This Monday marked a jump into a week full of founder and investor talks and 2 corporate visits. Given that our teams are more well adjusted into the area and got to know each other better in the first two weeks, they are ready to take on the week! Monday was a day full of weekly’s: our way of catching up with the individual steps that teams take as well as milestones that need to be covered. We concluded the day by establishing deadlines and goals for each and every team and offered our recommendation for their questions.
Our second speaker of the day was Barış Karadoğan, a venture capitalist, angel investor and the CEO of Endless Solutions, a company aiming to promote computer access. Coming from Turkey and having spent 28 years in America, Mr. Karadoğan reflected on his experience in America and the Valley. He states that he fell in love with computers and started his gaming career with building a game like space invaders as a very young kid and having the whole neighborhood playing video games when it was still extremely abstract. He studied electrical engineering in Lafayette College and worked as a network engineer when the concept of “internet” was a novelty. After his 10 years working as a developer, he decided to pivot into a new career and got his MBA from Stanford after realizing that he was one of those few engineers who was also blessed with social skills(!). Following this, he started his new career as a venture capitalist, where he realized the rewarding experience of being granted the big picture view and getting the opportunity to invest in creative ideas. “It was also a great way to build a network”, he says; “a network which I used when I pivoted into my new career”. Wanting to see how the front lines of business worked, Mr. Karadoğan started his current work as a CEO in Endless Solutions. He reflects on his first couple of years as a CEO by sharing an anecdote: “If I was honest, I sucked as a CEO my first year.” He laughs at how when applying for a new job after his initial experience as CEO, he was faced with a bad reference from someone who knew him in that first year. “When my new employer confronted me with this bad reference, I turned the table around and asked him what he was like in his first year as a CEO.” According to him, it’s quite possible to turn weaknesses into strengths just by adopting a different lens.
His current work is primarily focused on Endless Solutions. “Half the world population has never seen a computer; there is no internet, it is expensive and it is hard to use.” Which is why Endless Solutions empower low economically developed countries with low-cost computers with preloaded, easy to use apps. “When I was young, I saw a computer that changed my life, now I do that for kids who have never seen one” he shares, when asked what is the most rewarding aspect of his job. Give a family that didn’t even have electricity in their house a computer and they can go on Duolingo to learn a new language or even Khan academy to extend their knowledge. “While other companies like Apple and Google kill each other for the richest half of the population as their customers, we work with the other half, “ Mr. Karadoğan says.
Kashi then elaborated on team incompatibility saying that it is an essential aspect to consider when there are people working together constantly like two co-founders. Kashi recommended routine health checks of the relationship once every month, through a dinner where you don’t talk about customers, products, revenue or employees. Rather, teams should ask each other “how are we doing, what can we do to make this work better”. There are certain risk factors that can infringe the relationship and lead to problems such as lack of complementary skills, not having worked together before, having founders that are family members, having two Alphas in the group, lack of compromise and having founders that are overly susceptible to stress. “Learn to deviate and compromise without anger” Kashi says. Kashi finally introduced the concept of “execution”: the high velocity, high quality, completion of a defined project which moves a number that matters to the company.
For the third and final section of the session, Jeff Abbott talked about the changing nature of leadership within companies as they scale. He introduced a concept called “tours of duty”, which he used in the following context: much of the responsibility for recruiting and developing talent belongs to your firm’s individual managers. Thus, by structuring work as a series of “tours of duties”, you can acknowledge the reality that a few employees will stay in one company throughout their career. A dynamic that is critical to establish in a company is an atmosphere of alliance rather than an employee and employer relationship. When the company scales beyond the founder’s comfort zone, this alliance will entail continued celebration of success, maintaining mutual trust, making the company a place where employees want to stay and staying connected with them if they choose to leave by embracing how the time of mutual alliance has ended. Jeff then elaborated on common CEO mistakes to watch out for when it comes to team building. The first is hiring people too far in advance either because of hiring too many people too quickly or hiring people who would be better suited to later phases of growth. The second is solely considering raw talent rather than the prospective employee’s overall fit in the team. The third is using the founders to fill the organizational gap, which can only be a short-term strategy. “The long-term CEO needs to avoid these pitfalls and hire leaders who can build the organization in a sustainable and scalable fashion” Jeff says.
