How Much Should I Pay My Employees? An Introduction to Compensation Philosophy

Developing a compensation philosophy—and doing so sooner rather than later—is one key way to get compensation right. But what exactly is a compensation philosophy, and how do you go about developing one for your startup? 

When done well, your compensation philosophy can set the stage for building a more transparent culture and building trust with employees. 

What is a compensation philosophy? 

A compensation philosophy is a statement that standardizes your compensation practices and puts the “why” behind every compensation decision your company makes. If all compensation information was made public to every employee at your company tomorrow, your compensation philosophy should be robust enough to justify the decisions that have been made. 

When done well, your compensation philosophy can set the stage for building a more transparent culture and building trust with employees. 

How to develop your compensation philosophy 

We talked with Sabrina Kelly, the VP of Talent at Techstars, to get her advice for early-stage founders who are developing their compensation philosophy for the first time. 

Sabrina explained that compensation philosophy is not one-size-fits-all. It should be created through a process of discovery among co-founders or a core leadership team. She also emphasized the importance of doing this sooner rather than later, because while setting compensation subjectively might not cause any ripples among a team of four to six people, it will undoubtedly raise difficult questions at scale. 

One of the most valuable, and often under-appreciated, tools for setting compensation is benchmarking data. Using benchmarks early on and deciding what ranges you want to target will have a great impact on your compensation strategy, but getting reliable and up-to-date market information can be challenging due to the variety across startup roles. Sabrina recommends using the Option Impact Tool by Advanced-HR: “At Techstars, we use this tool to give our portfolio companies access to updated cash and equity benchmarks by funding stage, geography, and revenue.” She advises founders to tap into free resources like these and use them to build consistency and equity in their pay practices. 

Interested in learning more? Join us for an AMA with Sabrina Kelly and Options Impact on August 28, 2019 at 12:00 pm Eastern Time to learn about setting a compensation philosophy and utilizing compensation data for hiring and benchmarking.  

You will learn about how you can use Options Impact survey data to optimize your compensation strategy and hear directly from Sabrina on steps you can take to build a compensation philosophy for your startup.

See more content like this in the People & Culture Toolkit → 








Techstars Includes Diverse LEADers: Camilla Olson, Fashioning Body-Positive Beauty

Techstars Includes Diverse LEADers is our series highlighting diverse members of the Techstars Network. Techstars is committed to having a meta-impact on diversity in the tech space by encouraging a new generation of entrepreneurs to build inclusive companies from the very start, because we know diverse teams perform better and we believe inclusive companies will create a better future. 

Today, meet Camilla Olson. 

Camilla Olson in her own words:

Born in Alaska, Camilla is an inventor and holds two U.S. patents, with two more in process. She is a serial entrepreneur and was a venture capitalist. She founded two big data predictive modeling companies in the pharma industry: one had its IPO and the other was acquired for $95M a year after founding. Camilla returned to graduate school to learn design and her first fashion collection was selected to be shown in Lincoln Center as part of Mercedes Benz Fashion Week. Her designs have been seen on the red carpet of the Academy Awards, at the Met Gala, and at the White House. In 2011, she received the Distinguished Alumna Award from the University of Maryland and Honorable Mention as “Best Second Act Reinvention” on the website SecondAct.com. She was a TEDx speaker in January 2016.

Camilla’s current company, Savitude, uses mobile commerce and hyper-personalized technology to enable shoppers to find body-positive clothing and beauty products that build retailer loyalty. Savitude has been listed in Forbes as one of 60 Women-Led Startups That Are Shaking Up Tech Across The Globe, in the top 12 of Project Entrepreneur 2017, on the stage of Techcrunch Disrupt Battlefield NY 2017, and was selected to participate in the Techstars Retail Accelerator in partnership with Target in 2017.

Specialties: Lateral thinking. Business development and strategy. Inspiration driven visual research, textile manipulation. Creative processes.

How Camilla LEADs:

  1. There isn’t a rule book. Do it until it feels wrong. 
  2. Stop wondering what everyone else is thinking. They are too busy thinking about themselves. 

Four teachers made all the difference in my life. My home room teacher in high school saved me when my family was figuratively “blown up.” A dance teacher at U of MD opened my eyes to the arts. We later re-met when we were chaperone parents on a field trip for our high school children.

