The Guide to Getting a Base in Silicon Valley for Your European StartupOctober 06, 2010
by Mike Butcher
In what is possibly the best presented and above all realistic exposition I’ve yet seen on what it’s like to extend a European startup into Silicon Valley, Andy McLoughlin, co-founder with Alastair Mitchell, of Huddle, socked it to the crowd at the annual Future of Web Apps London event this week.
“Fighting and Thriving in the Valley” is a step-by-step look at what it’s like to take a startup from outside the Valley – in this case Huddle’s roots in London – and create a footprint in the US via San Francisco. It was an excellent speech. But since Carsonified, the people behind FOWA, have gone down the road of locking down video for the preserve of their paid-for online conferences (as is their right), we haven’t seen any online video of the talk.
However, here’s a point by point run down of Andy’s presentation.
• Andy McLoughlin cofounded Huddle.com (in 2008), Organises DrinkTank events and has spent the last 6 months in San Francisco
• First some perspective: Two years ago the failed Spinvox were the Number 1 startup in the UK. Paul Carr was still drinking. Tweetmeme was a side project from the startup Fav.or.it. Dopplr (later acquired by Nokia) were still growing. A Twitter clone for business (Yammer) won TechCrunch 50. Huddle was a small startup in South London.
• Andy spoke at FOWA in 2008 about attempting to prosper as a startup *outside* the Valley…
• And they have consistently argued that they have everything they need to prosper outside the Valley (Community, Talent, Customers, Money). So why move?
• For Huddle it boiled down to: New US-based VCs, big partners (e.g. LinkedIn), customers and a “strange desire to take on the Americans at their own game”
• But this was never a wholesale move. Andy’s co-founder, product/engineering, marketing and global sales remained in London. Huddle continues to wear the moniker “UK Startup”
• Luckily it’s easy to do business in the US. Kinda.
• Make that: it’s possible. At least, with a team of 12, in SF. Here’s how they did it.
• Ask yourself if you really need to be there – is it worth the time and expense?
• Don’t go in blind – get a flight, immerse yourself in SV culture, meet people, understand where things are physically/geographically
• Events to go to: SF Beta, SF New Tech, Start2Startup Dinners, SuperHappyDevHouse and use Plancast to find the rest
• Useful conversation starters: Angelgate, food/health, great bars and…. the SF obsession with hand sanitizer
• Navigating the Bay Area means you’ll come across hipsters and straight business people in equal measure
• Read Paul Graham on “Where to find Silicon Valley”
• There is a surplus of real estate so it’s easy to find an office
• As well as an office, you’ll need a US entity, register to trade in SF, US banking, Visas, staf & a benefits package for them
• Always incorporate in Delaware, it’s the most flexible form of company
• Use a lawyer (here are suggestions) and Silicon Valley Bank tends to help outside startups
• US banking is tricky, but HSBC Premier accounts can be used, and accounts can be opened in the UK
• You can’t work for a US company without a Visa (but clearly many do illegally)
• See slides for a list of the best Visa types, which can be complicated and arduous to apply for. Use an attorney.
• Now you need to hire people. The best way to hire is with a recruiter as it is not easy and highly competitive
• Valley people are very startup savvy
• Valley people aren’t keen on inappropriate “British” humour
• Valley people expect a good package, e.g. snack room and healthcare
• Use a specialist company to take care of complicated rules governing payroll etc
• In conclusion: It’s expensive. $50,000 just to get up and running, even before salaries/rent.
• Once established, communicating with your European base will mean daily early morning Skype calls and weekly video conferences
• But it may just work out…