From accelerators to exiting your company
Oxford, 04 April 2016
The second part of Silicon Valley insights includes the meeting with a founder, who sold his robotics company to Google, and a visit to Eventbrite. Also, this post focusses on San Francisco's startup scene, opposed to the first post's focus on Google and Facebook.
Were we took off
The last post ended with an insight into the different approaches of European and American investors, stating that American investors are interested in big thinking founders, while European investors are more risk averse, thereby wanting to know that an investment is safe. Taking into account that we are talking about American investors in the Silicon Valley, it might now become clear how companies happen to be evaluated as unicorns.
Startup spirit
The last post ended with an insight into the different approaches of European and American investors, stating that American investors are interested in big thinking founders, while European investors are more risk averse, thereby wanting to know that an investment is safe. Taking into account that we are talking about American investors in the Silicon Valley, it might now become clear how companies happen to be evaluated as unicorns.
Startup spirit
Accelerators and co-working spaces
However, even these unicorns once started as young companies, even ideas. So, the group of German MBA students came to visit accelerators and co-working spaces, such as the Plug&Play Centre, the German Silicon Valley Accelerator, the Impact Hub, and many others. They saw how founders supported each others, and how a co-working space's culture perfectly fits the culture of young companies. What else did they learn? Competition in the valley
An important thing they learnt was that, "if you have an idea, and you are working on it in the Valley, then you can be sure that there are at least three other startups doing the same thing right now." This information on the valley's competitive landscape was followed by a piece of advice:"If you start your company somewhere else, it will be less hard, as the startup scene is less saturated. But, you will have more trouble getting in contact with the big investors".
Stanford University
So, the competition is hard, even for startups working in a magical place such as the Silicon Valley, but there is another element creating innovation, Stanford University. As the whole valley came to happen as a result of the university's efforts in creating spin-offs, the uni as today has a good reputation in creating innovative companies by itself. If you are a student at Stanford, chances are high that you might join one of the valley's big players, or that you even found your own startup to innovate the world.
Growing and exiting
Growing and exiting
Growth strategies
The students also met Eventbrite's market expansion and international marketing officer. She gave them an insight into the development of the company, its culture, and even the strategies they are using. Also, the students learnt about difficulties in decision making, especially regarding trade-offs or scarcity of resources in young companies.
Selling your company
On the campus of Stanford University, the group had the chance to talk to a German, who founded a spin-off regarding his prior academic work. After going to Stanford for a term abroad, Google took notice of his company. They started negotiations and he finally sold the company to Google. But, as his knowledge is a big part of the company's intellectual property - in other words, it could not be run without him - the deal includes him staying as a Google employee in order to earn the full amount of the selling.
After the deal
What did the students learn from this talk? It was notably, that by founding a company one gets the freedom to decide on one's company and its operation - this is the reason why many founders are said to never be able to become employees again.
But, exactly this happened when he sold his company and got a job at Google - he became an employee again. Such a (backward-) transformation might bother prior founders. Thereby, the students learnt that the glory of a big company buying your startup might not feel like getting a lot of money and saying goodbye. Instead, you alone had a say in what your company - your baby - would do, and you nurtured it on your own until now - now you gave up control. Someone else will do as he pleases... selling your company, you have to stand the pain of letting go a big part of your life.
After the deal
What did the students learn from this talk? It was notably, that by founding a company one gets the freedom to decide on one's company and its operation - this is the reason why many founders are said to never be able to become employees again.But, exactly this happened when he sold his company and got a job at Google - he became an employee again. Such a (backward-) transformation might bother prior founders. Thereby, the students learnt that the glory of a big company buying your startup might not feel like getting a lot of money and saying goodbye. Instead, you alone had a say in what your company - your baby - would do, and you nurtured it on your own until now - now you gave up control. Someone else will do as he pleases... selling your company, you have to stand the pain of letting go a big part of your life.
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About this Blog
Splendid Startups is a Blog about real-life entrepreneurship. The blog's goal is to learn from startups and their day-to-day experiences: a startup diary so to speak.
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