Techstars is a worldwide network that helps entrepreneurs succeed. To do this, we work with forward-thinking partners around the world to create unfair advantages for our founders.
METRO, one of the largest international food wholesalers, has been catering to hospitality businesses since its foundation over 50 years ago, and serves as a partner to founders to help innovate in the hospitality and retail industries.
A few years ago, METRO realized that in order to succeed in the future its key customer group, restaurants and hotels, had to increase their adoption of digital technology.
At the same time, numerous tech startups that see the opportunity are trying to offer solutions that could ease the life of the restaurant owner, improve customer experience, grow the business and so on.
METRO thought of bridging the two and giving startups an unfair advantage through access to its network and its customer base.
METRO CEO Olaf Koch was in New York in 2014 when he received an invitation to attend a Techstars and RGA Demo Day. Olaf’s plan was to only stay for 30 minutes, but he ended up staying much longer. The time Olaf spent at that Demo Day inspired him to do something similar to help progress METRO’s customers’ digital transformation.
In 2015, Techstars and METRO came together to launch the first hospitality focused accelerator in Berlin.
After 2 successful iterations of the program and 21 companies later, we’ve launched an additional accelerator program with METRO in Berlin, this time focused on Retail. Applications for that program have recently closed and the program commences on June 12th. But applications for the next METRO Accelerator for Hospitality, Powered by Techstars, are now open, you can apply here.
By the end of 2017, we will have invested in 40+ startups in the hospitality and retail space.
How can a corporate accelerator add value to entrepreneurs?
To provide the best resources for our founders, we work with the best partners to help achieve success. Here’s what we’ve learned about how an accelerator programs with a corporate partner adds value to founders:
Mentoring & Network
Corporate executives tend to have a very in depth understanding of their customers’ needs. They have a global view of these problems and can give both insights and offer to make introductions to founders.
Being heavily associated with a trusted household brand name like a corporate partner brings a certain amount of comfort to new customers. If a company like METRO trusts your startup, then others can, too. It can enhance a startup’s profile and build trust with your customers.
Corporate partners can function as a distribution channel for a startup’s product. METRO, for example, operates a digital salesforce that markets digital products to restaurants and hotels. This salesforce can distribute products to paying customers via a METRO pilot program in one of five cities: Berlin, Paris, Vienna, Milan or Barcelona.
We caught up with a few companies from past programs to hear directly about their experience and what they learned from working with corporate partners:
“The METRO Accelerator, powered by Techstars, stood out from other programs because of METRO’s board level commitment. We enjoyed one to one access to CEO Olaf Koch and his direct reports throughout the 3 months of the program, a privileged position to gain business and insights into the HoReCa and retail markets. Best of all, the collaboration continues after the accelerator.”
– Adrian Maseda, Co-founder, Cheerfy
“If you combine Techstars’ business excellence, their startup knowledge, and their huge network of mentors and investors with the industry experience and direct customer access of METRO, great things can happen. We experienced an intensive and challenging three months with hands-on support from the CEO down to each sales representative, gained deep insights to our industry and even continued the cooperation with METRO in various projects beyond the accelerator. We truly wouldn’t be where we are today without this experience, and highly recommend applying for a program like this.”
– Jan Saupe, CEO & Co-Founder of Lunchio
If your hospitality tech company is ready, check out the next METRO Accelerator for Hospitality, Powered by Techstars, starting in September. You can apply here.
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 30th. If you apply before April 30th, we will be able to help give you feedback on your application.
There is no shortage of advice on how to get funded – Lots and lots of sophisticated advice.
Does it work? Yes.
Does it work for everyone? No.
For whom does it work then? It helps investable companies to get funded.
I have now invested in 27 startups over the last few years. Admittedly, we live in a great funding environment.
In all these investments, I have only seen a single company that should have been funded fail to raise. All other well performing companies raised a round. And in addition, a few that may have been less deserving.
The reason? Angel and VC investors by now are pretty experienced when it comes to picking companies. There are more active investors than high quality startups – the good ones get funded.
When we launch an accelerator program, I say the same thing to all founders: it is not my job to get you investors. It is my job to help you build an investable company. Once you have that, you should be able to raise the capital you need.
How do you build an investable company?
