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The steep hills of San Francisco aren’t just challenging for parking, they are synonymous for the steep climb start-up companies are facing in a place that’s perfect for surfing and riding bicycles and, as we have learned, for growing a business. Fellow entrepreneurs, venture capitalists, industry analysts, social events, conferences, it all happens in this neighborhood. However, there are many competitors in the race for funds, so you have to run fast to get there first. And while you do that as a frugal startup artist, you’ll be spending some bucks.
Rents are outrageous. $3,000 for a two-bedroom apartment in a decent area of the city is the norm. Service providers like PR agencies are plenty, but most of them aren’t looking for cash-strapped clients. If you have budget, you’re OK, but if your prescribed monthly burn rate for the entire operation is $10,000, you better get used to the thought of raising more cash or sending out press releases yourself.
Clocks are ticking faster, too. Not just those of the old-fashioned parking meters, where a quarter of an hour seems to have only 12 minutes, but also the clock that determines the cycle of cool new business models. You have to be alert and proactive or you look old in a hurry. The fact that your site offers social networking hardly getting you attention, because a lot of others are doing it, too. Here, a good idea never lives underground for long. And once others see the merit, they take it, they shake it, they spin it and tweak it to make it into the next big thing. Invigorating and challenging.
Luckily, there are escapes. At the bar of the posh St. Regis Hotel, next door to the Museum of Modern Art, we connected with David Silverman, a colleague from the early days of electronic commerce at Intershop, who now is with Aggregate Knowledge, a company that connects consumers to hot products, interesting content and cool items. Joining us was Michelle Gildersleeve, who also worked at Intershop and now is with a small outfit called Oracle 
For some exercise we climbed the steps from Levis Plaza, the home of the original 501 to the urban oasis of Telegraph Hill and descended down the west side into North Beach http://www.sfnorthbeach.org/index.html, San Francisco’s Little Italy, right next to Chinatown. It’s a Bohemian and touristy part of the City, which at one point or another served as a hangout for Marilyn Monroe and Joe Di Maggio, and of course, the titan of the Beat Generation, Jack Kerouac.
It was here that Kerouac got inspired for his seminal novel On the Road, which he wrote in 1951, in only three weeks, typing it out on a 120-foot scroll. Caffé Trieste, City Lights Books and the colorful corner of Grant and Green–not just a tribute to the famous jazz guitarist–are a few other places you should keep on your short list next time you visit.
As for us, we will be back soon.
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After so much education it was time to get the lay of the land. Beginning in the 1960s, the orchards of Santa Clara Valley morphed into Silicon Valley–into office buildings, strip malls, and parking lots. In other words: a concrete jungle. But when you drive by Apple, Google, Yahoo, Cisco, or HP, it is easy to feel the rush by thinking about the possibilities. Steve, Sergey & Larry, or Jerry, they all once were in our shoes. Consequently, every other person you encounter on the street is, was, or will be involved in a startup.
We had a few more meetings on the calendar that day, so we hit El Camino south to Mountain View, to look around (and dream big). Gas was cheap – by European standards – and roads were wide, but not necessarily pristine. Some stretches along the freeways were filthy with garbage and often the pavement was loose or rutted from years of relentless traffic. To avoid the sticky spots, log on to Metropolitan Transport Commission or call 5-1-1 for free, real-time traffic updates. Inevitably, the road took us past the Postal Annex, a place that is useful in more than one way, as Malte found out.
Later, on the campus of San Jose State, we met Jan Beckers, a German Web entrepreneur, who despite his youth already has founded several, businesses. Jan is spending a few months in the area to get inspired for his next venture before he is moving to Shanghai, “to connect the dots, from Germany, to Silicon Valley, to China.”
As we worked our way back toward San Francisco we also met a funding consultant – @ Starbucks, of course. It was a nice and informal conversation, a friendly ping-pong of questions and answers. There were no commitments or promises, however a few days later we received a retainer agreement for the consultant’s services during completion of seed, Series A and Series B funding, which included a three-day coaching session, set-up of investor meetings and assistance with term sheet and close.
This retainer was followed by a warrant to buy shares of common stock in iliketotallyloveit.com, which turned out invalid for our current form of corporation. This can get really confusing, really fast. How do you value shares in your own company? How many shares would you even want to sell at such an early stage? There are no patent answers, but a mistake here will get expensive later on. Click around to get an idea about the issues and know where you can call for advice before the dance gets hot.
It was a long day and we were in no mood for commute traffic, so we picked Tandoori Oven, an Indian fast-food joint in P.A. to unwind. Little did Malte know that the hardest piece of work was still ahead of him: Parking on Russian Hill, one of the steeper inclines in all of San Francisco. It’s like parking in Paris, except that you can’t push the cars in front or behind you to make more room, because all drivers in this town curb their wheels. Religiously. How did he do? See below (photographed with a spy cam). If you are a sucker for tight-parking videos, here is your fix.
In the final instalment of this four-part blog series you’ll learn about wild parrots and Kerouac’s old haunts, plus you’ll meet some Valley veterans with ties to a company that started more than online shopping.
