In 2015 and 2016, Techstars ran the first two programs focused on hospitality with our partner, METRO, Europe’s largest wholesaler to restaurants and hotels.
The 21 companies that went through the programs have now raised over $50 million in capital. While this is very exciting, we are anticipating another benefit that we think can add serious value to startups: lead generation.
Over the last year, METRO has quietly been building up the Horeca.Digital unit. This subsidiary markets digital solutions to restaurants and hotels across five countries in Europe (Germany, France, Austria, Italy, and Spain). In those five countries, there is a dedicated sales force that does nothing but market digital products.
Now, every startup that goes through the METRO Accelerator for Hospitality, Powered by Techstars has the opportunity to run a pilot with Horeca.Digital. In this pilot, we test lead generation of the product with the Horeca.Digital sales force. If successful, there is potential for a multi-year lead generation agreement.
Over the last month, Horeca.Digital has delivered over 1,000 warm leads to one startup with which they have just signed a deal. Now this company has been scrambling to hire salespeople. What a problem to have!
If you run a startup where your product is aimed towards restaurants or hotels, you should apply for this program. Here are the details of what you’ll receive:
- An offer of 120.000€ of investment
- Mentorship from and access to key METRO and Techstars executives and leaders, other hospitality industry leaders, venture capitalists, and experienced entrepreneur
- An opportunity to test with METRO lead generation of your product to restaurants or hotels in one country (Germany, France, Austria, Italy, or Spain)
- Free dedicated working space in the heart of Berlin for the duration of the program
- A Demo Day in December 2017, where each team will present their company and product to hundreds of investors
- The chance to become a member of the METRO and Techstars alumni network for life
If you are interested in joining the METRO Accelerator for Hospitality, Powered by Techstars, apply before the final deadline on June 18th. If you apply before April 30th, we will be able to help give you feedback on your application.
From Startup Weekend organiser… to Community Leader… to Techstars Associate. How Maciej Jankowski from Poland has truly embarked on the Entrepreneur’s Journey.
Maciej Jankowski first became involved in developing the local startup/tech community in his hometown Szczecin (Poland) in 2007, when he started organising Netcamp meetups. Events grew quickly and 3 years later became a base to launch Netcamp Foundation, a local NGO supporting development of startup ecosystem and tech education.
It wasn’t until April 2011 when Maciej met Jarek Białek who took part in Startup Weekend Eindhoven a few months before when he was inspired to organize SW in Poland. He was very impressed about the benefits it gave to entrepreneurs.
After Startup Weekend Warsaw, Maciej in Szczecin in October 2011, he decided to co-organised the 3rd Startup Weekend in Poland. He decided to organise the first Polish-German event, in order to start a cooperation with the Berlin startup community. This way a great way to show that the nationality of founders is not important when solving technological problems and creating new companies. The winner of that event–Scatchup– won all 3 categories, then raised around €200k seed investment from HackFwd after just 6 months moved to Berlin.
Maciej was already hooked to the wonderful world of Startup Weekend. It was after his second event, that he realised the most important thing to him was the impact the events had in fostering local startup ecosystems. It is a fact that most of the teams after a Startup Weekend event split up. However, many participants stay involved in the community and often get involved in other projects with people they worked with during the event. In the 2nd edition of Startup Weekend Szczecin, a young team from Wroclaw received a special award from some of the mentors, and were invited to an acceleration program in Gdansk.
Despite the first event’s success, the next Startup Weekend event in Szczecin took 4 years to happen. The problem was building a new organising team, as Jarek, one of the lead organisers, had moved to another city. The next event therefore took place in 2015, and in the meantime, Maciej organized Nethack and other city focused hackathons, whilst also focusing on building the TEDx community in his city.
In September 2016, Maciej got accepted as Techstars Associate in the METRO Berlin Program, he travelled to Spain to speak at a conference there, went on to Warsaw to attend the Techstars Europe Unsummit, and ended up starting his exciting new journey in Berlin a few days later.
