April, 2010

posts — 4 Comments
19
Apr 10

More startup accelerators – the list of programs grows from 77 to 93

It’s been a busy month or so in the accelerator space – there are quite a few new accelerators that I’ve come across to add to the master list since it was last updated. The list pre-update was 77 programs long; with this update there are now 93 on the list.

First, some noteworthy accelerator news:

  • Lots of rumblings around BootupLabs in Vancouver. Check out the detailed post here.
  • A new seed investment model came on the scene: Right Side Capital, apparently coming in the 2nd half of 2010, the program will be making 100 – 200 investments annually. Not only is the volume a differentiator, but the fund will also be providing support through an advisory board, a model necessitated by the large number of startups that will be passing through the program. TechCrunch provided this: “Kevin Dick says that they will set up educational sessions and events for portfolio companies, but will not be able to provide significant one-to-one mentoring for early-stage companies.” So, how much of an accelerator versus an investment engine Right Side Capital will be remains to be seen. More in this blog post.
  • Launchbox Digital is opening an office in the RTP area. Based on other articles, it seems that what’s happening is the existing Triangle Startup Factory is being “folded into” Launchbox Digital’s program in RTP and the founder of Triangle Startup Factory, Chris Heivly, will run the RTP branch. Is this be the first merger of accelerator programs? Is this a space that we’ll see further consolidation in?
  • IBM is launching its own startup accelerator, IBM Smartcamp, to help the tech giant partner with startups development the technology critical for IBM’s ‘smarter planet’ initiative. A specific post about this here.
  • Some details emerged on the Start VI program from Belfast. First, the meaning of the ‘six’ in the name: “…that ‘SIX’ ‚… it’s six companies, for six months at 6%.” Also, the program will be virtual: “StartVI is also virtual. (Another play on ‘VI’=Virtual Incubator). … meeting, conferencing, mentoring, presenting, discussing, deciding can all be achieved without face-to-face contact. That’s not to say there won’t be any in-person contact-just that lacking it won’t stop progress. Eliminating the tyranny of time and distance-shifts enables StartVI to bring mentors and advisors from around the world to bear on StartVI companies. A small, but enthusiastic group of successful entrepreneurs and executives from Silicon Valley have already offered their time to support this effort.” It will be interesting to hear what entrepreneurs participating in the program think of this model.
  • Interestingly, a program has been launched that falls into both the Social Entrepreneurship and University-Affiliated categories – and it’s based in one of my favorite places, Bar Harbor, ME! The College of the Atlantic recently announced its new Sustainable Ventures Incubator
  • And the launch of another program in Utah (two are being added to the list this month): Startup Utah — an interesting sidetone, though – either they’re confused about the location they’re running the program at or either they copied the app form from TechRanch or they’re running Startup Utah from Austin? Not sure, but their application form mentions Austin, TX: Application Form Here
  • The Houston Chronicle reported that an accelerator program may be launching in the city in time for the summer.
  • New possible accelerator coming in Montreal, Canada – FounderFuel Ventures
  • Not an addition per se, but some accelerator news: The Difference Engine is following its teams and compiling a video series similar to TechStars.TV about the process. Watch it here: http://thedifferenceengine.eu/tv/

Now for the programs being added:

Seed-Stage Accelerators

posts — 3 Comments
15
Apr 10

How not to run your accelerator for startups

Lots of rumblings in the startup accelerator world today about Bootup Labs in Vancouver. Unfortunately, it’s a cautionary tale for founders.

Statusly founder Jaime Martin blogged that his company had been removed from Bootup Labs:

“…Danny Robinson calls us into his office and tells us what we were so scared was going to happen, he tells us that they weren’t able to secure as much money as they originally anticipated. Basically that they’re really embarrassed, that they’re going to have to let us go…”

Jaime describes how his team moved to Vancouver on a handshake deal with Bootup, was then initially told their was a delay with closing the funding, but that the funding never arrived. A few short months after starting what was supposed to be an 8-month – $150,000 program, they were out with nowhere to turn…

 

The early stage startup world is a small one. Accelerators build their reputation slowly, one successful funding, sustainable business model, or exit at a time. The decision to give up equity is a tough calculation – for accelerators, though, the cost/benefit analysis has always been skewed heavily in their favor by the huge benefits and successful track record of the programs. And founders clearly take on a lot of risk by picking up shop and leaving home/jobs/life to participate in the accelerator programs.

Clearly, it’s reasonable to expect that out of the 70 some accelerators programs, a few here or there might not be able to live up to their grand visions. However, when that happens, being created for founders by founders, you’d expect that the response from the accelerators would be quite apologetic, at the very least. In this case, that’s not the way it was handled and it’s made a bad situation worse, for both founder and accelerator.

Jaime’s position could have been most any founder and the startup crowd clearly feels for him (rightly so), based on the comments over at Hacker News.

Unfortunately, this story demonstrates the value of an accelerator program’s strong track record (and that of any investor), beyond the exits and fundings.  Make sure you talk to founders who received investment from the accelerator or fund to find out what things are really like after you take money.  Once you do, there is no undo button.  (This being the first cohort of Bootup, unfortunately, it wasn’t possible for Jaime to talk to startups who had been through Bootup before.)  Like so many other things, too, this shows the importance of handling situations the right way – startup founders, probably moreso than many others, understand that life happens and it doesn’t always go according to plan. But if that does happen, a little help and a lot less bluster would have gone a long way in this situation (despite TechCrunch comments to the contrary). The Google Shrine will preserve these posts and comments for future founders looking into Bootup. Clearly, if money is offered, someone will probably take it, but at least now, they’ll be able to do so with their eyes a bit more open.

