Patrick's New Year Review #1

Patrick's New Year Review #1

17-Dec-2012 by Startupbootcamp

Hello from The Netherlands.

With less than 30 Days left to apply for Startupbootcamp Amsterdam, I thought you might like to hear about some trends that are emerging. They might help you make the right choices for your tech startup.

Making the right choice!

Each day, each Startupbootcamp program gets dozens of applications from startups from around the world.

As well as applications, we’re also getting a stream of clear, critical questions from startups. Teams clearly want to know: world. It is clear to us that most people understand why they are applying for an accelerator program.

– more details on the accelerator program content

– does the fact that they have already received angel or even VC funding disqualify their team from applying

– if the €15.000 funding we provide will affect their overall valuation etc…

– what are the results of such an accelerator program

– more about the added value an accelerator provides to startups

– if they are the really right kind of startups for the program

– if they are too early or too late stage for the program

– what the main goal of the program is

– if they will receive other funding during or after the program

– what is the motivation for you guys do this?

So let me answer some of these frequently asked questions:

Why do you guys do this?

Companies and corporations the world over are discovering that their existing strategies and structures no longer perform well in a continually changing world. Small teams of entrepreneurs working with lean, connected resources have disrupted many traditional industries. Apple, Google, Soundcloud, Spotify, Paypal, Facebook and Twitter are just some of the better-known examples.

At Startupbootcamp, we believe that a new approach is needed now. We’re a connected group who operate in a purely digital environment. And we’re convinced that successful startup communities can only be led by experienced entrepreneurs. New companies need access to a pro-active ecosystem, so that great ideas turn into great companies.

We believe we are building the innovation hubs of the 21st century, accelerating young companies as they search for sustainable business models.

We’re passionate about entrepreneurship. That’s because we’ve all had experience of running a business ourselves. We understand the thrill when a plan comes together, but we also have been through times when plans fall apart.

We believe that next generation of entrepreneurs will benefit when we give back to the community and help others do things better and faster than they can do on their own. In each of the cities in which we run an accelerator program, we have a pool of 150+ top mentors which we can tap for a specific program. They represent leading edge talent with a wide range of expertise. They all get something out of the time that they donate to the program. Sometimes it is a new perspective on things. Others do it because they like new challenges. But everyone is motivated by the desire to see your new company succeed!

You provide us with €15.000 in return for 8% of the equity. But we have already received some funding based on a higher valuation!

The €15K we provide during the program is merely a contribution towards living expenses to help sustain a team of 2-4 people for the 3-6 months that you will spend in our city. We’ve done our utmost to keep your costs to a minimum – including free office space, and low cost accommodation. So, do not see this money as a valuation of your company at ± €200,000.

In fact, at this stage, we are not wasting anyone’s time trying to value your company. That would be impossible.

At the same time, the €15K is not a subsidy to help extend the life of a struggling company. So the promise of getting €15K into your company’s bank account is the last reason to apply for our accelerator program.

The precise value we add is difficult to describe and quantify. It varies from startup to startup. Several companies who have participated in previous programs (we call them alumni) tell us they would not be as strong today if they had not participated in the program.

Take a look at testimonials they have given us. Most find tremendous value in the credibility such a program brings – it opens doors to discussions with experts and investors which would be very difficult otherwise. The mentors and advisors know how hard it is to get selected for the Startupbootcamp program. They may well have been involved in the selection process. Startupbootcamp increases the chances of getting Angel or VC funding tremendously because of the exposure startups get, both in the media and in closed sessions (sneak previews) with selected investors.

We believe that that 8% equity is a fair percentage. It enables us to put together a professional quality program. At the same time, it ensures a sustainable business model for the program in the long term. Others ask for much more. Ask them how they come up with their figures. Then decide for yourselves.

What is the main goal of the program?

Aha! Another good question. But one which I can’t answer. It is actually one that you need to ask and get a clear answer from your own team.

If you have any doubts as to what you’re aiming for, then you are probably not gone get the most out of any accelerator program. Each of the other 9 teams in the program is likely to have a different set of objectives. It is quite normal to find that “acceleration” means something else for every team. But once you decide and define what exactly those goals are for your startup, we’ll do everything possible to realise those goals with your teams.

My Views on Recent Trends

I’ve done a lot of travelling recently, participating in several judging panels for other Startupbootcamp accelerators and colleague programs. Let me share a few observations.

  1. I see more and more later stage startups applying for accelerator programs. Do they still qualify?
  • It is true that some teams get stuck. For whatever reason, real progress is slower than expected. I see more teams that have already received angel or even VC funding deciding to apply for a startup accelerator program There are different reasons for this development.
  • No-one denies that is really hard to launch a company with a scalable business model and product. Many teams lack specific know-how a strong network, and the right mentorship to scale up locally and internationally. They feel that a startup accelerator could give them just the boost they need to get back on course. From our side, we do not penalize applications who have already picked up funding. But we will check carefully what has held up progress so far. If asked, we will give our honest feedback about whether the problem can be fixed and whether acceleration would really benefit your startup.

  1. Are we aware of the Series A crunch that’s going on?
  • YES. Getting angel funding is one challenge. But moving on to a Series A, when you have little market traction and lots of competition from companies at a similar funding stage is tough. No-one said it was going to be easy!

    Startupbootcamp is different from other accelerators in that it doesn’t all stop on Demo Day. In fact, we’re aware that for start-ups, that’s when the crucial talks with investors really start. It’s for this reason that we have developed an Alumni Growth Program and recently appointed an Alumni Director, someone with a huge amount of experience in helping start-ups get to the next round of funding.