“It’s a really intensive program, especially for founders,” he said. For Maciej in particular it was also intense as he was participating in three Techstars programs in parallel–coordinating Startup Weekend Szczecin – Smart City/IoT back home, working as an associate in Berlin and becoming a volunteer for the pilot of the Startup Next mobility edition with Ford. Those 2 months were very busy for him –working 15 hours per day both helping founders and also leading his Startup Weekend team, making the two hour drive back to Szczecin each weekend to meet with them.
During the METRO program in Berlin, Maciej was very surprised because half of the associates team were from the US. They had moved just to join the program. A really important take away was to see how entrepreneurs from different countries build startups and the sort of problems they want to solve based on their local communities. It really doesn’t matter if you live in Canada or Australia when it comes to the way you build your startup.
An interesting part for him was being involved in the mentor madness sessions–2 full weeks with mentors talking with founders to give their advice and feedback. Maciej loved the vibrant feeling of Berlin, the startup ecosystem and many startup events gave him a global perspective on Startups and what’s going on in the startup world.
One of Maciej’s favourite moments was one of his first successes in the program. Every Thursday there was ‘social thursday’– in the METRO program each associate had to organise one of them. When it was his turn, he organised it based on the feedback of the participants and it turned out to be one of the best social thursdays, playing pool and integrating in one of Berlin’s awesome clubs. Another highlight was standing on stage during demo day in a big cinema room full of 600 people: founders & associates were invited to go on stage being recognised for their work.
When asked what advice Maciej would give to anyone wanting to become a Techstars Associate, he said that if you are an expert on something or simply love working with startups and are open to learn then this is a great starting point. “I was involved for many years in the Startup ecosystem so I think I got some extra points for my Startup Weekend initiatives and other things I had been doing for startups, which showed the managing team that I had the passion and some work experience to support them.”
For Maciej the biggest take-away from the experience was extending his network, meeting many cool people in Berlin, and seeing how a Techstars accelerator works from the inside. “You can of course read a book like ‘Do More Faster’, but a much better way is to get a real life experience and participate as an associate. For me it was also kind of a hack –how to get accepted into a TS accelerator without being a startup that has to build a really strong team, a great product, have a traction, and compete with hundreds of other great founders all around the world. I got a very similar experience as an associate, so that was a good choice for me.”
When comparing the difference between Berlin and Poland in terms of startup activity, Maciej noted important differences on how talent is accessed in tech. In Poland we have some of the best developers in the world but most of our founders have mediocre sales/marketing skills and not enough experience on how to scale startups globally. In Germany or the UK the situation is the opposite. There is also a lot more money raised by Berlin startups –with bigger rounds than in Central and Eastern Europe.
Number of accelerators, many corporate-backed and access to seed funding was another main difference, which was more international in Berlin. Germany still has a lot more success stories than Poland does, and when talking about the whole ecosystem there is a culture problem –not just for Poland but for the whole Central and Eastern Europe region. There is still a lack of openness and trust to talk about what you are doing, your ideas with other people, whereas in Berlin people are much more open and willing to talk and network.
Maciej has now moved back to Szczecin and as a co-founder of Startup Poland is working on a new startup support program with the local government. His goal is to attract more VC money to the region. He is considering opening a local pre-acceleration program that could be a good link to cooperation with the Berlin startup ecosystem.
When he was asked what comes to mind when someone says the word Techstars, he said “I think it’s all about community/network of open-minded people that believe in this #GiveFirst attitude of helping each other. Even if the founders are doing something similar,they are not competing against each other, if they see they can share knowledge and help others. That’s a big differentiator of Techstars. The Give First mentality which is what I love the most.”
Apply to a Techstars Accelerator Program now.
Fundraising is an important part of most entrepreneurial journeys. If you are an entrepreneur, the standard process followed by many venture capital firms is well worth knowing. While every case is unique, having an idea of the key stages means you will have a sense of where you really are, what you have achieved, and what is left to achieve in order to secure funding.
To keep this post as useful as possible, I have not written-up exactly how we do it at my own firm, but I have instead tried to break the process into eight stages that many firms will go through.
A good investor will know about you, your company and your market before you speak to them for the first time.
Good VCs track AppAnnie, Alexa, Linkedin, GitHub, ProductHunt and similar services to spot interesting companies and monitor trends. They also keep up to speed with highly-rated angel investors, syndicates, seed funds and incubators to ensure they hear about the companies and founders who are impressing the other investors they respect.
