This is the first post of a series named “Enter Silicon Valley“. It is about how you as an outsider Entrepreneur, can get your startup in one of the high tech communities, find funding and grow your company.
So you reached a point where you realize your local fuel will not send your startup to space and beyond. You really believe in your startup and are willing and determined to do whatever it takes to make it a success. You have to get to a more fertile ground, but you really know nobody there and have no connections.
I am in this exact situation, i will try to write down a complete multi-part how-to, in hopes of saving you time that i wasted. We will use Silicon Valley (SV) as the target community as it’s the most condensed and accelerated community in the world.
In the beginning…
Choosing the right time to move your startup to SV is of critical importance. Think about the advantage you gain by working at a very low budget while you arein your hometown. On the other hand if you delay a little longer, waiting for your
valuation traction to rise, you could become irrelevant by an unknown competitor who is already positioned in SV, well funded and resourced.
A trip to SV will require at least three months of preparation, the first month requiring 10% of your productive time, up to 80% for the last month. In this post we will focus on the first month. Your final decision to move your startup should be taken in the second month, so you can start preparing right now!
Why three months? The amount of information you are about to get exposed to, is immense. Today you can find so much high quality advice out there, that you will be overwhelmed. You need to give yourself time to digest the information and grasp the basic concepts. You don’t want to waste time doing that while you are in SV and the bill is running.
Try not to take any funding. If you intend on going to SV, it would be highly advisable to have a clean sheet. It’s a wise choice to want to get funded by professional investors, who are in the same geography as you. Giving 10%-25% of your equity to local investors, may cause you serious issues of dilution and problems trying to collect all the signatures. Think about your end-game, the road to an acquisition or IPO will require many funding rounds. Preserve your equity for investors that will have real impact on your company, don’t just take money, you don’t really need it.
Silicon Valley is not the only thriving high tech community. Although it is by far the largest and most active, you can also find very fertile land for your internet startup on Boulder CO, New York, Houston TX, Seattle, Boston and a few more… In this amazing infographic Om Malik (gigaOM) gives a visual representation of the relevant sizes between the communities in terms of funds invested.
Choosing the right home for your startup is very important. You have to think about your position, the technology you are into, the market you are targeting and the kind of resources you will need. Understanding the play-field will allow you to know where you want to go and why.
The first month – Easy start
Podcasts galore. In the first month you should subscribe to two amazing podcasts. Jason Calacanis‘ This Week In Startups and Mark Suster’s This Week In Venture Capital. They are such a phenomenal resource of information! And they are so fresh i don’t think their importance has been fully realized yet. Personally i prefer Suster’s podcast as he has more potent information about the things that matter, while Calacanis is a bit more like Colbert (that would make Suster John :)).
Download all the podcasts on your device (get the audio / no-video versions) and start listening to them wherever you are. I listened while walking, eating, in transit, everywhere. What you should be looking for are the insignificant rants and raves that are mentioned in their interviews. Things like anecdotal stories, which law firms are in play, who each guest praises, what startups they like, the tools that they use…
Keep notes! Don’t forget that this is a study, treat it as such. I had to listen to all the podcasts twice, or more, so i could keep notes. Don’t waste your time like i did, when you hear something that is worth noting, pause, exit, and e-mail yourself with the note. I find this to be quite practical as the e-mail will remain unread until i archive the information properly.
Bookmark everything! Within a short time you will have to bookmark too many URLs. You will learn about all sort of things, from funding resources, to interesting blogs, to competitors, to events and on… You need to create a bookmark tree structure and be very active with it, restructuring it as your understanding evolves and the information flows in. Do that now! Create your basic folders and subfolders. Doing this successfully and effectively will greatly help you in present and future endeavors.
You need a twitter account. Start following whomever you find interesting in the biz sector you are venturing on. At this point keep your tweet post count to a few per week, lay low until you have a good sense of what goes and how it goes. Study your twitter feed, understand the relations between people, how waves are formed and propagated and look for soft spots and angles. I will get back to that with a post on how to effectively use twitter and other social media tools for your advantage…
Start preparing your story. Your startup’s arsenal of pitches is a constant work in progress, the sooner you start the further it will evolve. Get out there and collect all the application forms from any startup accelerator / incubator you can find. Lay out the questions in a google document spreadsheet and share it with your team. By the end of the first month you should have answered all of them. Answering these questions will solidify your idea, story and pitch of your startup. You would also have laid the foundation for your next steps of presenting your company. And since you are now ready with your applications, why not apply? Being rejected is also a lesson you have to learn!
Connect with your local community. Attend any events that are likely to gather people you will be interested in and go talk to all of them! Everyone will give you a bit of information that may prove to be very important. A few may even have connections to your desired target community. Get out there and expose yourself.
By the end of the month you should have a good sense of where North and South is in the land of startups, VCs and the industry in general. From the interviews you listened to and your research you should have also picked a few people you really liked. These people are very important to you as they are your first bearing on your next steps.
Note that none of the above actions should alter your main focus, working maniacally on your prototype. [full stop]
In the next post of the “Enter Silicon Valley” series, i’ll get into the second month, preparing your presentations, perfecting your pitch and taking the final decision.