Meet 12 Startups from Techstars NYC Winter 2018 Program

I joined Techstars in 2013 and ran my first program in Spring of 2014. It has been an amazing journey, and I am so grateful to have the opportunity to work with incredible group of companies during my 7th program this winter.

Huge shout out to KJ Singh and Jill Canning who built Techstars NYC program into what it is today together with me. So very much appreciate everything that they’ve done for the founders, and NYC tech community.

Every program, and every group of founders is different and special in its own way. This winter, despite having absolutely terrible weather, we worked with stellar, very special and diverse group of founders and businesses.

We had 5 companies from NYC, and companies from Thailand, Spain, Romania, Austria, Detroit, LA and Montreal. 6 companies have female CEOs and 8 companies had female co-founders. Companies tackled industries ranging blockchain scalability, food-borne illnesses, security, storage, addiction recovery, genomics, construction, data science, recruiting and tracking KPIs.

The companies have made strong progress during the program, and have achieved very significant growth.

MEET THE COMPANIES

Acculis

Acculis is using 3D models to help reduce errors in construction in the office and on-site.

Acculis
Acculis, Techstars NYC 

 

Construction industry is wasting $140BN a year on rework. Lack of integrated and cohesive collaboration tools leads to expensive errors. Acculis is building state of the art communication and collaboration software for general contractors. The platform makes it easy to collaborate around 3D designs, to identify and fix errors and deviations before they become expensive rework problems.

Acculis is a team of 4 NYU grads passionate about construction space. The company received several signed LOIs from prominent construction and engineering firms, and built a strong pipeline of prospective customers. They are beginning trials on projects with combined value of $4.5BN. Reach out to founders@acculistech.com for more information.

Altru

Altru is a mobile-video platform that helps companies with hiring and training through employee-generated content.

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Altru, Techstars NYC 

 

Content for Recruitment Marketing today is largely ineffective. Companies fail to attract candidates and provide insights on what it is actually like to work with specific teams at a company. Altru is changing the status quo with their innovative video platform for recruiting. Altru helps companies engage their employees in the recruiting process, and tell authentic, insightful stories about the company through employee-generated video.

CEO, Alykhan, was previously head of enterprise sales at WayUp. He started Altru with CTO, Vinnie, who is a Carnegie Mellon grad and former co-founder of PublicStuff. Since November, Altru has grown to close a group of enterprise customers including Unilever, L’Oréal, Dell, Digital Ocean, and Ultimate Software. Altru has grown ARR by 3x in the last 3 months. The company also has an active pipeline of Fortune 500 companies with over $2 million in potential opportunities. Reach out to founders@altrulabs.com for more information.

The Clear Cut

The Clear Cut is a D2C diamond engagement ring company that eliminates the stress and confusion of buying a diamond engagement ring through personalized service and expert education.

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The Clear Cut,Techstars NYC 

 

Today’s diamond buying experience is broken. You have one of the two bad choices – go to traditional retail and get overcharged, or go to one of the online marketplaces and get overwhelmed with choices without any guidance or help. The Clear Cut solves this problem by combining a curated selection of high quality diamonds with a concierge service. The Clear Cut makes it easy for customers to make tradeoffs and pick the engagement ring that fits their budget.

Olivia, CEO of The Clear Cut is a 4th generation jeweler. She met her co-founder Kyle, who is a Columbia MBA grad, and was previously a founder of a diamond mining company, 5 years ago while they were studying diamonds at GIA. The Clear Cut sales have been growing 100% quarter over quarter. The Clear Cut amassed 75K passionate followers on Instagram. Reach out to olivia@theclearcut.co for more information.

KPI Ready

kpiReady automates data collection and reporting so that the team, investors, and stakeholders align on goals from Day 1. Smart growth starts early. We make early stage CEOs make better decisions by focusing on the KPIs that matter.

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KPIReady, Techstars NYC 

 

Measuring KPIs from day one is an essential thing for success of any startup. But figuring out what to measure and having the discipline to track things consistently is hard. kpiReady solves this problem with simple and elegant platform for startups and larger companies that helps them track their metrics. kpiReady recommends KPIs based on sector and stage and has easy to use UX that makes tracking KPIs easy and simple. The platform efficiently generates reports to help internal and external stakeholders document growth and diagnose issues.

