Silicon Valley, located in Northern California in the United States, is the epicentre of the global high-tech industry. It is synonymous with the world’s largest technology corporations including Apple, Google, Facebook, Cisco and HP.
This 30 by 15 mile stretch of land houses a wealth of resources waiting to be exploited by Irish companies willing to take a calculated risk. There are major opportunities for new Irish technology companies to make a global impact through contacts and funding available in the Valley.
Silicon Valley contains a huge concentration of venture capital (VC) firms who are seeking the next eBay or Intel. Many of these firms are centred on or around Sand Hill Road in Menlo Park – considered to be the Wall Street of Silicon Valley.
One Irish company that is currently seeking to take advantage of the opportunities available is TapMap, founded in 2009 by Philip McNamara. The company uses mobile platforms to publish retailers’ price and inventory to make their products accessible to local consumers.
Philip moved to Silicon Valley three months ago. He said, “it’s an amazing place because there are so many people here who can help. You have these world class companies, these Fortune 50 companies, which are… just 15 minutes drive away.”
Compared with Ireland he says Silicon Valley has a, “Whole ecosystem that is full of really smart people, really good people who want to help out and want to see you succeed. I was in Ireland and it was really hard to get access to those kinds of people and companies.”
Along with the many benefits of moving your company to Silicon Valley, there are many challenges. There are a number of considerations when deciding whether or not to make the move:
- An obvious disincentive is the physical distance from Ireland. California is just over 5,000 miles away and 8 hours behind in time. There is currently no direct flight between Ireland and the Valley, forcing commuters through other international airports to travel between the two.
- Even though there is a lot of funding available, there is intense competition for it from all parts of the globe, including other parts of America. Philip McNamara says that although this is difficult, “There’s a lot more competition at the same time because everyone is attracted here so you have all the companies from all over the US coming here to get funding so there’s huge amount of competition but at the same time the talent is here, the experience is here and the connections are here.”
- American VCs will expect you to set up a locally incorporated company which involves obtaining American legal counsel.
- The overheads associated with locating your business in California are significant. Aside from lawyers and the other costs of forming a company, it is vital to be able to get around and that means renting or buying a car. Borrowing one if you are lucky. Accommodation is also expensive. Philip says: “You have to have friends. A joke we’ve made is “find a family” to stay with – that’s really important because otherwise you’re going to be spending money on a hotel and that’s just incredibly expensive…because you’re going to have to spend 2 or 3 months over here looking for funding and setting up your team.”
- The business etiquette can be a culture shock. Philip said, “Everyone works all the time. I got an email this morning from an essential client at 7.15 am. You’re on twitter and you’re on email and you’re on LinkedIn and on Skype until all hours. It’s just the way it is. Business is business 24/7 even with your social life.”
- Visas that allow you to work in the States can be hard to obtain and sometimes slow to arrive.
- Give some thought to your American mobile phone operator. Verizon’s current 3G phones do not work in Ireland. AT&T or T-Mobile use the same technology as Ireland (i.e GSM or UMTS) so this may be a better option if your phone needs to travel home with you.
Some of these obstacles can be overcome by aligning your company with a business start-up centre who can help with VC meetings, office space, recruitment and advice. One such centre is the Irish Innovation Centre which opened last year.
Another facility is the Plug and Play Tech Center which TapMap is associated with. Philip notes, “They’ve been absolutely phenomenally useful. What they’ve done is put me in front of about 25 VCs to date. I had 4 VC meetings yesterday all set up by the Plug and Play Tech Center because they believe in TapMap and they want it to succeed.”
What if you decide that Silicon Valley is not for you? One company who has decided to stay in Ireland is Cork-based Ferfics, a developer of intellectual property and microchips for radio frequency applications.
Eugene Heaney Founder and CEO of Ferfics, believes it is possible to attract global attention for a technology company without moving away from Ireland. The target market of his company are giants like Nokia, Apple and Samsung. Eugene says, “I don’t think we have ever had difficulties reaching customers or getting access to customers because of our location. That’s never been an issue.”
Ferfics secured €1.7 million equity funding last November to begin production of an energy efficient microchip. Eugene believes VC funding is available at home for other companies, “Ireland is a pretty good place to try to raise capital in my view. I know I may be saying that because we did raise capital.”
There is no denying that Silicon Valley is attractive for new tech companies looking to launch themselves into the world. It’s positive, energetic and a hub of funding and ideas. On the flip-side it’s expensive which can act as a barrier to many new companies but as Philip McNamara believes, “You have to be where your customers are and you’ve got to be where you can start the business.”