Silicon Valley might seem like an obvious destination for any start-up with big ambitions. But making a go of it there is as difficult as anywhere else. Wannabe tech entrepreneurs might assume Californian streets are paved with gold, but while access to finance is undoubtedly easier than it is in Ireland, making inroads in the market isn’t easy. It’s also an expensive spot, which leaves many cash-strapped start-ups struggling to stay afloat while trying to build their reputation and secure deals.
“There isn’t a single company I’ve worked with that wouldn’t say 90 per cent of what they are doing is unglamorous,” says Enterprise Ireland’s Simone Boswell.
“Even the companies you hear about in the media aren’t overnight successes. Most of those have longer histories, but whenever a company raises money in the States their history tends to get a little whitewashed and shortened.”
Boswell should know. Her role is to assist companies considering setting up in the Bay Area and help those already there.
“It is a lot harder and more competitive than people imagine. The companies operating in this market are larger than anywhere else in the world in terms of valuations, customer numbers and so on. Firms that have test-marketed their products and have a concept born in Europe can find that it’s a much bigger and more segmented market here than they anticipated. Some come to realise that Silicon Valley isn’t right for them,” she said.
The focus on a few highly successful Irish start-ups has meant most people don’t realise how difficult it can be to make it in the US, she added.
“I don’t like to be critical of the Irish media, but it feels like there’s been a bit of a sales job going on in terms of what really happens out here. It’s a lot more complex than is often reported.
“We’ve got about 50 Irish companies active in the market – either coming back and forth or who are with operations here – and these range from early-stage start-ups to companies such as Gridstore, which has been around for quite a while.
“There’s a tendency to focus on the same three or four companies, but there are other firms that may not have secured a major investment, but are winning customers and are succeeding.
“There are also plenty of people with their heads down working really hard for whom putting their name out and about publicly isn’t necessarily the right decision.”