On the entrepreneur side of the conversation, you can start early too. While you have to build your product and company first, it is worth spending some of your time with investors, before you actually need or want to raise money.
Two: Initiation of the Process
Depending on the situation, either the company or the investor can start fundraising process.
If you want to make the first move, you should ping a personal note to the investors that you already have a relationship with, signaling that you are thinking of raising money. For those you don’t know, avoid a cold email and either build a quick relationship (meet in person at an event, etc) or use your network (angel investors, employees, friends) to get warm introductions. I wouldn’t give a huge amount of information away via email too – it is always more powerful to give your ‘pitch’ in person or even over the phone.
Sometimes an investor who has been tracking a company closely (in some cases they are already an investor, in other cases, not) will pre-empt a fund raising process. Nakedly, this is because they are excited by your company and want to own part of it before it gets bigger or is better known. You need to decide if this aligns with your needs too.
Three: Early Process
If a VC is interested, a number of people at the firm will now get to know you. Expect to go through your deck two or three times as you meet a combination of Partners, Principals, Associates and Analysts. Be sure to know what each of these people do and how they will play into any final decision-making process.
During these meetings, you will be answering a lot of questions on your background, your team, and what the company and its products do. Be prepared for people to dig deep on the specific challenges that face your sector. If you run a delivery marketplace, you’ll be asked about unit economics; if you’ve built an advertising technology company, you need to know about what Google and Facebook are doing; and if you the CEO of an open core software company, you’ll be asked about your engagement with developers, and your conversation rate to premium software.
After you have run this gauntlet of questions, your answers will be reported back to the firm. An internal discussion, sometimes enhanced by external expert opinions, will take place. Ultimately this rolls up into a decision of whether they want to dig deeper.
Four: Deep Process
More than one partner usually gets involved at this stage. Usually just two, but sometimes (in smaller firms) all of the partners will participate. You will be expected to go into a huge amount of detail, so ensure that you know the finer points of your company and your market.
The objective of this stage is to really get to know each other. If an investment occurs, you may work together for many years to come and so, for both sides, it’s important to get a feeling of how that could work.
Articulating goals, hopes, and concerns is important – it is way better to have these understood and agreed upon at this stage, rather than discover them further into the relationship.
Typically there will also be a lot of third party due diligence and the investor will probably ask for references – both on the founders as individuals, and from customers and partners of the company.
All the while, the Partner you’re spending most time with will be preparing a much lengthier investment memo or dossier that contains all of the information that has been gathered, along with her view on each aspect.
Five: Partner Meeting
You will be invited to meet the whole team. This may be over videoconference, but more usually it will be face-to-face and, wait for it, you’ll do your pitch again. Expect lots of questions. Many of these are factual in nature – understanding the product and the company – but many are also posed in order for your potential investor to better understand you, your team and your personalities. The way you answer the question is as important as the answer itself.
Feel free to ask your own questions. You should already know one of the partners extremely well, but will the rest of the firm do for you?
At the heart of a great investor/entrepreneur relationship is a mutually respectful, two-way dialogue. Today is the day to start that dialogue.
Six: Term sheet
Assuming you impressed the team at the partner meeting and the firm has decided to invest, you will be issued a term sheet.
A term sheet is a high-level document that sets out the proposed investment, the valuation of your company, the terms pertaining to the investment and also what you can expect from the firm in addition to the financing. Often these are only one or two pages long. I’ll cover term sheets and what to expect in a future post.
If everyone is happy, all parties sign the term sheet. At this point everyone is signalling that they want to do this: you are almost done.
Seven: Post-Term sheet diligence
This part of the process is highly detailed, but straightforward. The diligence will involve lawyers, accountants and security, identity and technology experts who will ensure that everything you represented during the early part of the process was accurate. Assuming you didn’t lie at all, you should have nothing to worry about. Minor misunderstandings are common and usually cleared up quickly.
In parallel, longer documents will be drafted to detail the basic terms contained in the term sheet. Lawyers lead this part of the process but it is key for both the entrepreneur and the VC to remain engaged.