On Thursday, we started off the day right with a corporate breakfast event at the Silicon Valley Bank. Silicon Valley Bank(SVB) is one of the largest banks in the US that has helped fund more than 30,000 start-ups to this day, working only with “innovative startups with high quality founders”. They introduced the concept of “hockey stick growth”, a form of exponential growth for companies that Silicon Valley venture capitals seek in startups before investing. This doesn’t only have to entail revenue, but could be based on number of users or interactions. Most venture capitals apparently have a minimum ticket size of 5 million dollars and don’t have the manpower to deal with ticket sizes lower than that. If you are an international company based in another country, you should be conscious of the difficulties of settling as a new company in America with high rents and hiring prices. If your technology allows you to manage the company from afar, that is a viable option. Consider Facebook, Vera Shokina, the managing director of SVB, shares. It’s a company with unlimited perks in working life with millions of dollars; yet, employees still choose to leave after 2 years in multiple cases. Vera recommended becoming Americanized and considering the different working culture and mentality here is a must in order to replicate your previous success in the US market. This could possibly be made easier through choosing an American co-founder.
According to Vera, companies could also choose to build connections here and manage the business from its country of origin. There are multiple obstacles in front of settling in the US such as bad hiring decisions, unrealistic goals and cultural differences. One specific aspect of looking for investment in the US is that many investors sound positive during the evaluation positive, making it easy to misinterpret and take the investment for granted. “Don’t ask for money initially, ask for advice; introduction is the biggest currency in Silicon Valley” Vera says. Vera continued with her recommendations to our startups by saying “Especially for Fintech companies, we have very strict regulations and high entrance barriers; in order for us to open an account for them at SVB, they need to be a Series A company with 10 million dollar backing by VCs.
Vera concluded her presentation by sharing strategies to make it here. Being accepted to an acceleration program like TechStars, YCombinators, 500Startups, 3S Landing Pad, going to demo-days, investor talks will all help with your growth process. Be conscious of time; time is counted by minutes in the Valley and translates directly into money. If you are in a meeting, ask your questions fast and make it valuable if you are taking up someone’s time. Tiptoe into the US market through launching your global product overseas and coming into the US market with multiple visits. If you get investment from local investors from your own country, getting investment here becomes more likely. If a local investor from your country thinks that you should not be going to the US to enlarge the business after their investment, they are most probably not the right investors.
On Friday morning, we were invited to the Mexican Consulate for a VC Talk to Mexican entrepreneurs by our very own Tuto Assad, a managing director at Toro Ventures VC and the Director of Entrepreneurial Funds at Technologica De Monterey. Our teams also had the opportunity to hear from Angel Saad, a venture partner at Oak Investment Partners, over a coffee and Q&A session. Adam from Cabture says “I was surprised regarding the number of Mexican entrepreneurs in the Valley!” Wisboo was amused to share that they missed the event because they accidentally took the train going the opposite direction. “Don’t try to navigate in the Caltrain while in a teleconference!” Federico says.
We closed off our week with an office happy hour where we discussed developments within the week as well as things we discovered over wine and popcorn. Buck.ai CEO Utku said that he was completely mesmerized with Vera’s presentation in SVB as a Silicon Valley insider. He also shared an interesting anecdote that he found out during the week: “A group of Americans invested 12 million dollars to implement a smart gadget in a golf course in Finland that only 2 people use”, pointing to the interesting investment potential of the area. SmartMimic stated that they were happy to have finally found a car(!) Codela shared that they were surprised to find out during a pitching event that one of the influencers they closely follow only managed to get investment for her startup on her 128th pitching event. They also managed to arrange a meeting with a desired mentor through the connection of a connection; “Don’t give up, abuse the connections you have!” they recommended. Adam from Cabture was excited to hire his first intern and to have come second in a pitching contest: PitchForce, where he found 4 angels interested in his startup. We also experienced an interesting coincidence during the happy hour: while talking about startups our teams followed and admired, Walker&Company came up: a consumer-centric health and beauty products company particularly for people of color. The teams were delighted to find out that our coordinator Aydin Birik is friends with their owner and we can arrange an event with them! Thus, teams shared that they were extremely satisfied with how the program is going so far and are excited for the weeks ahead!