More recently, two professors in my MFA program were instrumental. In design class, we had public critiques of each assignment. I saw how exceptionally talented my classmates were, and how young. I felt so out of place and hopeless. My professor took me in the hall and shook me, telling me that I did belong there. She explained where and how I had talent.

One last professor, Sara, twice instructed me. Now she is head of education at CFDA and continues to encourage me and Savitude. 

Work harder, work longer, and don’t give up. Assess early and often. Pivot until you figure it out. It is the last one standing who wins. You cannot win if you quit. 

I am driven by curiosity. I notice a problem at a high level and then find the solution through a lateral thinking process. From there on, I am driven to “peel the onion” to understand how to bring my solution to market: how to form the right company and make this actually happen. I literally can see the success; failure just isn’t an option. 

What makes you YOU? 

Trauma and drama in one’s life can imprint many different ways on people’s lives. For me, I spent most of my childhood fantasizing about fixing what was wrong in my world. Having “fixed” family issues, in my mind, I moved on to other problems and began inventing. I desperately wanted water fountains at each desk in school. This led me to “design” individual “toilets” in each desk as well. It is easy to see how I was the originator of six companies. Now not a day goes by that I don’t make a suggestion to someone, who may or may not want the suggestion. 😉 

See more Techstars Diverse LEADers here —>








Sell More Faster: The Recipe for Startup Sales Success

Sell More Faster is the book that every early-stage startup needs to help it find product-market fit.  Every startup, at any stage, needs to get—and keep—more customers. Read it once, then keep coming back as your startup grows: it will be your guide over months and years of building your company. 

You know your startup needs to sell, sell, sell. Sell More Faster by Amos Schwartzfarb helps you do this by offering a data-driven map for how to find product-market fit, how to know when you’ve achieved it, and how to use it to build a powerhouse company. Sell More Faster is the ultimate guide for startups about how to find, and keep the customers who need what you are selling.

We talked with Amos about how he became the expert in startup sales, and what he hoped to achieve by writing Sell More Faster.

Read the first chapter of Sell More Faster now →

A Really Good Recipe Book

Amos likens Sell More Faster to a “really good recipe book.” In other words, he’s laid out the ingredients and instructions, and now it’s up to you to bake the cake: “I took my process and thought: how do I create a really simple-to-follow recipe for startup sales success?” The result is this simple-to-read, simple-to-understand, simple-to-implement text that lays out a meticulous series of steps for asking yourself hard questions and gathering actual data about your customers, in order to make them need you. 

No magic tricks, no cult of personality, nothing impossible to replicate: if you follow the instructions in Sell More Faster, you will end up with customers who, in Amos’ words, “have a delightful and incredible experience and stay forever.” 

Either that, or you’ll figure out quickly that you don’t have truly product-market fit, so you can address that problem now, rather than later, when it’s a much bigger problem. No matter where you are now, it’s always a much bigger problem later. 

Register for an AMA (Ask Me Anything) with Amos →

No Better Expert at Startup Selling

“There is no better expert at startup selling than Amos Schwartzfarb. Follow his advice.” —Aziz Gilani, Managing Director at Mercury Fund

If you look at Amos’ career, you can see how he ended up as an expert in startup sales. 

“I’ve been doing customer research for this book for the past twenty years,” Amos said. Over those years he’s been responsible for sales or customer satisfaction at six startups—with a combined exit value of over $900 million—and then taken on the role of Managing Director for Techstars Austin for the past four years. He’s one of the most active early-stage investors in all of Texas. 

At Techstars, Amos found that other MDs often asked him to come and do workshops or talk to the startups in their programs about sales issues. He discovered he was getting the same set of questions over and over again, so he started creating workshops and writing blog posts, hoping to scale his ability to share knowledge. 

It’s About the Process

The problem with workshops and blog posts is that they’re too short. Startups need to develop a strong foundation and then build on it: it’s a process. Amos could describe the basic principles, but “there were always a lot of questions.” This is because what you need to do depends on where you’re at in the process, so it was difficult to create a workshop or a blog post that met everyone’s needs. 

