My company AppGyver is part of the delegation of Finnish start-up companies visiting USA on 11-16 March to meet the who’s who of the tech world. The trip led by Alexander Stubb, Minister for European Affairs and Foreign Trade, will raise awareness of Finland as a European hub of start-up companies. Our team flies directly to San Francisco, and therefore I’ll focus here only on the events in Silicon Valley part of the trip.
Why Is Silicon Valley So Important For Startups?
Silicon Valley is home to many of the world’s largest technology corporations. It is now generally used as a metonym for the American high-tech sector. Despite the development of other high-tech economic centers throughout the United States and the world, Silicon Valley continues to be the leading hub for high-tech innovation and development, accounting for one-third of all of the venture capital investment in the United States. Geographically it refers to the southern part of the San Francisco Bay Area in Northern California in the United States.
You may ask why does it actually matter whether you’re in the Silicon Valley or somewhere else, we’ve got telephones, email and all other technical means of communication, right? That’s not the point. In order to succeed as a tech startup, everything must go right and be done quicker and quicker. If you’ve got a great idea, you need all kinds of resources to get it done and survive as the winner of the game.
Five Rules Of Silicon Valley Secrets
Rule#1: “Many great innovations are actually invented almost simultaneously (give or take a few months) in different parts of the world”.
What does it mean for a tech entrepreneur? Your idea is not unique. Somebody got the same idea. And I even don’t mention those who are actually copying somebody’s idea (which can actually be a good business, by the way). What you need is resources to learn faster, fail faster, iterate faster and most importantly, get further on the learning curve (faster) than your competition.
Rule #2: “All investors are emphasizing the importance of the team because in order to succeed you need to learn and iterate really fast”.
That brings us into one of the key points of the essence of Silicon Valley for the Finns (or anybody else, actually). In order to learn, fail and iterate faster than your competition, you need money. Often a LOT of money. There are many, many different kinds of resources also available (often only) in the Silicon Valley but I’ll cover that later.
We may have a really good and unique public funding system in Finland (that’s Tekes), but it’s still more or less based on the assumption that you should “get it right first time”. That typically leaves no space to implement my Rule #2. There’s definitely space for “Finland to Silicon Valley Gateway” to help with this.
Rule#3: “Most of the investors understanding the Rule #2 are in the Silicon Valley”.
You may now understand why Silicon Valley is important for the Finnish startups. The only problem is that all of the “first-time” entrepreneurs are really nobodies in the Silicon Valley. Even most of the Finnish serial entrepreneurs are nobodies in the Silicon Valley. So, how do you tap into that resource pool if you don’t know anybody. Well, many of us don’t.
Rule #4: “In order to succeed in the Silicon Valley, start networking now. You need to know people, the right people”.
That’s why this trip with the minister is so important. It also shows that we have great politicians who are doing great work.
Rule #5: “You still need money. If you don’t have it yourself, get it from people who you know”.
In the ideal world it would be different. But starting from Finland, the truth is that you have to get the initial funding from Finland. However, it’s no longer what some experts will recommend you. Instead of trying to find two angels to invest 2x 100K€ in your company (there are REALLY few of those), you should plan on finding 10-20 people who each invest 10-20K€ and you get the total of 200K€. Some people call it crowdinvesting (there’s a great tool for that, Venture Bonsai), while some people call it syndication. There are of course some differences in those, but you get the point.
What’s On The Agenda?
Pekka Pärnänen, the Head of Finpro Silicon Valley has put together a great agenda for the couple of days we’ll be in the Valley. The companies to be visited include Microsoft, Facebook and Twitter. Companies have also several opportunities to pitch to the investors while visiting Accel Partners as well as in two networking events taking place on Wednesday and Thursday.
Which Startups Are On The Trip?
There are total of 27 startups on the trip. Here are some of the most interesting ones you should follow:
AppGyver makes great mobile apps easy! It’s a complete and easy-to-use mobile app development suite which enables anyone with HTML/Web skills to build great mobile apps. Why does it matter? In the next couple of years every business must offer competitive mobile services, and currently it’s too expensive, slow and difficult. AppGyver will enable that mobile revolution. See also this blog post!
Hitlantis is a revolutionary free new music service for independent artists and music lovers. It has unique and really impressive visual interface, used for data discovery also in other industries. See also this blog post!
Distributed work, refined for your needs. Microtask enables seamless, real-time and scalable on-demand outsourcing.
Transfluent is a service that offers effortless, near real-time professional translation to social media feeds and websites. For example, if you tweet something in English, you can have it professionally translated into other languages in the matters of minutes. Even Angry Birds uses this service.
Go West Young Man, Go West
As somebody said, Finland does not need 1000 Nokias to survive in the future. To get started, we need just 10 “Angry Birds”. Do not take that too literally, but we actually need at least 10 companies who can make it global and bring a lot of tax money to Finland. That’s why initiatives such as tax incentives for the angel investors really make sense. In some countries such as France and the UK they already have this kind of a tax incentive, read more about that in this blog post.