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Downtown San Francisco, 7 a.m. on a Tuesday in March. What a grand time to see the city, stretching, yawning, waking up. The streets were empty, the parking was plenty and the meters did not yet scream for money. The weather was clear and the sun was not just an option. Winter as you know it simply doesn’t happen here. By noon we’d be in shirtsleeves.
Only the early birds in need of their Java drifted into Café Algiers on Beale, arguably the best café and coffee in this part of town. I was standing at the curb, sipping cappuccino and waiting for Malte in his little red rental. Up to that point we were “digital” colleagues, who had worked together across nine time zones. Now we were about to find out how closely photos match reality. A red Versa zipped by, but it didn’t pull over. Then the phone rang. “Uhm, I think I just passed you…” Yes, you did.
But streets in grid patterns don’t require GPS navigation, so a minute later we shook hands and hit 101 South, heading to Palo Alto, for our first meeting in the Valley. Although the notorious commute traffic wasn’t bad, we decided to take 280 to avoid the slow patches around SFO. Malte showed some German driving finesse while getting the hang of operating a car that has no clutch pedal.
Except for a dead Daimler on the off-ramp at Page Mill Road, there was nothing to slow us down. Hence we showed up early for the OpenCoffee Meetup at Deuce France, a French bakery near the Stanford campus. College kids behind MacBooks, moms behind strollers … nobody looked like they were looking for investors. Could it be that we were we the only ones?
Finally we found the meetings’ host, Keith Teare, sitting outside, by himself, quite casual. We introduced ourselves and business cards changed hands. Indeed, iliketotallyloveit was the only outfit present, so finally, we were in the spotlight;-) Then it was time to sit still and listen to a serial entrepreneur who started in the UK with cScape in the 1980s and never stopped. Among many other ventures he was also involved with VeriSign, edgeio, and Techcrunch. Currently he’s president at fotonauts, a new company he declined to discuss in detail, except that it was founded by Jean-Marie Hullot, a French computer scientist, who had worked at Apple and NeXT Software.
Keith knows a thing or two about fundraising, getting companies off the ground, and getting prepped for investor meetings. Good thing we brought note pads and a pencil sharpener. He offered many useful thoughts, but only one message: Think Big. To paraphrase: “This is Silicon Valley, where dreams are huge and competition is fierce. Nobody wants to waste time with peanuts.”
We were lucky to get his undivided attention, because normally he is surrounded by half a dozen (or more) budding entrepreneurs. When we walked away, we didn’t feel stupid, but thought we had learned a few things that might prove helpful as we work to grow iliketotallyloveit into the Next Big Thing. Beside the balmy noontime temperature in Silicon Valley we had other reasons to roll up those shirtsleeves….
Up next: Scouting locations, a German Web entrepreneur, and an angel investor at Starbucks.
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No matter what they tell you, finding cash to run the show is not a cakewalk. This dawned on me during my last US trip, long before I ever talked to potential investors. My main enemy? Winter. On my way over to NYC with Con Air, the pilot had to pit in Newfoundland to refuel. Their math was off, because they “did not anticipate such strong headwinds.” Whaaat?
Then I wondered what else they might miscalculate. Takeoff speed? Runway length? Crosswinds? My confidence was in the toilet, and the fact that there would be more trips with them on this trip didn’t help. Also wondered if Zen was available as a pill, and if it could kill Prozac.
Finally Newark, with an epic delay. I switch on my phone, more bad news: Mashable’s Mashmeet Remix NY postponed. Great. At least I wasn’t late. But my lousy luck would hold. China Town Bus to Boston. Another call. Another canceled meeting. Snow, blah, blah, blah. Note to self: Must look into mashing up good weather forecasts with good social networking apps.
That left some time to browse an Apple Store in Beantown and confirm the myth about people working there, but not for Apple. I felt like Hank, the protagonist in Californication, who wrote an editorial at the Apple Store in Santa Monica.
Camouflaged by European tourists who were flush with cash (easy when 1 Euro equals $1.50) and kept milling around to buy more gadgets, I commandeered a MacBook Air and got a lot of work done. Thanks, Steve. You saved me from god awful Starbucks and having to hack their WiFi access …
Stay tuned for the next adventure.
Off to the West Coast.
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The steep hills of San Francisco aren’t just challenging for parking, they are synonymous for the steep climb start-up companies are facing in a place that’s perfect for surfing and riding bicycles and, as we have learned, for growing a business. Fellow entrepreneurs, venture capitalists, industry analysts, social events, conferences, it all happens in this neighborhood. However, there are many competitors in the race for funds, so you have to run fast to get there first. And while you do that as a frugal startup artist, you’ll be spending some bucks.
Luckily, there are escapes. At the bar of the posh St. Regis Hotel, next door to the Museum of Modern Art, we connected with David Silverman, a colleague from the early days of electronic commerce at Intershop, who now is with Aggregate Knowledge, a company that connects consumers to hot products, interesting content and cool items. Joining us was Michelle Gildersleeve, who also worked at Intershop and now is with a small outfit called Oracle 
It was here that Kerouac got inspired for his seminal novel On the Road, which he wrote in 1951, in only three weeks, typing it out on a 120-foot scroll. Caffé Trieste, City Lights Books and the colorful corner of Grant and Green–not just a tribute to the famous jazz guitarist–are a few other places you should keep on your short list next time you visit.
