“The last few years have been a roller coaster,” says Valentin Smirnoff over a cup of coffee in a Starbucks in San Mateo, a small town near San Francisco. Smirnoff hopped onto that roller coaster in 2011, when his internet startup Tinypay landed one million dollars in funding from a Turkish investor and he moved to Silicon Valley. Since then, he’s weathered victories and defeats, and he’s once again brimming with new plans.
Smirnoff has been creating websites since he was twelve. Even while he was studying for a degree in communication and design management in the Netherlands, he was secretly more interested in his own web design agency. After graduation, he founded several companies. One of them created the MoneyMedic web application, which enables small companies to do their own bookkeeping free of charge.
Glad to See You Succeed
With friends Melvin Tercan and Richard Straver, Smirnoff developed Tinypay.me, a site that enables users to buy and sell items through a PayPal account. Anyone can set up shop in less than a minute at the Tinypay website, including instant guidance on using social media to market your wares. Tinypay has over 40,000 users.
Smirnoff knew from the start that his decision to move to Silicon Valley was a good one. “Here, you can accomplish a lot in a short time with hard work. In the beginning, I attended every single event to network. The openness of people here is very refreshing. People want you to succeed, and it’s easier to close a deal when people believe in you. The Dutch are often more skeptical.” For example, when PayPal, headquartered in San Jose, heard that the young Dutch entrepreneurs’ startup worked completely through their payment service, they immediately asked Tinypay to join them at a trade show.
But Smirnoff also knew how important it was to find new investors once he arrived in Silicon Valley. He admits that to date, Tinypay has had a hard time turning a profit. “We spent a lot of time on development. It’s a free service, and all that time we thought we’d be better off adding in a revenue model once we had enough users.” Tinypay began with nine employees in an office in downtown San Francisco; now it’s just Smirnoff and Tercan, and for the time being, no office.
Differing Capital Markets
“We learned a great deal during that process,” says Smirnoff, who is now working on new projects in addition to Tinypay. One such project is Marketpage, a Facebook application. Using Marketpage, anyone with enough fans, such as artists and companies, can grant others permission to sell items on their fan page. The entrepreneurs convinced rapper Snoop Dogg to become the app’s first user. Smirnoff is currently seeking additional financing for Marketpage.
Being in Silicon Valley is a plus where that’s concerned, Smirnoff says. He describes his experience of the differences between the capital markets in the Netherlands and in Silicon Valley. “In the Netherlands, you have to borrow money from the bank. That doesn’t stimulate entrepreneurship.” For MoneyMedic, he submitted a request for the government to underwrite the loan. It turned out to be a complex procedure. “We finally got the money, but it took us two and a half years, and by that time, we were already working on the next project.”
Smirnoff sees many more opportunities to raise money for companies in Silicon Valley. Despite the early years filled with ups and downs, running a business in the Bay Area is still the stuff of his dreams. “I feel at home here.”