The Promised Land. When the diligence is completed, and no major questions have been raised, the documents will be signed and the cash will be wired. And then it starts to get really interesting…
This post was originally published in Factory Berlin’s Magazine.
Nothing good comes out of sitting around, making educated guesses about which city has the potential of becoming the next Silicon Valley. Techstars is the living proof that with a mission-driven approach, it’s possible to build lively startup hubs anywhere around the globe.
Serial entrepreneur David Cohen co-founded the startup accelerator in 2006 in his hometown of Boulder, Colorado, with the goal of enhancing the local startup ecosystem. The city, which has a population of 100,000 people, is now home to Google, Microsoft and Twitter, and provides the headquarters for the accelerator with nearly 1000 portfolio companies worldwide and a collective investment of $2,750,000,000.
David truly lives by Techstars’ mantra “give first” and is convinced that entrepreneurs have a better chance for success with the support of their local communities.
We caught up with David during his recent visit to Factory Berlin to chat about the recipe for successful startups, celebration of failure and Techstars’ experience in Berlin.
You’ve seen hundreds of companies starting up, failing or succeeding. What patterns do you see in successful startups?
The most important success factor lies within the team: their raw talent, desire to learn and ability to create. Building a startup means creating something from nothing. It’s basically art.
Another important aspect I focus on are the founders’ source of passion. All great entrepreneurs are passionate about what they do, but it’s important to understand why they are passionate about their project.
Entrepreneurship should not come from the head, but from the heart. If you’re doing something merely for the profit, it’s probably not going to work out in the long run.
Mission and purpose-driven entrepreneurs tend to perform better. The best scenario is if you’re doing that specific thing you’re doing because you’re attached to the problem that your product is destined to solve.
My favorite example for this kind of passion-driven entrepreneurship comes from one of our portfolio companies, a healthcare startup called ScriptPad. The idea behind the company is to allow doctors to use iPhones or iPads instead of a piece of paper to bring up patient records and write prescriptions. The founder’s father almost died because of a misinterpreted doctor’s prescription, so his drive for starting the company was to fix that particular problem and prevent such mistakes.
What’s your favorite startup success story?
I think a prerequisite of entrepreneurial success is being bold enough to open up to change and taking advice from others. Take one of our companies, SendGrid, an email delivery and management service currently sending out around 2 percent of the world’s emails.
Coming to Techstars, it became clear that the founders were incredibly technical people and highly respected in their field, but they had no prior business experience. However, they were amazing in bringing people in for management positions.
The founding CEO has replaced himself twice with more experienced CEOs, and that’s been a huge push for the company’s growth. His ego didn’t stop him, he just wanted to see his company thrive with the help of smart people who know exactly how to run a major business. Now, SendGrid is an important part of the Internet’s infrastructure and it has been amazing to watch how fast it has grown.
At Techstars, you celebrate failure just as much as you celebrate success. What’s your favorite failure story?
My favorite failure story is emblematic for Techstars’ mantra, “give first.” It’s about a company called EventVue that comes from my hometown, Boulder, Colorado. The company raised $1 million after taking part in our accelerator program, but failed fundamentally.
The founders were really great people, but the market wasn’t there and they couldn’t figure out the right product. After they failed, the community in Boulder held a wake for the startup. They carried the guys to the streets, cheering: “You did a great job,” “Your next company will be successful.” The investors, who lost money, were also part of the celebration.
Instead of saying “You’re a failure,” which in some places is disgraceful, the community embraced their experience and learned from it.
One of EventVue’s founders went on to become a key executive at Gnip, which was later sold to Twitter. This is the reason why Twitter now has an office in our community. Google and Microsoft have offices in Boulder because they bought local startups as well. This is amazing!
You don’t operate in Silicon Valley. Why is that?
We have a small office in the Valley, but we don’t run an accelerator program there. That doesn’t mean that we’re anti-Silicon Valley, but I’d say we’re pro everywhere else. We’re growing a global ecosystem, a network that supports entrepreneurs wherever they want to build their businesses. If the best expert in a particular field happens to live in Berlin, we should be able to leverage that. For us, that means expanding more and being present in more places.
