“Lufthansa flight 458 from Munich to San Francisco is ready for departure!” It was the beginning of 2011; my two boys, my wife and I were sitting in an airplane — leaving behind our comfort zone to move to San Francisco’s Bay Area for good. I will never forget this moment in an Airbus 340 heading in a direction where I “don’t know what is going to happen”.

David and Samuel — my kids — were acting just like when we usually departed for a family vacation. My wife Zenaidy was having fun with them, while I was observing the scene of them spreading love through the air in slow motion. “What are you doing, Tommaso? Where are you going? Are you sure about doing what you are doing?

Leaving a place, and its language, mentality and legislation that you understand, where you have built your business network, where you have your friends and your family, is not that easy. I had already done that in my teenage years when moving from Italy to Germany — but now with my family — years later — it was different. What I learned from my first move was that you can take your future in your hands rather than letting your destiny decide what happens to you. And here, we moved again!

“Keep the faith — and all will be good…” That’s what I told myself before the plane took off. Without knowing anybody, without being part of a global multinational, neither of a startup program (incubators were less prominent back then) — that’s how we got to Silicon Valley!

Almost 5 years of Silicon Valley Lessons Learned later, a couple of non-Silicon Valley entrepreneurs in a class I hold at one of the accelerators I mentor, asked me to share key insights on how to make the move and what to expect.

Smart move

In the Tech Business in Silicon Valley (next abbreviated as “SV”), there are mainly two different Non-Silicon Valley (next referenced as “N-SV”) groups, aside from students. The ones who came over sponsored by a corporation, and the others who came over on their own. Those who come over via a multinational must acclimate to the weather and the jet lag … maybe the food, and the rest is usually handled by the corporation who shipped them over. The ones who come over on their own have to manage ahead of time things like i) Their Visa ii) The relocation from their current location and to SV iii) All things needed to be integrated — meaning things one has to solve once in Silicon Valley such as set up a business, establish a new network from scratch; all these activities result in a — not to be underestimated — increased cash burn rate.

Especially if you plan on coming over with kids — things are highly more challenging as you have to plug into the school system, while considering the area you plan to live in. Of course — private schools are always an option — if one is used to tuitions.

AFTERMATH

Now, even if you can afford coming over on your own — I suggest joining a company to make the move. The main reason for that is that things over here work differently. Even though you think you know things, once here — your learning curve goes hockey stick — and you move from one experience to the next one … from one great connection to the other … while this all takes A LOT of time — and time is money! Remember, what you have on paper as a plan has so many unknown components that for sure are going to cost you more effort and time than you expected.

It’s not about having an idea

“Great idea — and let me know down the line how things are going!” Silicon Valley is not a magnet because people around here have ideas. Actually — ideas around here have no value. I can imagine you right now having a big question on your face asking what I mean by that — as obviously SV is known for B_I_G ideas. Well, let me clarify that it’s not the idea being great … or the fact of having “just a great idea”, but it’s about the ability to make the idea come to life, while being humble enough to shape the initial idea towards something that a loooot of people are going to use. One hears often many N-SV people say they are not telling what they are working on because someone can steal “the idea”. It’s not about the idea in Silicon Valley — but the endurance that leads to the realization of that vision. Results “down the line” that validate your vision are what matters.

AFTERMATH

Before making the move, be aware of dos and don’ts. Asking for NDAs to reveal ideas — or talking about things you might want to do when “grown up” — is too much BS. Roll out your startup plan: 1) Get a Team 2) Prototype 3) Customer Discovery 4) MVP 5) Traction 6) Fundraising 7) Growth & 8) Exit. If you are not capable of this — join a startup — which in any case should be a must-have experience before starting things up in Silicon Valley.

Change in real-time

Tech innovation is the result of continuous adjustments. This statement implies ongoing efforts from engineers. Outside Silicon Valley, where fundraising mindsets are rare, businesses are built upon revenues from the beginning, hence technology business is less the focus. As a result, engineers have more of a service provider role towards business people that drive revenue. In other words — doing business outside SV relies more on a “hustler” role, than a “hacker”.