Sell More Faster preemptively answers the questions that Amos got time and time again giving live workshops, and describes the process in detail: “I want startup founders to understand the path they need to go down to put the principles into practice.”

That’s when Amos realized he had a book he needed to write. 

The Opposite of Read It and Forget It

For one thing, while you can, and should, read the whole thing right away, be aware that the chapters build on each other: you won’t be able to take the actions in the later chapters until you’ve built the foundation described in the early chapters. Sell More Faster isn’t just a book you read—it’s a book you do. 

The entire act of entrepreneurship can be understood as one grand exercise in experiential learning. Entrepreneurs must constantly be learning in order to keep their companies growing. What works today, at this stage and in this market, won’t work tomorrow—either because your company has changed or the market’s changed. (This is one reason why startup accelerators are so useful—they’re basically guided experiential learning, tailored to your company.)

Sell More Faster is a guide to experiential learning around one specific piece of the startup journey. As Amos puts it, “Sell More Faster doesn’t teach you how to sell. It teaches you who you can sell to and how to build a sales organization over time.”

Slow Down to Speed Up

At Techstars, one of our oft-repeated mantras is that you need to slow down in order to speed up. Yes, speed is essential to any startup—it’s one of the big advantages that startups have over big companies. But if you’re not going in the right direction, all that speed will get you nowhere. 

Here are a few of Amos’ key points to help you  slow down in order to speed up:

  • You think you know who your customer is, but you don’t really know yet.
  • You think you know what they’re buying from you, but you don’t really know yet.
  • You think you know why they’re buying from you, but you don’t really know yet.

This who, what, and why are the W3 framework that Amos lays out—the “secret sauce” of Sell More Faster. Amos turns these insights into actionable instructions that get you to a point where you do know who your customer is, what they’re buying from you, and why. 

Amos’ process helps you form a strong opinion of who your customer is and what they’re buying from you. “Until you have an opinion about this, you have nothing to test against,” Amos explained. The testing part is crucial because your first theories are probably not fully correct: “No one nails it on the first time.” And that first salesperson you hire? They’re actually a customer development person—and understanding the difference between these two things is deeply important. 

Every step in the process laid out in Sell More Faster guides you to form theories and then helps you understand exactly how to test them. There are plenty of articles out there that will tell you to gather data and test your theories—but Sell More Faster explains how. This is the difference between unhelpful advice and required reading. 

This all sounds great, but how does it work in practice? Companies that Amos has worked with, including Scalefactor, Showbotics, Storyfit, and Skipper, have all benefited from this process. You can read their stories in the book. And you can read the first chapter of Sell More Faster right now, and see for yourself whether the W3 Method makes sense to you. Then you can buy the book for the rest of the process. 

Read the first chapter of Sell More Faster now →

Ready to buy?→








People Ops Question: How do we define our company culture?

By Sabrina Kelly, Techstars Vice President of Talent

At Techstars, we define our mission in People Ops as the following: “We are strategic partners in building Techstars business by maximizing the value of our most important asset—our people. We attract, retain, develop, and support Techstars employees globally and aim to uphold our culture and values, in a manner that is inclusive to all.” 

As VP of Talent, and former VP of People Ops, I hear a lot of questions from founders. This series aims to answer the most frequent questions. 

Q: How do we define our company culture?

Don’t overthink it. Get your leadership team in a room and talk about why you started the company:

  • Why did you choose this problem? 
  • Why did you choose the people around you and what makes your team uniquely awesome? 
  • What do you want this to be in five years? 
  • What types of behaviors do you value in the people by your side now and want to continue to see in them? 
  • Maybe more importantly, what types of behaviors DON’T you want to see in those people?

Lay all of those cards on the table, get excited, and put together a one-pager based on everything you’ve just gotten aligned around. Take that one-pager and pull out some core values that really seem to jump off the page. If you can do it in a way that feels genuine, create a mantra or vision statement that you’d be proud to put in front of your employees. Take those values and use them as much as possible in company communications, onboarding, interviewing, and management to create and maintain alignment. 

Lastly, while having a strong value-based foundation is critical, you shouldn’t be afraid to revisit and challenge your values often. And don’t be afraid of the people who do; they may just be the people who help drive the company forward at the right moments vs. allowing it to stay stuck in the past. 

