Live from our Trip to Silicon Valley

 

We are in the SF Bay Area since last week and meet with some of the most promising startups and established investors. Below my daily impressions:

  • San Francisco (SF) is taking over from Silicon Valley. Young people like the city and nightlife and prefer it over Silicon Valley (SV). Many new office and housing projects are undertaken to support this growth. To me that was very surprising to hear as I always thought SF is more expensive than SV. This was the info we got from a leading VC who has in various funds more than 2 billion USD invested and who will also open an office now in SF to be closer to the action.
  • Lots of companies use A.I., Machine and Deep Learning in nearly anything they are doing. It is a hot buzzword and investors love it.

  • Another very experienced VC in Palo Alto told us during lunch at Sandhill Road
    • he focuses on data-driven business models and does not care which vertical industry they focus on.
    • the founder team and the business model are key for him to invest in a startup.
    • established companies from all over the world move to SV cos they need to explore new data-driven business models.
    • it is not a manufacturing nor product battle but one on how to use data to run your business.
    • he gets about 10 business plans a day but looks only at the ones that were referred to him. If someone simple mails it without a reference he does delete it. So networking is key if you want to raise money from VCs.
    • we also talked about Europe and Switzerland and their high rankings in competitiveness indices. He said: if Switzerland would be compared to high-tech regions in the world like SV then it would not show up on top “but maybe on rank 47 or so”.
  • Money is here for the best.  A former colleague of mine told me that they could raise 50 million USD in a first round without showing a single Powerpoint slide. I cannot mention the name of the company. They are a seasoned team of engineers, marketing and business managers and I worked with them back in 2000 in another startup. They told me all that was needed was a conversation and the whole process took 2 weeks only. Whow. How impressive. Compare that with having to write business plans in Switzerland for CTI labelling? Not to mention raising money. What a difference in attitude.
  • Last night we had dinner with a friend of mine at their home. They are from Switzerland, moved here in 2006, have 3 kids in colleges and work both. So here what they told us about their life in the heart of Silicon Valley:
    • traffic increased dramatically, Highways now have 1-2 more lanes on each side.
    • housing costs skyrocketed and there is no protection for tenants. Trailer parks or trailers on streets pop up often even families live there. If you don’t own your own house then you might not be able to afford living.
    • as a result of the high costs, there is a big demand for lower paid jobs like in department stores. the people move away as one cannot afford to live.
    • in Silicon Valley one must have an income of 120k CHF to be able to live.  The average in the US is 40k.
    • costs for colleges keep going up and become a huge burden. My friend has now even three kids in college which is a cost of 120k per year not counting living costs.
  • The growth continues: Google will hire 25k people in the coming few years and also FB is looking at 20k more employees to join. These numbers were given ti us by a VC.
  • Last day today. We then take a few days off to travel to Southern California and Las Vegas.  It was a successful trip. Had nearly 20 meetings and hopefully some of them will lead to partnerships and some possibly move their Europe offices to Switzerland. Quality of life will be better there. Understanding of new business models and hightech markets though not. There Switzerland and Europe must catch up and learn – better fast – if we want to secure future jobs…

Leave a Reply

Scroll to top