The guide to getting a base in Silicon Valley for your European startup

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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…

  • http://www.aukendi.com Erhan Karadeniz

    Great article, like me probably many EU entrepeneurs have considered going to SV, this article gives a clear guideline on how to achieve some of the goals you have set.

    Too bad I cannot watch the video of the presentation, would have loved to see it.

  • http://everydaypanos.com everydaypanos

    Why would ANY EU startup leave base here and go abroad? That’s just plain *&%##)$.

    And if you(founders) have such an urge to ‘take Americans at their own game’ you should… don’t know… try doing a better product for starters.

    Silicon Valley is SO not the offices and the free snacks. It’s all about knowing what the trend is and being able to deliver great solutions to small or large problems. It is also the abundance of VCs, which as Calacanis(Calamaris, auto correction: LOL) told us, is just everywhere.

    You make it sound like an office in Mumbai w/ Indian devs who do some kind of chores-work for the company. If you really want to make it sound intruiging, maybe just give us a few examples of startups that took your advice and actually succeed(huddle? really?). What? There is none? Funny.

    The ONLY way TechCrunch EU will have cool startups to tell us about, is by NOT advising them to pack their bags. Weird.

    • http://www.twitter.com/PaulJoslin/ PaulJoslin

      They haven’t left the UK. They’ve simply expanded the company over seas. It makes perfect sense for partnerships and potentially global growth.

  • http://everydaypanos.com everydaypanos

    (sorry for the double post)

    OK, I got banned from TechCrunch USA for commenting about the whole ‘Facebook is building a phone’ Arrington story, and I will very likely be banned from here as well for saying this, but:

    This is the WORST blog post I have ever seen in ANY tech blog. It’s just amazing: Let’s see the news to day on TC EU. Post No1: Pack your bags to SV. This mentality of inferiority is just appalling.

    Sorry. #ironydefinition #epicfail

    • McBeese

      @everydaypanos – as a founder of a startup outside the Valley, I found this post interesting and directly relevant. Thankfully, Techcrunch is not all about what you want.

    • Steve O'Hear

      LOL. Ban this guy.

    • http://twitter.com/mikebutcher Mike Butcher

      Our apologies. What would you like? More news about gyms?

      • http://everydaypanos.com everydaypanos

        Plz don’t gang up on me. I go to the gym.

        (Since I can’t compete w/ proper British Humor, I simply step off.)

  • http://huddle.com Andy McLoughlin

    This may not have been clear from the slides, but the thrust of the talk was *extending* your European startup to the west coast. Not moving.

    And although you might question the value of the information contained, I can guarantee that it has been (and will be) useful to a lot UK companies trying to navigate the mess that is the US visa and healthcare systems.

    • henry

      I can remember reading a blog post from founder of Fo. He mentioned that cost of US healthcare benefits as one of the things that kept Fon from making the move to SV. The cost was too much in comparison to staying in the EU.

  • http://jetlib.com/news/2010/10/06/you-gotta-fight-for-your-right-%e2%80%93-how-to-thrive-as-a-european-startup-in-the-valley/ You Gotta Fight For Your Right – How To Thrive As A European Startup In The Valley | JetLib News

    […] Read the rest of this entry » […]

  • http://www.aukendi.com Erhan Karadeniz

    @everydaypanos
    clearly you’re narrow minded

  • http://www.toshl.com andraz

    Very interesting

    especially about asking questions at interviews. The rest seems expected…

  • Kwyjibo

    “Valley people aren’t keen on inappropriate “British” humour”

    You boring shits.

    • Steve O'Hear

      British humour is *never* inappropriate!

      • Jonjon

        It is inappropriate when it results in a harassment lawsuit….

        I have witnessed many Brits/euros fall into this trap…

      • Steve O'Hear

        That doesn’t sound like humour but bullying. Not good.

  • http://everydaypanos.com everydaypanos

    British Humor Alert: If you think you can tell me that my EU Startup needs an SV base, I think I can tell you where to go.

  • Nag

    Wow~ This is awesome. You make us proud being in SV.

    You are right the valley people just like what you have mentioned.

    Cheers, Nag

  • fedd

    yeah! do sv cos open offices in the uk? yeah!

    :)

    • fedd

      really i mean the topic is useful.

      remember, the US is a market which is like a whole world in size, but with no borders and with one language. this is just a obvious move for any company.

      (and if they had only one timezone it would be an ideal market!)

  • http://www.ring2.com John Flynn

    I moved from London to San Francisco a year ago. Networking is an art form here. The best organization I found was the old UK Chamber of Commerce.

    http://www.babcsf.org. LinkedIn is very useful but the BABC is all about helping Brits get sorted in the Bay Area with lawyers, tax specialists and relocation experts on tap, as well as an instant network of ex-pats that can help you navigate the school system.

  • http://www.nextspace.us Rebecca Brian

    This is great information! We see some of these things happening at NextSpace coworking as well. For example, we have a number of EU-based companies that have opened up satellite offices in our San Francisco location. They use NextSpace as their office either virtually (before they get here to start their local presence), or as their physical office space when they get started to save money and have an instant community and resource pool.

  • Ryan

    Am I missing something? Why setup a US company? Why not just setup an office, US bank account and start selling your product in the US?

    Unless you are wanting deals with VCs, I don’t see the reason for a US company? Is it a staffing issue? Please fill me in…

  • Ryan

    Do you need a working visa if you are working for your uk based company in the USA? After all you are not working for a US company or taking someone elses job?