Techstars Talent enables you to build highly successful teams! Check out what Techstars Talent can do for you. 

This piece was originally published on Techstars Stories.








Harry Stebbings on committing to building a network & giving first

Harry Stebbings, founder of the Twenty Minute VC podcast and Stride.VC, spends time every day connecting with each of his new followers on social media. He ends every email with “How can I help you?” Listen for more on how he built his podcast to over five million downloads per month, and how he Gives First every day.

Harry Stebbings The Give First Podcast

Stride.VC founder Harry Stebbings is probably best known for his podcast, The Twenty Minute VC, the world’s largest media asset in venture, with over 5 million downloads per month. He’s talked with amazing Venture Capitalists and entrepreneurs and made over 2,800 shows, and he spends 45 minutes every day DMing each one of his new followers on Twitter in order to build a network with a truly human touch.

When he was 13, Harry watched “The Social Network,” the movie about Facebook’s growth, and it inspired him to become an entrepreneur and investor. At 18, he set up the Twenty Minute VC. With $50 in the bank, he literally stood at a crossroads and spent $10 on the domain and $20 on a microphone: “So I’d spent, you know, 60% of my net worth on this podcast in the space of 10 minutes. And it made me do it. It was the forcing function and that was the start.”

Harry learned about giving first from David and Brad as well. “I don’t understand how you guys do it. You guys were always responsive, kind, giving of advice,” he said, thanking David for his support as he was just starting out. “It’s just incredible and blows my mind that with everything that you have going, you’ve have the ability to carve out the mental discipline and the rigor to really engage and Give First. 

David immediately returned the compliment: “When I follow the pattern of your show and talk to people that know you, almost everyone said that that’s who you are and they don’t understand how you do that. So however you do it, maybe it’s how we do it. And maybe it’s just a mindset, right?”

Give First truly is a mindset.

Listen for Harry’s take on…

The kinds of companies Harry likes best to work with:

“I love working with two to 10 people, forming teams, early product.”

“The best companies fundamentally own their lines of distribution.”

Money:

“I’ve sometimes found that the best VC is or less motivated by [money] and more motivated by just helping.”

“Money is fantastic in many ways. But it’s the outcome of the work that I do.”

How Harry maintains the human relationships in his network as it grows:

“Get off email. … A lot of what I’ve done actually is moved a lot of the relationships that were more professional relationships and transitioned them into friendships, through moving platforms: from going to Instagram, to going to WhatsApp, Snapchat, whatever that platform may be. But you just get so much more depth in the relationship through the less formal rigid platform.”

“In terms of the expanded network and how you deal with it, you’ve got to commit to it. If you’re going to pursue this strategy—it’s not a nice word to say, ‘strategy’—but if you’re going to see this as the way that you want to work, which is how I want to work, people-centric, human-centric, and personality based, then that is part of your workflow. You spend less time on email, you spend less time doing other things and you have to commit yourself to it. Is it easy? No, it’s insanely hard. I spend 45 minutes every night DMing every new single follow on Twitter, thanking them for following me. I’ll mention something about the city that they’re in, whether it’s I’ve been to it, I’d love to go to it, I’d love to run through it. I hear they’ve got great mojitos, monuments, whatever that may be. And build a relationship with them. The community is incredible.”

Companies, people, and resources mentioned in this podcast:

Subscribe to Give First with David Cohen and Brad Feld to get new episodes weekly.








The Creativity of Entrepreneurship: Community Leader Spotlight with João Marinelli

“If you don’t understand people, you don’t understand business.” —Simon Sinek

João Marinelli loves this Sinek quote about people and business because, as he says: “I love people and love working with them!” To João, entrepreneurship is all about people, and “our power to transform our realities and reinvent (in a positive way) the status quo.”

To João, the truly amazing thing about entrepreneurship is the way that it gives life to people’s creativity, and helps them use their creativity to change the world. “I think that’s why I dedicated almost six years of my life to studying entrepreneurship and being an entrepreneur,” João said. He’s currently working for Darwin Startups, a Brazilian accelerator—named the best accelerator in Brazil by Associação Brasileira de Startups—where he has “freedom to use my creativity and entrepreneurship to develop new products or approaches.”