However, in Silicon Valley it’s the other way round! Engineers are the innovators — and, as such, fundamental for all startups. Therefore, if you are NOT an engineer but a business startup guy who is planning to make the move to Silicon Valley — you need to transform your “revenue driven” business mentality towards a “product centric” approach. Making revenue is the result of customers using a product that solves a main problem they couldn’t handle otherwise. To do so you need to live product experience, design and technology. In any case, you need to go more than hand in hand with engineers, who are core to any tech business. And for the record, 90% of all investors don’t put money in a startup whose culture is revenue driven first — and not product driven!

AFTERMATH

This is something many N-SV people understand only slowly … years later. What you are reading is not just another piece of advice, but CRUCIAL to your endeavor in Silicon Valley! It’s what everybody knows and nobody talks about because it’s obvious … for those who live here — but not to newcomers. This means, if you are an engineer — awesome … (!!) … but if you are a business person with no product / coding ability — expect huge walls, increased rejections and poor results. You either change — or you’ve lost the battle before even starting.

Billions of cash

Forbes Magazine wrote this March that California does not only have more billionaires than any other U.S. state, but also tops Germany, India, Russia and the UK. In fact, if California were a country, it would be home to the third-highest number of billionaires in the world, surpassed only by the United States (which has 541) and China (which has 223). California’s billionaires own a combined $560.1 billion in wealth, which is more than the GDP of 49 countries, including Argentina, Poland and Taiwan.

Katia Savchuk at Forbes wrote further, that half of California’s billionaires live in the Bay Area and Silicon Valley. San Francisco itself is home to 26 of them, and Los Angeles to 22. Not surprisingly, more than a third of the Golden State’s wealthiest entrepreneurs made their money in the tech industry.

Interesting enough is that this kind of news, for Non-SV folks thinking of making the move to SV, nurtures the understanding that Silicon Valley money is just waiting for newcomers to pick it up. The reality is, that nobody here is waiting for anybody — especially not for somebody that comes from a different country and who, before doing things in Silicon Valley, needs to eat a lot of sh@*! before understanding how things work.

Further, the amount of “competition” in Tech-Mekka is huge. And competition here doesn’t necessarily mean other folks doing similar things — but it refers to the amount of sexy deals that an investor can select from. In order to raise money in SV you have to transform yourself and your business — according to local rules first.

AFTERMATH

When it comes to raising money, investors are not throwing it out there just because it’s called venture money — but they mitigate their investment risks by validating a tech-centered team that i) breathes Silicon Valley and knows how things work here, and ii) Have a product (not an idea) with initial traction primarily in the USA.

Rethink the definition of opportunity

Nobody can predict what’s going to happen in the future — but one can get a sense of its probability compared to what others have done who did similar things. According to The Huffington Post, there are 500,000 new startups every year. Only half of them make it through the first year of business. And only 5%, or 25,000 of them, have a successful exit. In other words, the chances of succeeding with a tech startup are marginal. Add to this consideration the fact that Silicon Valley newcomers have to learn a lot before acting in a proper Silicon Valley manner — the chances are even less.

I’m not saying you shouldn’t go for it — but what I’m sharing are lessons learned which, for most of you, will save a lot of time, and encouraging you to do things smarter by rethinking what defines “an opportunity”.

An “opportunity” is that thing with a higher “probability of success” within a “shorter period of time” — which implies a “smaller risk” compared to another thing.

Sounds complicated — but it isn’t. Before making the move to Silicon Valley, I advise every entrepreneur to consider:

1. that just because one is not local — business will take longer
2. because English translation doesn’t reflect interpretation — misunderstandings will happen

Hence, many should consider plugging in to an existing startup with local founders and learn on the journey with others that have riper opportunities. One hereby increases “the probability of success” — within “a shorter period” of time — while running “smaller risks”.

Of course — there are exceptions to any rule … but please, don’t be naive and make your plan of moving to Silicon Valley based on you being the exception!

TAKEAWAY

• Get sponsored by a multinational
• Stop having just an idea and execute your vision
• Making $ is a result of a stunning product
• Fundraising in Silicon Valley is an art that must be learned
• Opportunities are all over — consider validating that first

Click the share button below and make this information available to your network too! Follow my Blog “What it takes” . YOU ARE AWESOME!

Originally published at whatittak.es.