Besides our US locations, we currently operate in Berlin, London, Tel Aviv, Cape Town and now Adelaide, Australia. We’d like to see more extension throughout Europe in the next couple of years and are actively looking at cities like Stockholm, Paris or Amsterdam.
How has your experience in Berlin been so far?
When people ask me which part of Europe I get the most excited about, I always say Berlin. I love the vibe of the city. Look at the level of activity and energy going to entrepreneurship. People want to invest in the local startup community because it’s really creative.
You’re present in London too. What’s your take on Brexit?
We work with local investors to fund the operations of our programs. My initial thought was that we might lose a few investors in the UK, but we haven’t so far. I think people were generally surprised by this decision, the stock markets went down and came back up, but it feels like it’s going take a while until we can judge the long-term implications. To be honest, I don’t expect it to have a major effect in the long run.
In fact Twilio, a company we invested in from our first venture fund, went public on the same day Brexit happened by mere coincidence. I thought “oh, what a terrible sign,” but the company is up by 300% since then.
What would be your advice to young entrepreneurs starting out?
Surround yourself with amazing people. It’s a people game, it’s all about the network that you can put yourself in the middle of. Great ideas die all the time because of the lack of access and network.
You have to get out of your chair once in while, spend time with people who can make introductions, find the right investors for your business and find the right organizations to do business with. Trust me, it makes a huge difference.
Techstars is my fourth company. Anything that I’ve been successful at has been a major result of being a good networker. It’s all about who you know and beyond that, who you are actually getting engaged. The better you are at that, the better your chances are at building something that matters.
What’s the best way for a startup to connect with the Techstars team?
The unique thing about Techstars is that we operate around the world. We run accelerators in 16 different locations, so there’s a good chance to connect with somebody from our network at your local startup hub.
To date, we have nearly 1000 portfolio companies, so if you know one of them, don’t hesitate to ask for an introduction. We also run Startup Weekend in literally every corner of the world. Make sure to check out the next one in your community!
Applications are now open for many of our programs. Apply today.
This post was originally published in Factory Berlin’s Magazine.
It’s time for Techstars Berlin 2017!
We expect that with each passing year we’ll see the quality of companies applying to Techstars increase, but nothing could have prepared us for the absolutely stellar applications we received for Techstars Berlin 2017.
The eight companies joining us this year represent five different countries and a variety of business models and verticals. We are excited to announce for the first time, the incoming class of Techstars Berlin 2017:
Cucumber Tony: An orchestration tool for WiFi networks and IoT devices
VanHack: Online school and recruiting platform to help tech talent get jobs abroad
ICM Hub: AI-powered customer service for airlines
App Samurai: Self-service mobile marketing tool for startups
Quotiss: Shipping logistic quotes in one click
Trevor: Giving your whole team the power to find answers from your database data and export the live results
Vaultoro: A secure alternative to traditional banking with physical gold
Atript: Software to target users of other websites
Fall is in full-swing here at Techstars with the addition of 64 new companies! Techstars recently had seven Demo Days across the globe, including Berlin, Mobility in Detroit, Barclays New York, London, Techstars Retail in partnership with Target in Minneapolis, New York City and Chicago. Phew!
Here’s a quick round up of the highlights:
Berlin Class of 2016
Techstars Berlin’s second Demo Day, held at the iconic Kino International, showcased 10 companies from six different countries with products ranging from machine learning and AI, to SaaS and mobility.
Techstars Managing Director, Rob Johnson, opened the event and Executive Director, Greg Rogers, provided welcoming remarks. It was an exciting day to celebrate the 2016 class with investors, mentors and other founders from the Berlin startup community!
Techstars Mobility, driven by Detroit Class of 2016
Techstars Mobility hosted its second annual demo day in downtown Detroit on September 8. It was a showcase of the growing collaboration between startups and the automotive industry.
Over 2500 attendees from 12 different countries watched as 12 startups pitched their businesses impacting the future of automotive and transportation. These startups were building businesses around autonomous, connected vehicle, shared services, mapping, and big data and analytic technologies. Three of the 12 companies announced partnerships with the program’s title sponsor, Ford Motor Company.
The entire demo day was live streamed and that video can be watched on YouTube here.