People, Communities, and Leadership

“I love people, communities, and leadership,” João said, explaining his constant involvement in Techstars Startup Weekends. He attended his first as a participant in 2014, and then got involved with making more happen. He organized three Techstars Startup Weekends, in 2015, 2016, and 2017, growing his responsibilities over time, until in 2017 he became a Facilitator—and since then he’s already facilitated 17 events! “I love it!” João said.

In 2018, João worked with Techstars Brazil to redefine the Community Leader Academy (CLA), and together created a new program for training CLs. The first CLA of 2019 took place at Caxias do Sul/RS in the south of Brazil, in February. As João described, it had a “new model, new style, new ways to work, new dynamics, more people and more hands-on.”

By the end of the event, 16 cities had events planned for their communities for a whole year. “The impact was giant!” João said, with great satisfaction at seeing his hard work pay off. 

Every day, at work and as a Techstars Community Leader, João is “working hard to deliver the best experience for Brazilian ecosystems and entrepreneurs with great and good content and energy.”








QBE & Nimbla: A Success Story Of Corporate-Startup Innovation

By Ted Stuckey, Managing Director of QBE Ventures

My goal is to make QBE a partner of choice for startups. It’s hard work, sometimes, finding the right startups that will grow or expand QBE into new markets or drive operational and process efficiencies, and then working with so many parts of QBE internally to bring the partnership to fruition. But the results—like QBE’s new partnership with Nimbla—are worth all the effort. 

Balancing Both Sides of a Tricky Equation

Our Network Engagement partnership with Techstars has been extremely helpful, as they are able to support me on both sides of this tricky equation. When I’m looking for startups across the insurance value chain, Techstars enables me to identify and quickly vet an ongoing flow of potential partners. Then, because so many Techstars employees—my Techstars Network Engagement Program manager included—are founders themselves, they help me see the places where QBE needs to change in order to be responsive to startup needs. Having a third party push us to become a better partner to startups, as well as sharing best practices, was essential for making change happen.

Most recently, Techstars helped us secure a partnership that I’m really proud of, bringing QBE and Nimbla together. We’ve just announced that QBE is partnering with Nimbla to give small businesses the peace of mind and confidence that they need to reach their full potential. 

The Future is Now

I knew right from the start that Nimbla was something special. They went through the 2018 Barclays Accelerator powered by Techstars in London, and though they were very early stage, the accelerator helped them grow in a way that made them enterprise-ready.  

Nimbla is an invoice insurance startup that enables businesses to check the risk of non-payment on invoices and protect the ones they’re worried about. For QBE, this is huge. This was something we were looking at, but we all thought it was a few years out. 

This kind of thing is exactly the reason why corporations like QBE have to be watching and partnering with startups. If we hadn’t, we would still be watching this opportunity and waiting. There’s no way around it, corporations just move and innovate at a different speed from startups. But with Nimbla, we expect to power QBE’s go-to-market strategy for a whole new target market—today, rather than in five years. I’m expecting to see a great impact, for both QBE and Nimbla.

Big Impacts to the Big Picture

I like to think that, along with driving Nimbla’s business goals, we’ve helped them see the big picture in a new way. We’ve pushed them to do something new in the market and to run their business differently. They’ve seen a vision of who they can be as a business five, 10, 15 years down the road. 

Working with startups like Nimbla has definitely had an impact on QBE, way beyond the bottom line. Nimbla came before a group of people who have made a career in the insurance industry, and inspired them to recognize alternative ways of doing things, alternative ways of using data, and alternative ways of providing benefits to our customers. That’s a shift toward entrepreneurial culture that we couldn’t have done on our own. We needed Techstars, and we needed to get in deep with startups in order to really see and feel that difference. 

We are working hard for QBE to be the partner of choice for startups, so that we can make more great deals like this happen. 

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Read more from both QBE & Nimbla about the benefits of corporate-startup innovation. 








People Ops Question: How do we make sure we’re not breaking a bunch of laws?

By Sabrina Kelly, Techstars Vice President of Talent

At Techstars, we define our mission in People Ops as the following: “We are strategic partners in building Techstars business by maximizing the value of our most important asset—our people. We attract, retain, develop, and support Techstars employees globally and aim to uphold our culture and values, in a manner that is inclusive to all.” 