In my experience, founders go through some stages:
- Idea and first customers
- Insight and more customers to validate insight
- Building a marketing, sales, product, etc. machinery
- Building out the business
Each time, when you progress from one stage to the next, you become more investable. More progression, more investable, etc.
Now you know why it is called an accelerator. We work with companies to accelerate them to the next stage.
www.metroaccelerator.com is focused specifically on those startups that have a focus on hospitality and food tech.
Over the last three months with the METRO Accelerator, I have talked to 100+ founding CEOs and hundreds have already applied for the program.
What I am looking for is simple: Great founders who have tangible insight into their market.
I am becoming really excited because this is what I am finding:
- Online restaurants focused in specific foods and highly scalable cooking and delivery options
- Very low cost and marketable SAAS solutions
- Staffing solutions for hospitality businesses,
- Startups simplifying the supply chain for restaurants
- In restaurant / venue ordering solutions
- Mobile apps where restaurants can pull in physical customers
- New types of customer care software, e.g. Bots for hospitality
- Entirely new types of food
These are companies with experienced serial entrepreneurs, founders who have experience with high-growth startups, as well as complete first timers. In most cases, these teams have worked together for more than one year, all with real insights into their customers, products in the market and working on growing their businesses.
When I started three months ago, I didn’t know what to expect. Last year, we found a large number of startups at the idea stage. Now, we are seeing far more startups that have initially validated their market and are working on building a scalable marketing and sales machinery. That is actually a great match with what METRO is looking for.
If what I have already seen is an indicator of what else I will find, then I am super stoked.
Don’t be shy reaching out, you don’t need to get a warm intro to talk to us.
Last week I talked to a young, first time founder. Before we even talked about Techstars, he said, “You know what, we have raised a little bit of cash, we have a good advisor, we are probably okay, we don’t need an accelerator.”
You cannot imagine how much I cringe when I hear that kind of statement.
It is very difficult for me to convey to first time founders what lies ahead of them. Indeed, if they knew, they wouldn’t do it. “You don’t know what you don’t know.”
Building a successful startup is incredibly difficult. The reason is this: In order to build a great startup, EVERYTHING has to work out for you. EVERYTHING.
The CEO, the team, the market, the business model, the pricing, the marketing, the sales, the customer success, the design, the engineering, finance, HR, recruitment, culture, your investors, your board, your advisors, your competitors must screw up, the world changes in ways favorable to you, the tech stacks shift in your favor. And more. EVERYTHING.
If only ONE of those things goes really wrong, you will likely shut down. ONE key aspect wrong, company likely dead. You need to master ALL of them. And if you want to build a world class company, all of these better be world class.
That is very, very hard.
The question every founder needs to ask themselves is whether they think they are world class at those things. Do you know what it takes to be world class? Do you know how to recognize it? Where would you find those kind of people? How would you hire people who are? Which ones do you hire first? How much do you spend? Could you even afford any of them? What would you do with them once you hired them?
I am now 40 years old. I have been involved with startups for the last dozen years or so. I can tell you one thing with total conviction:
If I were doing another startup, I would try to get the best possible people around me. There are so many things that I don’t know and so many things I am not good at, and definitely not world class in many of them. The only way to overcome this is having incredible people around me. As many and as early as possible.
In this context, think again about a world class accelerator. In that accelerator, you of course get some cash, but here is what you really get:
An advisory team of 100+ mentors, access to a global network of thousands of founders who are on your side, the accelerator staff, the LPs in their funds, the corporate partners, the sponsors, the companies who provide perks and everybody else who is involved. They all work for the startups, because they want to, not because they get paid to do it.
I wish accelerators had existed 10 years ago. It is the primary reason I do what I do right now. It is the reason why the Managing Directors at Techstars do what they do. We do this, because we wish somebody had done it for us.
I personally think that getting everything I describe above for 6% founder equity is most likely the best way to spend less than 1/3 of a 20% option pool one could ever imagine. Maybe I am wrong. But then the startups I have been involved with had up to $300m annual revenue and 500+ staff. The best CEOs of these startups had the best advisors and mentors very early on.
Something to think about.
Applications are now open for the METRO Accelerator, powered by Techstars. Apply here!