Managing Director, Ted Serbinski, announced that Techstars Mobility has brought two additional high-growth startups to Detroit: Mapbox and Polysync, the latter of which is a Techstars Ventures investment. These companies will be opening their Detroit offices out of the Techstars Mobility space, joining Oblong who opened their Detroit office last year.
Bob Caza, Director of Communications at the North American International Auto Show, expanded on Techstars Mobility mission to expose more startups to Detroit by announcing that we’re opening applications to bring 50+ mobility, automotive, and transportation startups to the 2017 Detroit Auto Show.
To capture this growth of the startup community, coupled with the entrepreneurial resurgence in Detroit, we debuted a trailer for Long Haul Films who is developing the documentary Restarting the Motor City. This is a feature-length documentary about the creators, innovators and entrepreneurs who are reimagining Detroit. They are breaking free from the shackles of 20th-century thinking to create a new model for cities across the globe.
Barclays Accelerator, Powered by Techstars in New York Class of 2016
Techstars Barclays NYC’s second Demo Day Event was held at the Edison Ballroom in the heart of the Theater District. Ten cutting-edge FinTech companies showcased products solving problems in real estate, capital markets, security, banking and the freelance economy.
Joe McGrath, the CEO of Barclays Americas, opened the evening with a warm welcome and recognition of the impact of Barclays’ programs around the world, which have seen collective valuations rise 190% from their pre-accelerator valuations.
Greg Rogers, Executive Director at Techstars, introduced the companies to the 600+ attendees including investors, mentors, Techstars alumni and community members. Jenny Fielding, the Managing Director, closed the event with a special thank you to mentors and Jon Zanoff, Entrepreneur in Residence, for their tireless devotion to this class and role in these companies’ success.
London Class of 2016
Led by Max Kelly, the Managing Director of Techstars London, the 2016 program kicked off with new offices, a new fund and a great new class. Within the class, one-third have PhDs and there are 19 separate nationalities! The variety of industries is astonishing – from grease to graph databases, from aid to artificial intelligence.
Each company presented their pitches to a packed venue during Demo Day, which took place on September 20 at the Royal Institution in London.
It is always exciting to be in the front seat of this kind of innovation.
Techstars Retail, in partnership with Target Class of 2016
Techstars Retail’s first Demo Day, held at Orchestra Hall in Minneapolis, showcased eleven companies with products ranging from voice search, machine forecasting, visual registries and retail experience bots. More importantly, all these teams were able to demonstrate their accomplishments they achieved over the summer.
Techstars Managing Director, Ryan Broshar, welcomed almost 1,000 attendees then opened the evening with an inspiring message and fun facts about this year’s class. Target’s Chief Strategy & Innovation Officer, Casey Carl, shared welcoming remarks and reflected on his experience as a mentor. It was an exciting day to celebrate the 2016 class and the broader Twin Cities startup community!
New York City Class of 2016
For the 2016 class, Techstars NYC experimented with a new take on Demo Day. Rather than live pitches Managing Director, Alex Iskold, introduced Exclusive Investor Preview and Investor Only Demo Day.
As with our previous classes, this was a diverse group of founders solving a wide range of problems. In addition to six teams from NYC, we had teams from Rochester, Atlanta, San Francisco, two teams from Philadelphia, a team from the UK, a team from France and two teams from Canada. Of these 15 companies, five have women CEOs.
The new Demo Day format was a hit among founders and mentors, and aligns with the spirit of innovation at Techstars.
Chicago Class of 2016
Techstars Chicago’s seventh Demo Day, held at House of Blues in Chicago, showcased the latest ten startups selected from a pool of thousands of applicants. Companies ranged from a wearable hardware device enabling parents to keep track of their kids to enterprise and B2B software solutions, and showed both the diversity and high potential of the midwest startup ecosystem.
Techstars’ Managing Directors, Troy Henikoff and Brian Luerssen, along with Excelerate Labs co-founder, Sam Yagan, welcomed a packed house filled with notable investors and entrepreneurs. Chris Gladwin opened the afternoon with a keynote on the need for grit in operating his business to the recent 1.3 billion dollar sale of Cleversafe to IBM. It was an exciting day to celebrate the 2016 class and the broader Chicago startup community!