As the VP of Talent and former VP of People Ops, I hear a lot of questions from founders. This series aims to answer the most frequent questions. 

Q: How do we make sure we’re not breaking a bunch of laws?

Spend the money to hire an employment consultant early on to handle your initial setup. 

There is a lot of “stuff” that, if you can it get set up properly early on, will save you from worrying much until you get closer to the 25+ employee mark. There are a ton of companies and consultants that specialize in employment law, so you should be able to find someone pretty easily by running a search or tapping your network. (I highly recommend checking in with the Techstars Talent team for a referral!) 

A strong employment consultant can easily handle stuff like ensuring you have compliant payroll and benefits systems, building an employee handbook, and drafting all of the templates and processes (offers, contracts, separations, etc.) that you’ll need to handle different scenarios compliantly as they come up. You’ll likely pay a one-time fee for a compliance audit and some additional set up work (+/- $5K), but for the time and headaches it will save you down the line, it’s totally worth it. Once you have that relationship, you’ll also benefit from knowing that you have employment counsel you can call if you run into any complicated situations along the way. 

Today, a lot of payroll and HRIS vendors have all-in-one solutions where they offer additional services to support compliance and give advice on employment processes, so it’s worth looking into what you might already have available to you. Another option is a Professional Employer Organization, more commonly referred to as a “PEO,” that can manage all payroll, benefits, and employment compliance for you. They will charge a fee as a percentage of payroll that’s likely more expensive than other options, but it’s an all-in-one solution that can be particularly helpful if you plan to set up operations in multiple geographies.  

Whichever path you choose, the moral of the story is that labor law is complex (and different) in every geography. It’s really easy to get into trouble without the right guidance early on, so invest early in external help and you’ll be in good shape until you need to hire HR in-house. 

***

Techstars Talent enables you to build highly successful teams! Check out what Techstars Talent can do for you. 

This piece was originally published on Techstars Stories.








LaunchPad Lift Spotlight: Antithesis Foods

Highlights of student-led ventures participating in LaunchPad Lift, part of the Blackstone LaunchPad® powered by Techstars® entrepreneurship program.

Sure, students love snacks. But when a group of food scientist students at Cornell couldn’t stop eating their school project, they knew they were onto something special. Grabanzos, a crunchy, chickpea-based chocolate snack—with the added benefits of more protein and fiber and fewer calories than anything else on the market—won Jason Goodman, Ashton Yoon, and Philip Kim their class competition. After their initial success, they decided they had to bring it to the public. The team named their company Antithesis Foods, because they want to take a different, science-based approach to food development.

“To me, entrepreneurship is about ‘going from failure to failure without losing enthusiasm’,” said Jason, quoting an old saying. “It means you find great joy on working through big problems, regardless of the pain, anxiety, and sleepless nights.”

As a PhD student at Cornell, Jason first got involved in the LaunchPad program on campus in spring 2018. He and his two teammates have found Antithesis to be instrumental in setting them up for success, in particular due to the connections with other student teams and networking with consumer packaged goods experts from outside their school’s existing program. These kinds of industry-specific experienced mentors are helping Antithesis narrow the endless list of to-do’s so that they can maintain focus on the most critical metrics early stage investors are looking for and mitigate risks in the right parts of the business.

Jason also appreciates the sense of community that Lift provides. “Just hearing the issues that other teams are having as they grow their companies lets us know that we’re not alone! Everyone is struggling with the same problems, whether they’re fundraising, effective marketing, scaling, or ensuring product-market fit,” he said. “Running a startup can often be isolating, so the community is especially helpful, particularly at this early stage of our venture.”

Jason and his team members are aiming to achieve two major goals by the end of the eight-week virtual program: development of a fundraising pitch deck and identification of several measurable KPIs.

To assist with the development of company pitch decks, Techstars Managing Partner Mark Solon coached the founding teams during week three of the program about the relationship components of fundraising. He also encouraged teams like Antithesis to focus on investors with existing experience in an industry ecosystem. These investors, Mark explained, will require less education and be able to understand the problem and solution much faster.

