Everybody you ask will tell you that doing business in Silicon Valley is very different from elsewhere and for sure not easy. Gold seekers have to be prepared for that. The success stories are really nice, but for sure way more initiatives failed. The good thing is that failure is something which is allowed in Silicon Valley. They aim for big success, but in case this seems not to be possible, they prefer to let something fail fast. On the way to success funding is essential to realize a new Google or Facebook out of all those startups available. To let entrepreneurs get used to the climate several startup accelerators are present to mentor the entrepreneurs and help them to bring their product to a global market and to support them in fundraising. During our stay in Silicon Valley we learned a lot about it.
Welcome to the Blackbox Mansion
Startup accelerators seem to be the key to success for many startups. Of course you could do without, but the services offered by the different accelerators like US Mac and Plug and Play Tech Center we visited earlier, are very useful for entrepreneurs who didn’t visit Silicon Valley before. Blackbox.vc is another accelerator focussing on international entrepreneurs who like to bring their product to a global market. We had the opportunity to visit the Blackbox Mansion and to discuss with its founder Fadi Bishara.
The Blackbox programs guide highly selected startups from all around the globe through setting up US-based business operations, raising capital and recruiting US-based executives.
How European entrepreneurs differ
Fadi Bishara provided us with really good insights in how we European entrepreneurs act in comparison with entrepreneurs in Silicon Valley. We tend to study, plan ahead, anticipate problems (what if it doesn’t work?) and we try to build a perfect product. This is in general a strategy to avoid failure.
Do you know Silicon Valley’s biggest secret? It’s the permission to fail! And because it’s easier to fail where no one knows you, Fadi advises entrepreneurs to leave their hometown, to relocate to a place where they don’t know you.
In Europe we take small steps, because it’s easier to fail small. In the Valley they go all the way. They think big and if needed they fail big. The bigger the failure, the more you learn, but you need to learn!
Ownership aligns long-term interest
In Europe we have in general a limited amount of shareholders within a startup, normally the founder(s). All the employees are earning their individual salary. Especially for a startup this can be very costly.
The model in the US is dramatically different. They focus on making the team co-owners, because your team is your biggest asset. Ownership aligns long-term interest. Vesting is vital. The same applies when venture capitals step in. They don’t want to take a too big share in return. They realize the founders and employees still have to feel they are the owners to make the company a real success. They realize it’s better to have a smaller piece of a huge potential, than owning a huge percentage of a dying business.
Work/life balance is a myth
Fadi also stressed the European aim to find the right work/life balance, which is a MYTH according to him. Life’s purpose is to contribute, to create value. Follow your passion, do what you love. Quit your job, make something, build value, never work again!
Who knows you?
Having a big vision requires getting a lot of help. It’s best to think first about the help you need, instead of thinking about investors. Everybody likes to help. Human beings are wired to help. It’s our nature. Once the idea appears to be a good one, you will find investors on the way.
But finding help is not necessarily easy. We tend to help the people we know, first. And therefore, the more people KNOW you, the more help you will get. It’s neither about what you know nor about who you know. It’s all about WHO KNOWS YOU. This makes meeting people and realising they KNOW you the most important mission for an entrepreneur.
Embrace change, think big, take action, let yourself fail!, learn more. Adapt & take action again. That’s what Fadi calls entrepreneurship.
Life’s a pitch according to Bill Joos
At Blackbox we also had a very inspiring, unfortunately too short, session with Bill Joos of Go To Market Consulting. According to him “Life’s a pitch“, but to achieve your goal, for example pitching in front of a VC or finding a new client, you need to follow a structured approach. The Elevator pitch should trigger the listener and he should say: “Tell me more” before you can continue. In general entrepreneurs are so enthusiastic and confident about their solution, that they are just telling, without knowing whether the other really wants to listen.
Great session with @BillJoos. Better remember not to dilute his scotch.
— Peter Horsten (@PetersOpinion) October 20, 2012
Bill Joos provided us with many useful insights. He managed to share a lot of information, at a very high-speed, in short time. It’s amazing how many words he squeezes into one minute.
Honestly, what he told us is not necessarily new. But like always we tend to forget a lot. He challenged us to summarise our company in four words! Just give it a try yourself. A bit later we were allowed to add three words.
Long = Lazy.
Brief = Hard.
By doing this exercise he challenged us to be short. He claims a good elevator pitch is not the perceived 60 up to 90 seconds, but more like 20 up to 30 seconds. And for that reason Bill repeats all the time: “Long = lazy, brief = hard”.
During a short pitch it’s important to clearly state the pain you plan to solve and who you try to help. We shouldn’t forget about the top benefits of our painkiller of course. This combined with a call to action leads to the “short building” elevator pitch.
Very helpful are the steps Bill presented to get up to the VC or potential client meeting. But what to present then? He presented us the 13 essential slides of a pitch deck to be held in 30 minutes and told us how to prepare them just before he had to catch a plane to Europe where he will be training many entrepreneurs during multiple day seminars. Meeting with Bill was very valuable. It’s a pity we couldn’t practice a bit longer with him.
Disappointed about San Francisco itself
Upfront I heard many positive opinions about San Francisco, but unfortunately, we were not able to verify ourselves. Most of our time we were south of San Francisco. Although San Francisco officially is not a part of Silicon Valley, it hosts many technological and financial organisations.
Our last evening in the Bay Area we managed to visit downtown. Probably we visited the wrong part of the city, but I was not really impressed. I can imagine the waterfront is really nice during the day. And for sure the view on the Golden Gate Bridge has to be magnificent. But due to the evening darkness we didn’t see all of this.
Probably it means I will have to come back some day 🙂
Our stay in Silicon Valley has been very inspiring, I learned a lot. It also made me realize Silicon Valley is not necessarily the Holy Grail for everyone. The focus on multi billion dollar businesses also gave me a bit of a “fake” feeling. How honestly is everybody helping you? Of course I understand everybody wants return on his investment, but how high and how fast does this have to be? Fact is that meeting people and making they know you is most important. So let’s meet a lot of people! I’m really curious how people in Seattle and Chicago will think about this. Soon we will meet with them.
Checkout the other US Mission blog posts.