KPIs (Key Performance Indicators) are the backbone of Techstars, and my cofounders and I took them to heart every week during the program. But when we started, none of us really knew what it would take from us to maintain a steep upward curve with the clock ticking.
The backstory was never discussed in our weekly KPI meetings, only the impressive figures. In this post, I want to share what growing 7% week to week meant for us in our day to day life during the 3 months including key strategies and challenges. Let’s face it, for any organization to grow at such a pace, there has got to be something crazy going on in the background.
Planting scenarios in our minds early in the game
Our goal was to boost revenue to put ourselves in a good position to raise our first round. GroupRaise makes money from our restaurant partners paying $39 for every fundraiser scheduled on our site. This made our target straightforward – X number of events scheduled by the end of January.
Email has been our key marketing channel, and considering our previous conversion rates our ultimate goal suggested that we increase our email marketing in size and frequency sixfold. This in turn meant each step of the way from research, lead collection, data cleanup, and draft write-up required at least 4 or more times the previous capacity. We decided to put 90% of our effort into championing what’s worked previously (college markets) and 10% on trying new channels. We also brought on one new hire and outsourced a ton of redundant work in advance to get ready for the biggest outreach we’ve ever done.
In retrospect, having a detailed scenario with the help of clear KPI goals not only pulled us together to mentally prepare for one big goal that seemed impossible, but also gave us a better sense of what every week and every day should look like.
Working with staff
Techstars is known for its robust mentor network, and we definitely learned a ton interacting with people that we would otherwise never have gotten a chance to meet. What we did not expect going into the program was how important of a role the staff was going to play in scaling our business.
Our two program directors, Rob and Alex, both had extensive experience in running multi-million dollar companies prior to the program, and we had to talk to them every single day about everything. As you can imagine, a big difference between staff and mentors is that the former has another two or three layers of understanding of what you worked on last week, the amount of progress made this week, and what your biggest pain is just by breathing in the same room.
In our case, after a series of conversations with Rob we got to redefine our position in the space – GroupRaise was in the group booking business rather than event hosting. This simple change in our messaging ended up tripling our conversion rate in email marketing campaigns to restaurants. At the same time, associates were readily available when we needed an extra hand (which was always the case) or feedback on new initiatives. All we had to do was to ask.
Being proactive about feeling worn out
The pressure of maintaining growth is immense, and feeling overworked is something we accepted as part of the program. However, this does not mean that we shouldn’t be proactive about avoiding wearing out, because it can be really detrimental.
We realized that when the amount of work goes 10x in all directions in a matter of days, trying to divide the work evenly is never a smart approach. This wasted everyone’s time and talent while losing the sense of ownership. Instead, it required each founder to be extra mindful about how to empower one another and promote ownership of their work. Especially when everyone does everything together, promoting ownership gets SUPER tricky and important.
So the bottom line is instead of growing a mentality of “I am doing this, so you do this.”, you should adopt something in the lines of “Since you’ve got that taken care of, I will make sure this is squared away. Let me know if you need any help.”
This sounds like marriage counseling, but we learned that how you cope with stress and panics determined the quality of founder relationships, which will also shape your company culture down the road.
Last year we announced the launch of the inaugural class of the METRO Accelerator.
One year later we look back on the 11 companies of the first class who have made enormous progress in a relatively short period of time. We are grateful to our mentors who have helped these companies, coached them, become customers or have invested in them. Thank you!
What impressed us most about the engagement with METRO in 2015 was the breadth and depth of its connections in the industry. METRO is connected to the food industry in 27 countries and its engagement with the founders in helping them build their companies was powerful and impressive.
If your startup is looking for traction in the food or hospitality industries, then the METRO Accelerator is for you.
It is with great pleasure that we announce today that applications are open for the second class of the METRO Accelerator in Berlin!
Hospitality and food tech startups from anywhere in the world can apply, regardless of whether you have already raised a Series A round or whether you are an experienced team starting to work on your next venture.
Applications will remain open until June 20, 2016. The program will begin on September 12 and Demo Day will be on December 7.
The program will take place in the heart of Berlin and will be run entirely in English. As with all Techstars programs, we invest €120k into each of the ten startups who will streamline and improve the way hotels, restaurants and catering companies work.
Metro Accelerator, Powered by Techstars: Creating an unfair advantage for Hospitality and Food tech startups!