Want to start a company in Silicon Valley? Don’t do what I did (the first time)

by Steli Efti
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Every year, hundreds of startup founders move to Silicon Valley. But even if you’ve had success elsewhere, it’s a risky move.

This place can be hard on entrepreneurs, which is why more established founders get questions like:

“How did you make it?”

“How can I make it?”

“When should I make the move?”

There are plenty of answers to these questions—and they’re different for every situation—but after a decade in Silicon Valley, I’ve identified a couple paths to startup success.

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Let’s start with the worst idea

Grind through the pain.

This is the slowest and dumbest way to make it in Silicon Valley. I’ve discussed the struggles of my first startup in previous posts, so you know the story of how I sold everything I owned, bought a one-way-ticket to the U.S., and just showed up—by the end, I was emotionally, spiritually, and financially bankrupt. I survived only because I was stubborn enough to stick around. But startups don’t have to be that painful.

So why is it so difficult to start a company in Silicon Valley?

Because you don’t have a network. You don’t know where to find the best engineers, cofounders, and investors.

It’s easy to meet people in Silicon Valley, but it’s difficult to find the right team.

Building relationships takes time. The A-level talent starts companies or they’re recruited by rocketship startups. The B-level talent usually jumps on with larger, more established companies, so it’s difficult to land them, too. Which means you’re often left with C-level talent—future rock stars who are years away from their peak.

What do most founders do in this situation?

They build a team of C-level talent that can’t quite compete at the highest level. As a result, the company struggles to create killer products, gain traction, and raise money. And after a period of limited progress, the founders give up. They return to wherever they lived before moving to Silicon Valley.

Why did my next startup succeed?

Because I established meaningful relationships during those first five years in Silicon Valley. I built a network. I connected with engineers, investors, and my eventual co-founders—I met Anthony the first week I arrived in April 2007. We were friends for five years before founding the company we’re running today. In fact, all the founding members of Close.io are people I’d known for years before we worked together.

I know what you’re thinking...

Steli, I don’t want to struggle for five years to find the right team.

I hear you. It sucked.

So let’s go over a couple ways that entrepreneurs can find success in Silicon Valley more quickly than I did.

Join another startup first

Work with someone else for a year or two. It’s a short detour, but can really set you up for the future.

Look for a growing startup—25–30 people, well-funded, great traction, A+ founding team. When you approach them, say: “I’m ready to do whatever it takes to help you for the next two years, and then I want to start my own company.” Just be honest and transparent. The key is to put your ego aside. I know it’s hard to do—I probably wouldn’t have taken this advice ten years ago—but working for someone else can help you become a better founder.

Work your ass off, learn how to build a startup, and establish strong co-working relationships. There’s a good chance you’ll find your future co-founders and investors at this company. When the time is right, use these connections to launch your startup.

There are plenty of ways to set this plan into action

For example, I know a European founder who planned to move to Silicon Valley, but changed paths when an opportunity presented itself. Here’s what happened:

A unicorn startup wanted to open an office in Europe, so he made a deal with them. He’d open their new office and, in return, work closely with the leadership team in Silicon Valley. He was incredibly transparent throughout this process—he’d visit the U.S. regularly for work and, in a couple years, move to San Francisco to start his own company.

And that’s exactly what he did. After a few years, he took a few people from the European office, moved to Silicon Valley, and launched his company with the help of that unicorn startup. Because of his pedigree and his network, he was set up for success.

If you’re not ready to move to Silicon Valley, start building your network anyway

Use this time to make connections, so that you won’t have to rely on C-level talent when you arrive.

I know a founder from Berlin who used to visit Silicon Valley every few months. He’d spend a week or two here and meet with tons of people. Over time, he established strong relationships and a solid reputation.

He knew his company would have some appeal in the U.S., so he started selling to a few prospects every time he visited. After some success, he hired one of his friends to head up business development in Silicon Valley. As the company grew, they hired a bunch of people and opened a massive sales and marketing office in San Francisco, while their developer office remained in Europe. For three or four years, he made use of every single visit. And that’s why he’s crushing it today.

What’s the takeaway?

If you want to succeed in Silicon Valley, don’t follow my lead. Instead, spend time building your network, whether you come out here to work for someone else or you visit frequently.

When you make the right connections, you’ll attract more A-level co-founders, team members, and investors. Those are the people you’re really going to need to succeed.

 

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