Get a head start on your own entrepreneurial journey. Apply to an accelerator program. Applications close on October 15th.
Who: Startups interested in applying for the Austin, Barclays Cape Town, Barclays London, Barclays Tel Aviv, Berlin, Boston, Boulder, Cloud – San Antonio, Healthcare in Partnership with Cedars-Sinai (Los Angeles), New York City or Seattle Accelerator.
What: Info session
When: September 29
Where: Startup Hall – 1100 Northeast Campus Parkway #200, Seattle, WA 98105
Who: Startups interested in applying to the Barclays Accelerator
What: Office Hours
When: August 31 – September 1
Where: The Factory, Rheinsberger Str. 76/77, 10115 Berlin, Germany
Details: Click on any time to make a booking. Please ensure you have watched the webinar before this meeting to ensure that the most is made of the time. You can find it on the calendar invite.
About two months ago, we got into Techstars. This story isn’t about that, though. It’s about doing more faster.
The first thing I noticed during our Techstars introduction is that all startups are at very different stages. While some of them already have dozens of employees, other startups are in the process of pivoting and starting from scrach.
At Mimo, we are somewhere in between. Our two proof-of-market apps have been on the App Store for over a year now. Swifty just passed the 1M download mark but, although it generates a decent amount of revenue through its in-app purchases, its customer lifetime value is too low to be a sustainable revenue stream.
In the long term, we want Mimo to become the leading source for mobile education, a place where you can dive into almost anything, in a learning style that is a lot closer to a game than old-school textbooks or video lectures.
Before Techstars, we were chasing a lot of different paths. We liked what we’ve created with Swifty and Javvy but we’ve also felt like B2B was a thing. We wanted to release Mimo at the end of the summer but didn’t really know how to get there.
Here’s our Initial Plan:
- Build a course creator that allows everybody to create courses in an interactive format and submit them to us.
- Build a tool that allows us to review the courses of the instructors in a timely manner.
- Create a marketplace and allow customers a way to rate and review the courses.
- Split the revenue with the instructors in a fair and secure way.
- Launch on iOS and Android devices (yes, that’s phones and tablets).
The New Plan
Then we had our initial deep dive with Rob, our Techstars Managing Director, and that was when things changed quite a bit. His question was:
What would the app look like if we were to release it four weeks before Demo Day?
Having Mimo out before Demo Day would give us the chance to show some actual data to investors. “Doing more faster” is just one side of the coin, we also had to figure out what we wanted to do faster. So we started taking the initial plan apart and looked for things we could remove. After two intense hours with Rob, the updated plans for Mimo looked like this:
- Create all the content in-house and stop working on the course creator.
- Drop the revenue sharing system.
- Drop the rating system.
- Launch with ten courses on computer science and programming.
- Launch on iOS only and drop the Android version.
- Launch in seven weeks.
Phew! To some of us, this sounded like a very drastic change, maybe even a pivot. Still, it also meant that we finally had a clear plan that we could execute on. ?
Asking the People What they Want
We decided on having ten courses for the initial release, but we still had to figure out which computer science-related topics we would go with. We had different ideas of figuring this out but, in the end, we decided to include a simple survey in Swifty.
The survey was obviously somewhat biased by the fact that Swifty’s users are iOS-only and mostly new to programming, which resulted in more advanced topics getting less votes than I would have thought (yes, we want to release more advanced courses in the future).
Because Mimo’s lesson format didn’t support images at the time, writing a high-quality course on Xcode/iPhone development wasn’t possible. So, sadly, we had to move the two topics that got the most interest back on the priority list.
Here’s the list of courses we decided to go for:
10. Programming Basics
Building a Content Pipeline
Great. We had a list of courses we wanted to release along with the app but, now that we didn’t look for external instructors to write the content, we had to find a way to create the entire curriculum in-house.
Swifty alone has more than 300 interactive lessons. A single lesson takes Henry, who’s in charge of content, around 15–25 minutes to create, creating ten additional courses within eight weeks seemed almost impossible (especially because the quality of the content was something we didn’t want to compromise on). That meant that we had to look for outside help as soon as possible.
