For most entrepreneurs, the allure and promise of Silicon Valley is akin to aspiring actors and the allure of Hollywood: if they can just get there, magical things will happen. Indeed, Silicon Valley has much to offer budding startups: mentors, seed investors, researchers, customers, and brilliant workers all converge in one relatively small area that gives more opportunity than anywhere else. Startups and young businesses require a lot of help. Silicon Valley is attractive to so many because it is uniquely situated to give the help that these startups need. The mixture of experience, service providers, market and opportunity make the region ideal to start a business. However, many entrepreneurs mistakenly think that if they simply show up with their idea, the opportunity will land in their lap. Starting a business takes grit, perseverance, and incredible amounts of work, and visiting Silicon Valley does not bypass this. We brought in Valley veteran Jonathan Baer from Threshold Ventures to talk to our recent class at one of our Incubator bootcamps. Here are some tips from Jonathan for successfully navigating business and understanding the culture in the Valley.
Silicon Valley is Constantly Changing
As a hub of innovation and efficiency, it is necessary to keep up with the fast pace. There are constantly different investors, mindsets, and ideas. What worked 6 months ago might not work now, so keep a pulse on the Valley. Doing business in Silicon Valley means constantly being there. It takes more than 1-2 weeks a year to keep up, so live or spend significant amounts of time there. Finding where investors put their money, what customers buy and how to recruit people in Silicon Valley means actually being there. There is no way around it: if you want to do well, you need to be in the Valley.
The Standard is High
Startups that are successful are not so different than you: you can compete. The competition is fierce and opportunities do not come twice, though, so prepare yourself. Understand and have a great presentation on hand for whatever time may be allotted to you and know what is expected of you. Take the time to understand your market and competition in order to find the best people. Look at your business from every angle and bounce ideas off of others to have knowledgeable answers for whoever asks. It quickly shows if you haven’t done your homework about your startup. Although you may have the same intelligence as the wildly successful entrepreneurs, you must prepare to achieve that same level. The standard is high in Silicon Valley: prepare to meet the challenge.
Silicon Valley Views the World Differently
The key to communication in the Valley is transparency and brevity. This culture of being succinct and to-the-point pervades every aspect of life, even at cocktail parties. Potential investors want to know what you do and all there is to know about your business. And they want to know in about one minute. Sometimes referred to as “the elevator pitch”, it requires that you give a lot of information without fluff. Although it can sometimes come across as rude, people in Silicon Valley, especially the successful, have short attention spans. They need to get a snapshot of your business and an overall view quickly. The most valuable resource in Silicon Valley is time, so respect what anyone gives you by getting to the point. This is hard for many entrepreneurs. They are too close to their businesses and the natural inclination when someone doesn’t understand is to say more. However, the challenge is to say less and word it better instead. This is where preparation is paramount. Think through every word carefully and understand who you are speaking to and their motivation. In order to succeed, you must be effective in summarizing your business. Communication is the life-blood of any business. Learn how to use the least amount of words to effectively express yourself in order to survive in Silicon Valley.
Networking is the Secret to Success
This is why Silicon Valley works. The ability to connect with the right people is what makes it full of opportunity, but it will not just come to you. Engage, engage, engage! Go to pitch competition, events and anywhere you are invited. You cannot meet the right people if you are not meeting people. This is yet another reason why spending time in Silicon Valley is key if you plan to do business there. Real connections are hard to make and maintain in 1-2 week visits. Gaining traction, raising capital and building partnerships takes time, so plan on spending significant portions of time there. For most people, networking is a learned skill. Meeting new people, navigating parties, and starting a conversation may not come naturally, but they are all essential to succeeding. The best way to learn is by practicing. Think about what to say, take every opportunity, and constantly put yourself out there to get used to it. Mentorship is a vital resource in the Valley. Spearheading a company is a lonely venture and someone that can help you navigate is essential for starting a company. Find someone that you value and trust to bounce ideas off of and get advice. They can help you hone your ideas and, just as importantly, execute your vision. Another component to success in the Valley is reciprocity. Although there are many who are willing to help a new start-up, that does not mean everything is free. There is an underlying culture of quid pro quo and reciprocating favors is an important part of networking. Depending on the amount of work someone does, anything from cash to a simple thank you is expected. In order to build a good reputation, be sure to thank the people that helped you succeed.
Your Business Is More than Your Idea
It takes more than a great idea to succeed in Silicon Valley: you need to persevere, work hard, and problem-solve. It takes initiative, time and the right environment in order to make your idea happen. This why many entrepreneurs fail. In a successful business, money is the last thing that you need. If you have a great product, understand your market, and have mentors, then raising money will come relatively easier. Silicon Valley has more than just money to offer startups, so take advantage of all the opportunities. Being an entrepreneur is hard work, but just because it is hard does not mean that it is wrong. If it were easy, then everyone would do it and succeed! However, there are endless opportunities and rich rewards for those who are willing to do the work in Silicon Valley. Jonathan Baer is an author of “Decoding Silicon Valley: The Insider’s Guide” and Managing partner of Threshold Ventures, in Silicon Valley. Check out his book here and a highlight video of his talk here. If you would like to learn more about the Envestnet | Yodlee Incubator, visit our website here or check out the highlights for this year’s program here. If you’re an entrepreneur with an idea to leverage financial transaction data, applications for our next cohort are now open. You can apply here. Applications close September 14th, 2018 for the class beginning in January 2019.