“The Silicon Valley is not right for everyone,” says Mike Klyszeiko, who helps Nordic companies to the U.S. market. We asked him why.
Q. You run the Launchpad USA program that helps companies break into the U.S. market. I’ve heard you say that Northern European companies are too fixated on the Silicon Valley. What do you mean by that?
A. I think companies can get intrigued by the mystique of the Silicon Valley. They see it as a paradise for startups.
While the Silicon Valley, for sure, is an attractive place to start and scale up a business – it has an un-paralleled eco-system of investors, universities, and experienced talent after all – it is also an extremely competitive and costly place to do business. Last year the average salary for a computer programmer was $197 500.
On top of that, the workforce is very “mobile.” By that I mean they are willing to leave one company to join another if there is a better opportunity. Companies that want to go to the Valley better have deep pockets and a firm understanding of the environment in which they are entering!
The good news is that more and more Nordic companies are understanding the risks of going there. I personally know four Finnish companies that entered the U.S. market through the Silicon Valley, but soon left for the reasons I mentioned above.
Q. What are the Nordic companies missing, in your opinion?
A. In many cases companies are lacking a clear plan for entering the U.S. market and the network that is needed to succeed in the market. They go to places like the Silicon Valley with the idea that they are going to pitch to local investors and that their innovative technology alone is worthy of their money.
I see time and time again companies not fully understanding the big picture as it relates to their business offering.
There is a lot of innovation occurring in a tightly networked ecosystem such as the Silicon Valley. Entrepreneurs, investors and others are collaborating to create disruptive technologies at an alarming pace.
If you are a foreign company entering this ecosystem without connections there is a good chance you will be left behind and out of the discussion. Foreign companies need to better understand which investors and which networks they need to tap into before going over. They need to do their homework on the VCs.
Try to learn as much about the VCs portfolio companies understanding the interconnectivity of those companies and how their company fits into that portfolio.
Q. What then are the other possible markets that are under-tapped?
A. There are emerging markets in the U.S. besides the Silicon Valley that are creating strong ecosystems to support startups and scale-ups. Look at a place like New York City and its “Silicon Alley” which is becoming an extremely popular place for entrepreneurs to launch their ventures.
More and more Europeans and native East-Coasters are flocking to NYC to tap into the already strong and growing private equity markets. In addition to the money, there is a strong network of successful entrepreneurs, incubators and startup gatherings which increase collaboration and opportunities.
Other cities like Chicago, Boston, Seattle and Austin are carving out their place for aspiring entrepreneurs and are good locations for the right type of entrepreneur.
Q. For full disclosure, where in the United States are you from?
A. Well, you know, I hail from the Silicon Valley, California, or as us locals call it, the Bay Area. I grew up there, worked there and studied there at UC Berkeley. If you consider Berkeley as a part of the Silicon Valley. I do, but others do not, especially those people from Stanford!
FOR MORE INFORMATION, CONTACT:
Director of Launchpad USA
+358 (45) 140 4911