This guest post is from Chris Hexton, an Australian in San Francisco and the co-founder of Semblance Systems. Born in late 2010 as a Ruby on Rails and iOS consultancy, the company is now focused on building its own products to help other online businesses increase their revenues and customer engagement. Hexton is currently working on Vero, a SaaS products that helps startups increase their conversions using targeted emails.
Having recently visited San Francisco for the first time as part of the culmination of the 2012 Startmate accelerator program, my co-founder and I have now decided to stay in San Francisco for a few months with all likelihood of staying here indefinitely.
Part of making this decision has been to reflect on the key differences between Sydney, Australia (where we started our company) and San Francisco. Given that our aim is to further our company’s growth as much as possible, it’s important to ensure we are making the right decision. There are, in my opinion, three key reasons a startup from Australia (or anywhere for that matter) should spend some time in San Francisco.
Capital raising: The main reason I think people should come to SF from Australia is to raise money. There is a lot more money being invested in SF than in Australia. Australian investors are generally more conservative and startup valuations reflect that. As founders, we all want to keep as much of our companies as we can and fundraising in SF provides a greater opportunity to raise capital at better valuations than in Australia. The breadth of investors here also means there is an investor for everyone (within reason). In other words: as nice as it is to raise money, it’s even better to work with an investor that you actually like and can relate to. More investors means a greater opportunity to meet someone you can actually bond with.
The people you meet: Visiting SF gives you the ability to prove you can play on the world stage. People are just people and, in most cases, those who sell their companies for $1 billio aren’t actually more special than you or I. Knowing this increases your confidence and understanding. Meeting successful people, hearing their stories and seeing how ‘real’ they are can help cement the concept that if you put your head down and work your arse off then you can survive and build a startup you’ll be proud of. Of course, temper this with knowledge that you should work on a startup with real revenue potential!
Internal motivation: For me, personally, coming to SF to live for a time is a great life experience and a motivator in and of itself. As the saying goes, “a change is as good as a holiday.” Getting into a new rhythm and spending quality time being inspired and thinking big can be helpful for anyone. At the very least, I think it’s definitely worth a visit, particularly as flight and accommodation prices in SF are decreasing over time (checkout Startup House in SoMa).
At the end of the day, San Francisco is not a place that will magically transform your startup. As always there is no silver bullet, but it does have some distinct advantages and you should use these to your advantage in order to get the most out of San Francisco for your startup. Fortunately, leveraging opportunities is something we founders are pretty used to doing!
Image by Flickr user Alain Picard