Taking the Pulse of Silicon Valley - Page 2

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What to expect and lessons learned

In either case, don't expect instant success – a sentiment other panelists agreed with. "A startup is the ultimate high and low. It's a binary thing – either it works or it doesn't," he said. Frid-Neilsen recalled an earlier venture required his startup team of ten people to go nine months without salary. "That's what it takes, but here in the Valley, a poor entrepreneur is kind of cool."

Coelius-Keplinger agreed. "If you failed in a bunch of startups, you can sell that," she said, noting investors often appreciate a more battle-tested team. She also mentioned Venture Hacks as a good resource for those seeking advice on funding.

Among lessons learned, Aurelien said Gazelle took too long to release the version of its service. "We were trying to get it perfect, maybe that's an east coast thing," he said. "Now every three weeks we have something new. We look at it more like a living organism that's influenced by users."

Puneet Gupta, CEO of Connectbeam, said he's been surprised how far his company's been able to leverage social networks. Connectbeam itself provides social networking software for enterprises. He said, for example, a blog post about one of their customers, drug giant Pfizer, got the attention of Bayer, which then signed up as well.

All the panelists said they had patents or patents pending on their technology. Aurelien said his company spent $200,000 to file six patents. "I don't know if we'll benefit from it, but our investors insisted on it."

But Frid-Neilsen said patents are a must. Plastic Logic's Archuleta agreed. "We have 80 patents pending and 20 granted. IP is our core value."

People, people …people?

Moderator and tech veteran Guy Kawasaki, took issue with one panelist's suggestion that people are the most important asset in a startup.

"Every time I do one of these panels I hear that advice. What are you going to do, hire crappy people?" The problem, he said, "is you don't know how good they are till you've worked with them for at least a year."

And it may be at least a year until we see another boom in Silicon Valley. Audience members looking for a quick fix to the economic problems affecting even this tech Mecca took note of Frid-Neilsen's most optimistic prediction:

"I still think 2010 will be a great year in the Valley," he said.