As for Antithesis’ objective to structure a framework of metrics and KPIs for Seed/Series A pitches, Jason and his team members recognize the importance of collecting and presenting data investors care about. They are constructing experiments to answer questions about the cost of customer acquisition, marketing ROI, and more, in order to collect meaningful data.

“Having the mentors and experts who know what questions to ask is invaluable, and we’re thrilled to have the opportunity to work with them,” Jason said.








Give First Wherever You Go: One Founder’s Journey from Mexico to Detroit

René Pons, co-founder of PPAP Manager, has founded a company in Mexico, run Techstars Startup Weekends across Central America, and gotten into Techstars Detroit. Everywhere he goes, René Gives First and strengthens the startup ecosystem. 

The Techstars Detroit 2019 class

In early July, a week before Techstars Detroit kicked off, TechCrunch ran an exclusive article announcing the new class of 10 companies that are, right now, enmeshed in their three month accelerator program. The article noted that the program name and focus have changed, from Techstars Mobility to Techstars Detroit: “Mobility is baked into Detroit, but Detroit is more than mobility.” The Detroit startup ecosystem is strengthening and expanding, and becoming ever more appealing to startup founders from around the world. 

Techstars has believed in Detroit through the hard times—we announced the first Techstars mentorship-driven accelerator program in Detroit the same day the city came out of bankruptcy. Ever since, Techstars has been a part of building better times for the Comeback City, helping to grow the startup ecosystem, making connections that benefit corporations and startups alike, and attracting new companies to the region.

If you’re a startup that does business with automotive or manufacturing, you need to get to Detroit.

We’re beyond excited about every one of the 10 companies in the 2019 Techstars Detroit class, but one in particular has not just a great business, but a founder who lives the Techstars value #GiveFirst, and who has been a force for startup ecosystem building for years in his native Chihuahua, Mexico: René Pons, co-founder of PPAP Manager

Safety First

First, the company: PPAP Manager is a platform to streamline the approval of packets of documents required in the automotive industry, known as PPAP (Production Part Approval Process), to validate production parts. 

There are 30,000 parts in your car, and every one of them journeyed a long distance, often passing through several sets of hands, before your vehicle arrived, shiny and new, in a dealer’s showroom. The global journey of each one of those 30,000 parts is documented by a PPAP. 

PPAPs are crucial to safe car production because they are the quality assurance for its parts. Yet today, most PPAPs are handled using spreadsheets or google docs, solutions cobbled together by individuals at different companies. They’re not fast, they’re not efficient, and worst of all, they’re not trustworthy enough for such important information. 

PPAP Manager aims to solve this problem for the global automotive industry by providing a single tool that documents parts as they go through all the many suppliers in the value chain, making these records both accessible and accurate, so that you know that the brakes on your car won’t fail. They’ve been checked. They’ve got a good PPAP tracing them back through production, assembly, and testing. 

René has started a few companies, and he got the idea for PPAP Manager from his co-founders, Vinnie Delgado and Jeefb Santos, who have worked in the auto industry for more than 24+ years altogether. They were looking for opportunities in manufacturing that would solve a defined and important problem, and had plenty of room to scale. PPAPs provided exactly the right kind of opportunity. 

“The land of opportunity for the automotive industry”

“PPAP Manager fits our investment thesis to a T,” said Ted Serbinski, Managing Director of Techstars Detroit. He saw the same opportunity that René did, loved the founding team, plus he knew what Techstars Detroit could do for the company. “PPAP Manager should be doing business in Detroit, and Techstars is the best way to make that connection,” Ted said. 

Ted’s on a mission to change entrepreneurs’ perception of doing business in Detroit, and one of his favorite techniques is to bring in entrepreneurs from all over the world—and then let the city, and the Techstars experience, speak for themselves. In five years, he’s brought 54 startups to Detroit from eight different countries—the 2019 class alone is 60% international, with founders hailing from five countries outside the U.S. 

“Detroit is the land of opportunity for the automotive industry.” —René Pons, Founder of PPAP Manager

For Ted, the message is clear: If you’re a startup that does business with automotive or manufacturing, you need to get to Detroit.