We set out to hire a bunch of freelance developers with a desire to teach people. Not the easiest position to hire for in general but, with the added time constraint of finding someone in 1–2 weeks, it became a real headache.
Thankfully, there are some advantages for Techstars startups and in the end, the Techstars network helped us find the right people.
In a matter of a week we hired four “curriculum engineers”, all from different countries and all worked remotely ?. Henry had to devote almost all of his time to managing the content team over Skype and Slack, a task that isn’t easy.
Coming Up with a Business Model
With the content team up and, well, writing, we also had to zero in on Mimo’s business model.
Here’s what the “business model” of Javvy and Swifty looked like:
- Download the app for free.
- Get the first two chapters for free.
- Get the third chapter for free if you share a branded message on social media.
- Unlock all other chapters for $2.99.
We had long discussions with Rob about the new business model and came to the conclusion that the old model worked fine for our stand-alone apps, but having to purchase every Mimo course on its own did not seem like a good way to go forward.
Our first intuition was to let the users decide between the one-off purchases to unlock a single course and a monthly subscription that would unlock the entire course library. But this approach has its flaws. Our courses differ in length, so we would have to price them all individually, which makes it more complicated for us to manage. The consumer on the other hand has to decide between the different purchasing options, which we deemed too confusing.
The other strategy that came to our minds was to offer a subscription that would unlock the whole content. We were hesitant to get rid of the “single-course purchases” because we were not convinced that users who wanted to learn, say, Swift would also want to learn other programming languages.
So we designed an experiment to test if users would be willing to go for a monthly subscription. We realized that, in order to get any real results, we had to actually charge the early-bird users.
Testing our Assumptions
We built a quick landing page that displayed the different courses and features that we wanted to launch Mimo with. Then we linked to a Plasso “space” that allowed the users to choose between a monthly and yearly subscription. Since Plasso took care of the recurring payment handling and the Stripe charges, setting the experiment up didn’t take more than a couple of hours.
While all this was going on, we were also looking at a way to grow our mailing list. We started rewarding Swifty users that signed up as beta testers for Mimo with a dark coding theme, which worked really well. All of a sudden, we were collecting 2,500+ email addresses per week.
This mailing list allowed us to send the subscription experiment to a large number of potential users. We started by offering a batch of 3,000 people a subscription for a price of $2.50/month ($25/year) and limited the offer to 72 hours, so that people had an incentive not to wait around.
Once we looked at the results, we were surprised to see that 5.5% of the users who opened the email really subscribed to Mimo, with 41% of them going for the yearly plan. (Keep in mind that these are subscriptions for an app that was more than a month away from being launched.)
After the first experiment, we were pretty confident that users would go for a subscription if the price was right, but what is the right price?
To answer that question, we built another two landing pages and sent them to different batches of 3,000 Swifty users. This time, however, we priced the subscriptions at $7/month ($70/year) and $5/month ($50/year). Once again, the results were surprising.
At $7/month, the conversion rate dropped to 1% and we did not sell a single yearly subscription. We attributed this partly to the fact that $7 per month puts us in a price range where we are being compared to products like Netflix and Spotify. At $5/month, however, things looked a lot better.
After seeing these results, we started to feel a lot more confident about this change in the business model.
Here’s what we landed on (for now):
- Download the app for free.
- The first chapter of every course is free, so you can get a glimpse of what’s to come.
- The second chapter of every course is free if you share Mimo on social media.
- Unlock all courses and chapters for $49.99/year.
Sprint to Launch
We figured out content creation and the business side of things, but we still had to build the app itself. Unfortunately, because of the different lesson format that we created to improve the learning experience, we could only reuse small parts of Swifty’s code base.
We hired two freelance iOS developers in order to launch on time, one of them is still working with us today (hey Frank ?). Together, we spent many late nights in the office, trying to get the interactive lessons just right.
Although we didn’t quite manage to launch on time (Aug. 9th was the goal), we are still incredibly content with the things we achieved over the last two months. There are still a few bugs but, from a user experience point of view and the amount of content, Mimo is far beyond anything Swifty ever was.
This post was originally published on Medium.