  1. I see 2nd or 3rd time (serial)entrepreneurs applying for our programs.
  • We note in the current list applications from team members who are on their second, third or even fourth startup. There are also applicants who have just successfully exited. So what is driving them to apply to Startupbootcamp? When we challenge them during Open Pitch Days, they come back with similar answers.

  • It is extraordinarily difficult to go from great idea to real world product, especially when the idea has not yet been validated by the people who will pay for the business growth – the customer. It is even more difficult to create a great company that operates on an international scale out of a (great) product. Startup teams are rarely able to do this on their own. They get access to relevant expertise in an accelerator program like ours. They already understand the value of a strong advisory board what their strong contact network provides to a startup.
  • I am seeing several 2nd time entrepreneurs wanting to move into completely new market. They sense an opportunity, but lack in depth business intelligence and/or relevant contacts. An accelerator puts you in the spotlight, which can lead to market interest from investors, publishers, journalists, future employees etc. Several good arguments in fact to apply for a program.
  1. I see startups that go from one accelerator program to the other program.
  • Program hopping seems to be happening more and more. I’m concerned that not all startups are doing this for the right reasons. Unsolved problems faced in a first accelerator are rarely solved by trying again in another city.

    That brings me back to the Alumni Growth program, which guides our teams beyond the 3 months “fade out and funding cycle” which follows Demo Day. In addition to practical problem solving, we advise every start-up to implement an active Advisory board. These are active people, not (just) figureheads who help them make progress. I would say that going from one program to the other is not advisable unless in exceptional circumstances. Even then, the next program has to fit perfectly to the next level of challenges facing the startup. This could be on customer development and sales execution.

  1. Where are the answers to the other questions?

They’re on our website. Yes, it does mean reading through some text to find the answers. But we find this to be an excellent filter. We’re looking for people who are curious enough to do their own research. It is an essential quality in discovering who your customers will be. So do spend a little time reading the manual! That information is out there for a reason.

We know there are plenty of accelerator programs out there. Let me share some insider tips to help you decide which accelerator programs to apply for.

  1. 1. Nothing beats thorough research!
  • Find out who is running the program. Find an opportunity to talk to the program management. That means taking time to prepare for any pitch events or visiting the startup events. .Examine the program management’s background. Have they been entrepreneurs themselves? What is their track record? What are others saying about them? Scan their site, but also LinkedIn for references.
  • Talk to alumni that have gone through the program. How do they perceive the program, what value has it added to their team as well as their business? Most alumni respond best to short, concise questions. They don’t need a penpal. But they are usually responsive to genuine requests for information. Remember that some of the testimonials are already posted online.
  • Remember that it is the quality of the mentors that make a huge difference to any accelerator program. Look at the mentor profiles. Do they have expertise that you need? If you got on the program, which five mentors would you like to talk to first – and why?
  • Study the funding percentage of the program, how many teams got funded during or after the program? Are they creating jobs? Are teams sticking around after the program?
    • o Professor Yael Hochberg, is the administrator of the annual US National Seed Accelerator Rankings published by TechCocktail.
    • o Jed Christiansen is founder and operator of Seed-Db.com
    • o In a recent interview with the Global Accelerator Network both experts agree: “The accelerators who perform well typically share their results freely, whereas the accelerators who are hesitant to show data are typically underperforming or new to the industry”.
  1. 2. After completing your research, make a shortlist of your top 3 accelerator programs. Then apply to each of these 3 programs
  • Keep in mind that, on average, a top-flight professional accelerator program receives between 400 and 700 applications for each program. Only 10 teams get selected. So it is no problem to apply for multiple programs.
  1. 3. Apply early! Latecomers Lose Out.
  • Stand out from the others. Remember many applications at an accelerator program come in during the last week before applications closing. My advice is to apply early, even if you have not yet finalised everything (like getting a video pitch ready). Fill in what you can and consider applying for one of the on-line pitching sessions. That’s a great chance to ask open questions to the program organisers and some of the lead mentors. They may come back with advice and suggestions that can improve your chances of getting selected. You still have time to tweak the application. In the period from 8 to 2 weeks before applications close, the program management and their mentors usually have more time available. They are watching the incoming applications and may already approach you for an initial conversation. Remember, they can only do this when they know you are applying for the program.
  • At Startupbootcamp Amsterdam, the 19th of the month has become a day for Open Pitches, either in person or via Skype. Those who have applied early have encouraged us to continue with this great opportunity to learn more about applicants and watch their progress.
  • Technical tip: Make sure you have a reasonably fast/stable Internet connection before trying to pitch over Skype.
  • Remember, the closing date for applications for the Amsterdam 2013 program is January 20th 2013. That’s a firm date because we want to be fair to others. Don’t leave it until the last minute! You can apply here during the Christmas period 😉

http://www.f6s.com/startupbootcampamsterdam2013app#programs/ajax-application

On behalf of the management team in Startupbootcamp Amsterdam, and my colleagues at our other 4 accelerator programs, I wish you a great start to 2013. I hope these few lines are useful in making the right choice for your team. May be you’ll be one of the 10 teams we see in Amsterdam in the New Year and pitch on 28th June on at an other amazing Demo Day.

Do check out the other great Startupbootcamp programs running in Berlin, Dublin (applications close Dec. 23th 2012), Copenhagen or Haifa.

Seasons’ Greetings

Patrick de Zeeuw

Co-Founder Startupbootcamp

Startupbootcamp helps ambitious founders scale. Our global family of 20+ industry-focused programs supports startups with direct access to an international network of the most relevant mentors, partners and investors to help them scale.