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Venturing to the far-off land of Silicon Valley seems to be the dream of many an entrepreneur. It is, after all, the birthplace of companies like Uber and Microsoft. For entrepreneurial brothers Philip and Malan Joubert, heading to the Bay Area was an obvious choice. At a recent Stellenbosch Digital talk, held at the Launchlab accelerator, the two shared some of their knowledge and experiences from the adventure.
One of the first things they mention is to make sure you secure a place to stay — which isn’t going to come cheap. With the success of the Bay Area as a whole, the cost of living has risen dramatically. They rented a small apartment for the equivalent of R60 000 per month — you can comfortably rent a flat in Cape Town with change left over.
For a massive tech-hub in a first world country, Silicon Valley’s banking systems are not on par with SA. “Banking doesn’t work there,” notes Malan. The pair were often withdrawing wads cash to pay for their rent, which isn’t a convenient process.
Apart from living expenses and banking, the startup scene is vastly different from SA. “There’s a culture of helping people,” says Philip.
Silicon Valley has a “pay it forward attitude”, and if you’re doing something cool, says Malan, “there are many, many, many people that are going to help you”.
Philip gives an example of them speaking to an entrepreneur with a failed “Tinder for jobs” startup. The entrepreneur shared all of this knowledge and experience with them without asking for anything in return.
The pair say that Silicon Valley has an attitude about missing out on the next big startup. No one knows who the next Mark Zuckerberg will be, which motivates people to help out as much as possible.
“The market there is driven by big exits,” Malan told the audience.
When it comes to pitching, there are so many VCs in Silicon Valley that it’s possible to pitch to ten in a day. Of course, that doesn’t mean you should be pitching to each and every Angel and VC that you come across. You need to speak to someone that is on your level and who’ll understand your product or service.
“When pitching or looking for money, don’t speak to people who are two levels above you,” says Malan.
The brothers joked about seeing a lot of “clueless” people pitching for US$10 000 at US events.
If you’re looking to build a startup in Silicon Valley, there are many people who’ve done what you need before.
“I don’t know if it’s wise to build an Uber in South Africa. It’s incredibly hard to compete with the US infrastructure,” notes Malan.
Stephen van der Heijden from Stellenbosch Digital, asked how the SA startup scene can reach the point of Silicon Valley. Malan answered with something he said is obvious, but incredibly useful. “Build a business that makes a load of profit.”
Malan said this enables entrepreneurs to invest and reinvest in startups and ideas. He added that entrepreneurs should build a community around their product or service.
An audience member asked the brothers when would be a good time to leave a startup.
Malan answered that: “Exits are rare here. People punt things that don’t make money.”