René agrees. “Detroit is the land of opportunity for the automotive industry,” he said. “There’s no better place for us to be.” René sees that more and more companies globally are trying to get standards working, and that Detroit is a great place to work with many of these global auto companies, to spread these standards quickly. René is hoping that Techstars Detroit will get PPAP Manager to a proof of concept in partnership with one or more of the program’s corporate partners—who he sees as hungry for the kind of quality assurance that his company can provide. 

Rene Pons, Founder of PPAP Manager

Power of the Network

René knows how important connections are—one aspect he values in the Techstars accelerator is its diverse corporate partners, including Lear Innovation Ventures, Ford X, AAA, Avanta Ventures, USAA, Nationwide, Honda Innovations, and PlanetM. 

He knows the importance of great connections—to other entrepreneurs, mentors, and investors, as well as corporations—for helping startups grow because he’s seen this power, over and over again, as a Community Leader helping to run Techstars Startup Weekends across Central America. Since 2012, René has organized over a dozen Techstars Startup Weekends, most of them in Mexico, but also as a facilitator in Honduras, the Dominican Republic, Colombia, and one in Seville, Spain, when he was briefly living in Madrid and wanted to get involved in the local startup community. Two years ago, he organized six Techstar Startup Weekends at once, all in different cities, three in one weekend and three the next. He describes himself as “the crazy organizer who tries to do different stuff.” 

René loves Techstars Startup Weekends because they change how people think, and then give them the tools and connections to start putting that change into action. “The first thing we need in Latin America is to change the way we are thinking,” René said. “We don’t have enough people building or starting new companies. People need to realize that they can take control of their lives and start solving the problems that they see.”

He sees the first step as getting people to try new things—like attending a Techstars Startup Weekend—and from this experience, new entrepreneurs and new companies will grow. René is happiest when he sees the locals in a community step up and start working. As a Techstars Community Leader, he knows the formula for a Startup Weekend, and his goal is to get the event rolling in each new community, and then leave the team there to keep it going. This is how the events—and the entrepreneurial spirit they engender—spread. 

“You learn a lot by getting involved and Giving First.”— René Pons, Founder of PPAP Manager

To René, Detroit is a model for where he hopes to see Latin American cities get to, with an evolving startup ecosystem and lots of opportunity for making connections and building businesses. 

Give First Wherever You Go

And, of course, René plans to get involved in the Detroit startup ecosystem, above and beyond participating in the accelerator program. “Wherever we go, we need to get involved. I’m looking forward to knowing people and to start sharing with them and learning from them,” René said.

René lives the Techstars value Give First, and he practices it wherever he goes. “You learn a lot by getting involved and Giving First,” René said. “The connections you get from being there and sharing with the community—you cannot put a price on it.” 

How Startup Ecosystems Grow

At first glance, Chihuahua and Detroit may not seem to have much in common. But now they share René Pons, and that’s a bond that will show results, we suspect. Maybe one day soon, they’ll both be known as startup hubs—growing companies, attracting talent, and transforming their regional economies. Entrepreneurship is powerful.  

Detroit has become a place that startups want to move to. Five years ago, post-bankruptcy, Detroit was a hard sell for startups. Today the supportive startup ecosystem and the affordable cost of living make it a desirable—and smart—place to start a business. 

René and PPAP Manager have moved from Chihuahua to Detroit for the three months of the accelerator program, and René plans to get involved in the local ecosystem. It may even make good business sense to keep PPAP Manager in Detroit long term. 

But that doesn’t mean René has abandoned his home, or the Chihuahua startup ecosystem. Long term, his dream is to invest in small companies in small cities all over Mexico. “There’s lots of talent with great ideas in Mexico,” he said, “But they don’t have the money to build a prototype. At that early stage, these companies need more support.” René wants to give that support, and be an angel or seed investor who helps make this startup ecosystem go. 

Ask Chris Heivly, Techstars VP of Innovation, about how startup ecosystems develop, and he’ll tell you that “ecosystem development is all based on success through a thousand nudges.” Connectors and believers like Ted and René provide these nudges constantly, doing their part to grow their ecosystems. 

They believe that entrepreneurs create a better future, and they’re doing their part to make that better future—one PPAP, one Techstars Startup Weekend, one company, one accelerator, one city at a time.