FOWA 2010 - Fighting and Thriving in the Valley

Fighting & thriving in the valley
Tips for UK businesses going west

My name is Andy McLoughlin
Co-founder Huddle.com
Organiser DrinkTank events
Spent the last 6 months in SF

2 years ago
SpinVox were the #1 start-up in the UK
Paul Carr was still drinking
Tweetmemewas a Fav.or.it side project
Dopplr were still independent and growing
A twitter clone won TechCrunch50
Huddle was a small handful of people based in South East London

I spoke at FOWA ‘08 about ‘surviving prospering outside the valley’
http://www.flickr.com/photos/thecodefarm

I argued we have everything here we need to prosper...

So if Europe has everything we need, why do I find myself in San Francisco?

For Huddle, it was a combination of factors:
Our new VCs are there
Our big partners are there
Our customers are there
A strange desire to take on the Americans at their own game

It was never a wholesale move
}
Co-founder
Product and engineering
Marketing
Global sales
Huddle will always be a UK start-up
London

The good thing is, doing business in the US is easy!
... right?

Not quite. But it is do-able.
(and with a team of 12 in SF, here’s the stuff we’ve learnt along the way...)
.

Do you really need to be there?
?
This should be the very first question you ask yourself.
Is it really worth the time, expense and distraction?

Don’t go in blind
Flights are cheap so get out there
Immerse yourself in the start-up culture
Familiarise yourself with the geography
Meet people

Great events to meet other start-ups, angels and VCs
SF Beta
SF New Tech
Startup2startup Dinners
SuperHappyDevHouse
Plancast.com is your friend!

Useful conversation starters when meeting Americans
Angelgate (or “I wish Ron Conway was my dad”)
Tyranny of high fructose corn syrup
“Trader Joe’s is awesome!”
Hand sanitizer

http://gapingvoid.com/2008/08/05/silicon-valley-map/
Gaping void silicon valley
Navigating The Bay Area

Google map – SF to San Jose
San Francisco
(hipsters and winos)

Google map – SF to San Jose
Silicon Valley
(khaki and Googlers)

It’s kind of like Reading

(but with sunshine and palm trees)

Still intrigued (or love Reading)?
Read Paul Graham’s latest blog post on ‘Where to find Silicon Valley’
http://paulgraham.com/seesv.html

Borrowed from http://www.orkposters.com/sanfran.html
For us, it was always going to be San Francisco

Office space
Surplus of space in SF so ask around!

Location sorted. You’re on your way!
Create US entity
Register to trade in State of California
US banking
Visas
Hiring + benefits

Regardless of where you trade, incorporate in Delaware
Generous tax benefits, well-defined body of case law
Suck up the cost and get a lawyer to sort this
Valley lawyers often willing to defer costs until VC financing and trade cost for equity

Great lawyers on your doorstep
Chris Grew
“the American one”
www.orrick.com
Barry Vitou, Danvers Ballieu
“the ones that do Bootlaw”
www.winston.com

NOT ACTUALLY RELATED

US banking for the business
Great things about SVB
Set up the account from the UK
They’re connected to everyone in the valley
Regular networking events
Shit things about SVB
Their banking interface was created by Satan himself
www.svb.com/accelerator

US banking for you
Opening a personal US bank account is easybut getting credit isn’t
Every ATM charges a fee
The answer = HSBC Premier
Free, instant transfers between international accounts, all ATM fees repaid, credit card based on UK credit
Accounts can be opened from the UK

Company sorted! Let’s go to work!
Create US entity
US banking
Visas
Hiring + benefits

FACT
It’s very naughty to come to the US and work without a visa

You are allowed to stay for up to 90 days, do business for your foreign company (partner meetings, client meetings, board meetings, conferences) and perhaps take a holiday.
But you absolutely cannot work for a US company. Oh no.

Many visas, many options
There are a ton of options (including temporary and student visas) but the most popular are:
H1-B (Highly skilled migrant)
L1-A (Intercompany transfer)
O-1 (Alien of extraordinary ability)

Hands up who likes filling in forms?
Visa applications are paperwork-intensive process and one slight error will void your application so use an attorney!
April Nakanishi
Dunbar Harder, PLLC
One Riverway, Suite 1800
Houston, Texas 77056
www.dunbarharder.com

Standard L1-A process
You must be outside the US to apply
You must attend the local embassy in person
Entering the US during the visa application is allowed but frowned upon. Make sure you can prove the trip is temporary!

My L1-A hell experience

Approved Petition
+
Passport with L1-A
+
Stamped I-94
=

It’s business time

Making your first US hires
Create US entity
US banking
Visas
Hiring + benefits

International hiring 101
Hiring in the US is broadly the same as hiring anywhere else.
Don’t hire people you might hate, make sure they can do the job, use your network, avoid recruiters etc.

(but if you do need a recruiter)
Connery Consulting (conneryconsultingllc.com) have staffed for Salesforce.com, Zendesk and many others.

Gross generalisation #1
Hiring in the US is easy
True!Firing is also easy. Get at-will contracts from your lawyers. 3 month probation period and let go if not working.

Valley people are more start-up savvy
True!It’s all about the options pool. Bonuses less common. 15 days vacation. More flexibility but people know their market value and expect to be looked after.

British humour is always acceptable
False!Keep it out of interviews. No bad taste jokes. Don’t ask people their age or personal questions. If you think it might be inappropriate, it probably is and you may get sued for it. Just don't.

A great package of extras is expected
True!The more you offer, the more attractive you will be. This means amazing healthcare, lots of snacks in the office, lunch and dinner provided, Aeron chairs...

Actual start-up snack room

NTK: US healthcare
Healthcare with vision and dental is expected
This will cost around $500 per employee (extra for spouses and children)
Even the best health insurance only covers 90% of cost of an accident
Most popular plans in CA are Anthem Blue Cross, Blue Shield, Cigna, Kaiser
We chose Anthem Blue Cross EmployeeElect (with $20 copay)
Use High Street Partners to coordinate

The other stuff: US payroll, social security, IRS etc
Like company formation and healthcare, don’t even bother doing this yourself. It’s a massive, massive distraction.
Again, High Street Partners (www.hsp.com) are recommended.

The stark reality is setting up in the US is bloody expensive
$50k to get a team up and running (visas, flights, office, accommodation, payroll, taxes, incorporation)
10% of this cost to cheat 

Communicating with London
You get up earlier (7am starts are normal)
UK team work later
VOIP office phones
Rebtel for cheap calls via your mobile
Weekly team stand-ups with video conferencing

Thank youAndy McLoughlin@bandrewSlides online at www.slideshare.com/bandrew Thanks to Stephanie Robogeisha, Scott Rutherford, Bastian Lehmann and Alicia Navarro for their tips

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FOWA 2010 - Fighting and Thriving in the Valley

by Andy McLoughlin on Oct 05, 2010

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FOWA 2010 - Fighting and Thriving in the Valley — Presentation Transcript