This summer I am on a road trip through California with my family. I have always been intrigued by the entrepreneurial spirit of Silicon Valley and over the last week I have had the privilege to meet a wide variety of people that are working in the Valley, ranging from the Vice President of LinkedIn to a Berkeley PhD candidate, from the Founder of the Kairos Society to a Product Manager of Google. This article describes the 8 things I learned about Silicon Valley.
LinkedIn, the world’s biggest social network for professionals, has around 10.000 employees. 4.ooo to build the product, 5.000 to sell the product and 1.000 support staff. James Morgensen, VP of workplace services, is responsible for the office spaces of LinkedIn globally. His main objective is to create an office environment where the employees can thrive. To do so, he hired a famous corporate chef, built gaming areas, provided bycicles, chose vibrant music in the dining area and made sure that all offices are adapted to local cultures.
SoundFocus is a Y Combinator backed start-up that is building a new hardware product that delivers amazing sound, tailored to you. Read more about them in this article: “SoundFocus raises $1.7M to adjust music to the way you hear”. Natalia has taught me that the Y Combinator program of Paul Graham is a great kickstart for any start-up. Basically, what Y Combinator does — it teaches entrepreneurs how to build a better product, to find the best product market fit for your product. And yes, a fair amount of companies get funded once they graduate from the program, but raising money is a byproduct. In fact, Y Combinator doesn’t teach you necessarily how to raise money, but gives you entrepreneurial advice how to build a better company. Getting there is very competitive, and it’s a very intense three-month program for entrepreneurs, but if you’re serious about your startup and really want to take it to the next level, Y Combinator is one of the good ways that can take you there.
David, a Dutch entrepreneur, who was listed in the “Forbes 30 under 30” in 2015, knows his way in The Valley. He currently serves as the COO of Humin, a well-funded start-up with around 30 employees. They are building an app with the mission to help the world communicate in a more human way. Humin has attracted a group of investors with a wide variety of backgrounds that allows Humin to enter the US, the UK and European continent.
Lesson 4: Make sure engineers build products that users actually need
Laurens, ex McKinsey consultant and currently Product Manager at Google, has told me that engineers love solving complex technical problems. This does not always reflect what users actually need. He taught me that it is important to closely collaborate with engineers, and be the voice of your user to make sure the final product will have a good fit with the market. For more info on the job of Laurens, read the following article: “Product Managers: Who are these ‘mini-CEOs’ and what do they do?”
Willem-Jan van Loon is the Founder & CEO of innovative 3D printing company Save Your Print. SYP enables 3D printing through secure streaming of higher quality files to every 3D printer worldwide with only one click. He is in Silicon Valley to raise capital for his promising start-up. To reduce the costs of his trip, he is sleeping in a 17-person hacker’s house for $30 a night. For more info, check out the website of Coliving Club.
Rab is one of the Founders of Altitude, a stealth start-up that is creating the next generation of identity, where “repetitive processes move to the background and your surroundings move to your beat”. We talked about capital raising in Silicon Valley and how it is different from other technology and financial hubs in other parts of the world. The process in Silicon Valley is much more structured, focused and based on deeper first hand experience. Larger and well known investors in the Bay Area are typically very focused on what stage and the types if deals they will invest in. Although most seem to have a black list rather than a white list, even if they may not admit that. Rab told me that you cannot go to a fund that invests in later stage rounds and approach them for a seed investment, for example. Do your research about the investor’s investment thesis and try to get an introduction. Many seed and Series A (check this link to learn more about it) stage startups that come from other parts of the world to raise capital in Silicon Valley underestimate the importance of raising sufficient capital to execute until they achieve the milestones for their next round. If you come to a VC with the request to raise a €100K seed or €1M series A, then they may not even take the meeting. If you raise too little, you may not survive anyway.
Eva is conducting research on entrepreneurship, looking at (1) how the team composition of start-ups relate to future performance and (2) how VCs could assess start-ups teams as part of their investment decision making process. She is currently developing a team assessment tool for VCs and considering whether she wants to turn this into a business her self. She has taught me that the right team composition is key for start-ups to succeed and that 40 year old founders tend to be more succesfull on average than the stereotype 28 year old, high educated, male founder, of which we know so many nowadays.
Thanks to all the people that have been willing to share their insights with me. I hope this article is useful for those people that are interested in doing business and / or raising capital in Silicon Valley.
Should you have any further questions or ideas, please don’t hesitate to contact me at firstname.lastname@example.org and / or +316 66 87 53 53.
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