  • http://huddle.com Andy McLoughlin

    @Ryan – on your second point, (AFAIK) you technically don’t need a visa to work for your UK company but you can’t stay in the US for more than 3 months. And if you come in and out a lot, eventually the nice people at border control won’t let you back in.

    This sounds unlikely but I know 2 people who have had entry denied as it was suspected they were working in the US.

    Basically, if you’re planning on anything more than a few short visits per year you’re going to need a visa.

  • Ryan

    @Andy – thanks for the info. I’m actually from Australia. We get the 3 months in US as well. It is crazy that they offer this 3 months yet, if you come in too much (is there an official rule?), then they decide based on their mood for the day, to not let you in. Why can’t I tell them that I work for a Australian company and I am there on business? I do understand that I would have to leave every 3 months… trip to The Bahamas from Florida perhaps OR San Fran to Canada? :-)

    • http://www.iovox,com Ryan Gallagher

      In theory you need a business visa even to attend a single business meeting. It’s not just if you are ‘working’ in the US. If I am working for a UK company and travel to the US and attend business meetings I need a special visa. The three month stay is only for Holiday purposes and you are not allowed to conduct any meetings while you are there. They tend to be lenient sometimes but is really up to the border official if they want to allow you in or not.

      You are also not allowed to do any free or charity work. Any work is prohibited on a tourist visa.

      • http://huddle.com Andy McLoughlin

        Ryan -i’m 99% sure you’re wrong there. We’ve been advised that it’s perfectly find to hold business meetings etc when travelling to the US on an I-95 (visa waiver). I’m no highly paid big city lawyer, though, so would bow to a paraprofessional’s opinion.

      • http://www.paulcarr.com Paul Carr

        Yeah, Andy is right; Ryan is wrong. Business meetings are perfectly fine on the visa waiver.

    • Nick

      (Australian speaking here) – I’m not sure whether it’s prohibited to go to meetings on a visa waiver or not, however I have a B1/B2 business visa, and it’s not too difficult to obtain from your local embassy. It’s a matter of having a meeting at the embassy, paying (if I remember correctly) $150, bringing a passport photo and other documents, and handing your passport in for the US visa to be officially printed on.

      After that, you’re still at the liberty of border officials, however it’s an added layer of security to your entry, and also lets you stay on for up to six months (you still cannot work etc).

  • http://www.sfnewtech.com Matthew Gonzales

    Great article. We are happy to host all tech start-ups at SF New Tech. Currently visiting Dublin, Ireland if tech companies are here and want to chat.

    Cheers –
    matthew@sfnewtech.com

  • fedd

    my comment about John Lennon living in the US was censored out!

  • http://jetlib.com/news/2010/10/11/euro-entrepreneurs-%e2%80%9ceither-come-to-the-valley-or-stay-home-and-play-with-the-losers%e2%80%9d/ Euro Entrepreneurs: “Either Come to the Valley or Stay Home and Play with the Losers” | JetLib News

    […] west to Silicon Valley. Meanwhile, those who have already made the jump frequently head home to offer advice and encouragement to those left behind on how to follow […]

  • http://kaseyliles.wordpress.com/2010/10/11/euro-entrepreneurs-either-come-to-the-valley-or-stay-home-and-play-with-the-losers/ Euro Entrepreneurs: ?Either Come to the Valley or Stay Home and Play with the Losers? | Kaseyliles's Blog

    […] west to Silicon Valley. Meanwhile, those who have already made the jump frequently head home to offer advice and encouragement to those left behind on how to follow […]

  • http://isabeladale.wordpress.com/2010/10/12/euro-entrepreneurs-either-come-to-the-valley-or-stay-home-and-play-with-the-losers/ Euro Entrepreneurs: ?Either Come to the Valley or Stay Home and Play with the Losers? | Isabeladale's Blog

    […] west to Silicon Valley. Meanwhile, those who have already made the jump frequently head home to offer advice and encouragement to those left behind on how to follow suit. But with the decline of Silicon […]

  • http://theelectroshock.com/euro-entrepreneurs-either-come-to-the-valley-or-stay-home-and-play-with-the-losers/ Euro Entrepreneurs: ?Either Come to the Valley or Stay Home and Play with the Losers? « theelectroshock.com

    […] west to Silicon Valley. Meanwhile, those who have already made the jump frequently head home to offer advice and encouragement to those left behind on how to follow suit. But with the decline of Silicon […]

  • http://www.tandempushchairs.net/uncategorized/euro-entrepreneurs-either-come-to-the-valley-or-stay-home-and-play-with-the-losers Euro Entrepreneurs: ?Either Come to the Valley or Stay Home and Play with the Losers? | Tandem Pushchairs Review

    […] west to Silicon Valley. Meanwhile, those who have already made the jump frequently head home to offer advice and encouragement to those left behind on how to follow suit. But with the decline of Silicon […]

  • http://camillegupta.wordpress.com/2010/10/12/euro-entrepreneurs-either-come-to-the-valley-or-stay-home-and-play-with-the-losers/ Euro Entrepreneurs: ?Either Come to the Valley or Stay Home and Play with the Losers? | Camillegupta's Blog

    […] west to Silicon Valley. Meanwhile, those who have already made the jump frequently head home to offer advice and encouragement to those left behind on how to follow […]

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