Is it worth moving to Silicon Valley?

Tour de Valley - Silicon Valley: Is the trip still worthwhile for start-up founders?

Silicon Valley: is the trip still worthwhile for start-up founders?

Silicon Valley suffers from the bad reputation of the tech giants, from high rental and wage costs. Many are moving away. We accompanied 20 Swiss students to the Valley to find out whether it had a future.

Everyone wants to know something. Students surround the young Swiss entrepreneur Lea von Bidder with a notebook and many questions. The company founder is asked what kind of visa she has, how to get money from American investors and when is the right time to open an office in the USA, more precisely here in Silicon Valley. We are in San Francisco. It is one of the first really warm days this year and two blocks away souvenir selfies are being shot in front of the famous cable cars.

However, Swiss students are less interested in sightseeing. You are here to meet people like von Bidder: The 29-year-old co-founded the start-up Ava, successfully raised investment capital for it, and then opened an office on the American west coast. And that is exactly what the participants of “Explore” dream of, a joint initiative of student organizations from ETH Zurich and the University of St. Gallen. A total of 20 students who have either already founded their own company or are planning this step for the future had the opportunity to explore Silicon Valley last week and learn from the best.

The goodwill is over

Start-ups are in vogue: young company founders such as Mark Zuckerberg (Facebook) and Evan Spiegel (Snapchat) have impressively shown in the past how large corporations can be created from simple ideas with programming code and an Internet connection. This inspired a whole generation of enterprising hobbyists who want to change the world with electronics and software - or at least make a lot of money.

And for a long time it was clear that no place is more suitable for this than Silicon Valley. This is the area in Northern California where, thanks to the concentration of founders, financiers and large companies, a unique start-up ecosystem has emerged over the past few decades; a pilgrimage site for visionaries. For many experts it was therefore a matter of course for a long time that the next technological revolution would also begin here in California.

Today this is no longer considered certain, as the technology industry and thus also Silicon Valley seem to be undergoing a fundamental change: The tech giants are more and more often - and more and more violently - criticized for being quasi-monopolists had become too powerful and influential that because of the network effect and the full bank account, competition was no longer possible. The revolutionary apps and devices could be addictive, they say, and in the case of Facebook they could even be used to manipulate national elections.

Mark Zuckerberg will have to defend himself and his company against this accusation in front of the American Congress on Tuesday. For a long time, politicians let the tech companies in Silicon Valley do their thing and thus made their rapid growth possible in the first place. However, this goodwill now seems to be over and many experts assume that additional regulations will soon be introduced after the various scandals.

At the same time, the start-up ecosystem is growing rapidly in other regions and Silicon Valley is becoming less attractive with its exorbitant apartment prices. No other American city is currently leaving as many people as San Francisco. This also includes renowned investors such as Peter Thiel, who is now making his investments in Los Angeles and thus wants to escape the Valley filter bubble. Here he is observing “a way of thinking that is far too homogeneous,” says Thiel, speaking from the heart of many citizens who are also bothered by the lack of diversity in the tech industry.

One hears more and more often that Silicon Valley is spoiled by its own success, that is why people have become lazy, slow and boring. In addition, wages and house prices have rocketed each other up in recent years, making it much cheaper for start-ups to hire programmers in other regions of the United States. Tech giants like Google and Facebook have also noticed that recently opened offices in more rural areas in order to find new talent there, but also to offer an alternative to employees who want to move from California. For all these reasons, the New York Times even wrote of the “dying Silicon Valley” in March.

Last week, the Swiss student delegation was therefore not only interested in receiving feedback on their own company, getting to know the cultural differences and building a network for future expansion in the USA, the students also wanted to find out whether it was still worthwhile at all is to deal with Silicon Valley. Or whether it is already too late for that.

Between two worlds

She is reading more and more of this change in Silicon Valley in the media, says Ava founder Lea von Bidder, but you don't notice anything on site: “I understand why people want to move away from here, but Silicon Valley is not dying as a result . " And at Beekeeper, the other Swiss start-up that is currently causing a sensation in California, you don't notice any fundamental change. The office management says there are still more talented people here than anywhere else.

There are three blocks and five days between the visit to Ava and the one at Beekeeper. The Swiss students made the best possible use of this time: The start-ups were able to introduce themselves to well-known investors, received feedback on their companies and, in some cases, even received a few of the highly competitive business cards. And visits to companies such as Facebook, Dropbox and Google have made it clear what can happen if the investor's business card becomes a check at some point and the small Swiss start-up becomes a major international corporation.

Silicon Valley offered exactly that glamor that many of the participants had expected: modern offices, an informal working atmosphere without a single tie, plus free meals and t-shirts for visitors. But none of this luxury was left to be felt as soon as you left the isolated tech offices and returned to your accommodation in the heart of San Francisco. The streets there are populated by homeless people and you can see syringes everywhere. With the boom in the tech industry, house prices in San Francisco skyrocketed. The resulting parallel worlds of rich programmers and destitute homeless illustrate impressively why the tech industry, especially in San Francisco, has many enemies.

There is no sign of poverty at Stanford University. School has always been an engine that drives Silicon Valley with great innovative strength. Here students learn in detail how to start their own company. Many important tech companies were originally conceived in a Stanford shared room - and that will continue to be the case, the American students are convinced.

The growing criticism of the big tech companies did not trigger anything at the elite university and the current Facebook scandal is also not discussed, says a Stanford student during a tour of the campus Overriding reporting after reporting fairly uncritically about the tech industry for the past few years. In fact, nothing has changed. "

Stanford is also a role model for Swiss universities when it comes to the commercialization of research projects. "With events like this, we want to broaden the students' horizons and open up new perspectives," says Manuel Buri from the START program at St. Gallen University. He and his colleagues planned the “Explore” tour together with representatives from the “Enterpreneur Club” at ETH Zurich. The responsibility lay entirely with the students, professors or other representatives of the universities were not involved.

Swiss plan to expand

The ETH and HSG students received an authentic insight into Silicon Valley last week. They have learned that they will not be successful here without big visions, big words and above all without big profit forecasts. But they have also learned that here, too, they only cook with water and that the differences to Switzerland are not as great as people often think. There was no trace of a “dying Silicon Valley” anywhere; The current criticism of the tech companies was not an issue either during the company visits or among the participants.

It is difficult to assess whether this is actually just an overcorrection by the media or whether Silicon Valley is simply turning a deaf ear. In any case, the effect should only become noticeable when the money for the start-ups is no longer on the streets, when customers become more critical and when other regions with a higher quality of life and lower rental prices seriously compete with the Valley.

The Swiss participants were at least enthusiastic - not only from the table tennis tables and the free shirts, but also “from the openness and the speed of the region”. Silicon Valley does not seem to be dying, on the contrary, it will soon be richer by a few Swiss start-ups.