Good luck to Jaime – the early stage startup world feels for him – it could have easily been any one of us…

 

For balance and the other side of the story, so you can make up your own mind, here are the other relevant links: Bootup posted their press release, and a move favorable account (for Bootup) of the story is on TechVibes (plus ReadWriteWeb has a totally backwards view of the situation).  Also: comments from one of the Bootup founders.

posts — 6 Comments
14
Apr 10

Are We Actually Creating Startups Through Business Plan Competitions?

As a recent judge for Temple University’s ‘Be Your Own Boss’ business plan competition and having advised the winning team for Penn State’s IdeaPitch competition, I was afforded the perspective of seeing both ends of the typical higher education business plan contest. As a result, I’ve been thinking a lot about business plan competitions recently. In short, it’s very clear that judging a team’s ability to put together a business plan versus creating a sustainable business are two very distinct things.

Vivek Wadhwa has some very interesting commentary on the subject on TechCrunch from November.

First, the good — most of these competitions are run under the auspices of helping to inspire entrepreneurship. Wadhwa says “This is not to say [I think] the contests are bad. [T]hey educate students in entrepreneurship and motivate them to come up with interesting ideas.” Also, here’s a quote from the MIT $100K’s site: “The MIT $100K Entrepreneurship Competition is a year-long educational experience designed to encourage students and researchers in the MIT community to act on their talent, ideas and energy to produce tomorrow’s leading firms.” For sure, motivating students to explore entrepreneurship is a good thing (and one that I put a lot of effort into!!).

However, I think that if you’re going to do something, you should do it in the most effective way possible, especially with the resources, publicity, and sponsorship dollars at play here. But, instead, business plan competitions are tired, old and out-of-date. And, for an excellent pairing, you have, of course, the criticism that the results are rather dubious…

Instead, this NY Times blog post gets to what I think the real root cause of the issues with most competitions: “…Kirstie Chadwick, a tech entrepreneur and director of the University of Central Florida’s Venture Lab, fears that the myriad business plan competitions and related events cropping up around the world are less about helping start-ups and more about schools and other competition organizers ‘keeping up with the Joneses.’” Indeed – the huge prizes that are awarded make for great PR, not just for the teams that participate, but for the schools. (“Look {insert name of prospective student here}! See how much money School X is giving to these entrepreneurs?! This is certainly the right place for you to learn that trendy thing called entrepreneurship!”)

But setting that aside – if a school really wanted to create some buzz, what about launching an initiative that actually helped students become better entrepreneurs, rather than just write good business plans?

The seed-stage startup accelerator model seems to work. Just look at the TechStars results. Y Combinator and other results are here (click through the tabs).

Instead of giving a huge chunk of money to the one winning team, what about setting up a university-wide program to funnel teams with ideas into an accelerator-style program? Give each qualified team a little bit of funding for the semester and have them go out and prove their idea is feasible. But don’t just drop them off into the deep end – connect them with the mentors and resources that they need to be able to do this successfully (I bet you that most don’t know where to turn with their ideas). Explain ghetto testing, MVP, and (please! get these students out talking with customers!) customer development.

To be fair, some business plan competitions do connect the teams competing with mentors and other resources. Certainly an event with as much press as the MIT $100K event also attracts a lot of nice PR for the winning companies (though there are reasons to not want this).

However, even the teams that do win come out of the typical business plan competition without a clear understanding for how they should move forward. I think this is a tragic missed opportunity. Let’s get rid of the old model, and stop wasting those hard-earned sponsor dollars – seize the opportunity and use a model that actually can help these bright motivated students become entrepreneurs.

posts — 1 Comment
13
Apr 10

Invitations are a wall

Grungy WallI’ve stumbled across countless startups via Twitter, TechCrunch, etc. that sound interesting. I go to their site and find a beta wall requesting an invite code.

Like any good early adopter, I put in my email and close the browser window. A week or so later (sometimes much, much longer), when the founders get around to sending out the invitation, I get a fairly non-descript invitation from a strange company name in my inbox. All of the initial motivation that I had to check out the site is gone and more than likely, I’ve forgotten what this particular startup does (given that startup names are so random these days, due to domain availability…).

I realize that invitation walls are sometimes necessary, but when you finally do get around to sending out the invitation, please remind me who you are and why I should care (again)!

penn state / posts — 1 Comment
13
Apr 10

Penn State Entrepreneurs Network – Annual Networking Dinner this Wednesday

The annual Penn State Entrepreneurs Network’s Networking Dinner is this Wednesday at the Atherton Hotel. Open to all in the PSU community interested in entrepreneurship, the dinner is typically a fun and useful event. Unfortunately, I’ll be unable to attend this year, but I wanted to help them spread the word.

Here are the details, from the event on Facebook:

Date: Wednesday, April 14, 2010
Time: 6:00pm – 9:00pm
Location: Atherton Hotel

Description

Please join the Penn State Entrepreneurs Network for our 2nd annual spring semester networking dinner at the Atherton Hotel. We will be hosting various faculty from across the Penn State entrepreneurial community, in addition to MBA and undergraduate entrepreneurs. This would be a great opportunity to meet professors with expertise in the small business and start-up world, in addition to students looking to form the next great Penn State start-up!

The cost will be $10 per student will cover a full buffet, complete with 2 main dishes, salads, and dessert.

Guest speaker Dr. David Cannon will discuss Ocean Resource Balancing (ORB) for Hurricane Abatement and Global Climate Maintenance With Related Ocean Entrepreneurship Opportunities.

RSVP here on Facebook.

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