KPI Ready was founded by Ali Goldstein Norup together with a long-time Techstars mentor and supporter Dane Atkinson. kpiReady is in our incubation track and started the company right before the start of the program. They are just reaching alpha on their product, focused on addressing the pain point of data collection and reporting. From there, kpiReady will streamline and automate the processes of report and share KPIs with founders, the team, investors, and other stakeholders. Reach out to founders@kpiready.com for more information.

Kyso

Kyso is where you publish, share and extend data-science studies.

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Kyso, Techstars NYC 

 

There is a data explosion around us, and data science is on the rise. But sharing and reusing data science studies is still not easy. Most work is published to Github, which is great for engineers but not great for the rest of the world. Kyso solves this problem with simple and elegant blogging platform for data science. With Kyso every notebook is clearly rendered like a blog post on Medium or WordPress. Kyso also makes it easy to clone and extend data science studies, making it easy for data scientists to build on each others work.

Eoin, CEO of Kyso, experienced this problem first hand while doing a PhD in Quantum Computing. Together with his co-founders Helena who previously founded a machine learning research company, they decided to go after this problem. In just 9 weeks, the number of studies on Kyso has been growing on average 50% WoW and have 300+ usable studies. Examples: Analysis of life expectancy vs GDP per capita and Prediction model for employee churn. Reach out to founders@kyso.io for more information.

Loom Network

Loom Network provides scalable infrastructure for building blockchain apps on top of Ethereum.

Loom
Loom Network, Techstars NYC 

 

Blockchain holds an awesome promise to be a new kind of distributed database and ledger. The problem is that due to the way blockchains are designed they are hard to scale. Loom Network provides the first ever infrastructure to make it easy for developers to build Dapps that get the trust and security of Ethereum, while maintaining the speed and costs to run efficiently at scale.

Loom Network’s co-founders Matt, Luke, and James have deep experience in developing large-scale applications, and were early in the blockchain space.
The founding teams’ motto is – we don’t write white papers, we ship code. They launched the company last May and have been very busy since! First, Loom Network developed Cryptozombies – a popular tutorial for writing Ethereum DApps using Solidity. They also launched DelegateCall – the first ever scalable Q&A site built on blockchain. Just recently, Loom Network unveiled its platform and infrastructure to be broadly accessed by developers.

Reach out to matt@loomx.io for more information.

OneStep

One Step provides b2b patient monitoring software to sober homes that helps them operate their homes more efficiently.

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One Step, Techstars NYC 

 

There are 23 million addicts, and over 5 million cycle through rehabs and sober homes. The relapse rate is 90% – we have addiction epidemic in United States. The problem is lack of adequate software tools that help monitor patients. One Step provides b2b patient monitoring software to sober homes that helps them operate their homes more efficiently. We provide a dashboard for staff to enter information and daily behaviors of the patients. There is also a mobile app for the patients that geolocates them, allows them to log AA meetings, check their schedules and view items shared with them.

One Step CEO, Eva, is a Harvard Law grad and serial founder. She realized there is a big need and a big opportunity in this $60 billion dollar market. Since launching the company in August, One Step has over 200 sober homes on their platform and growing 60% MoM average growth. Eva is aiming to get to 2K sober living homes by the end of the year. Reach out to eva@onestepsoftware.com for more information.

PathSpot

PathSpot protects food-service companies and their customers from the threat of food-borne illness by scanning for harmful contamination on employees’ hands.

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PathSpot, Techstars NYC

 

50 million Americans get sick from food-borne illness every year and half come from poor hand washing. Average business gets fined $75K per incident and a lot go out of business. PathSpot solves this problem with an elegant device and software for protecting businesses and customers from food-borne illness. Employees simply scan the hands and know when they need to re-wash. Establishment’s management gets a dashboard that helps them understand gaps in sanitation procedures.

Christine and Dutch, two biomedical engineering graduates from Duke University launched PathSpot just a few months ago. Since launch, PathSpot has scanned over 45,000 hands, is installed in 10 venues, and has been consistently growing ~15% WoW. PathSpot has planned installations with Chopt, Sweetgreen, Plated, Sodexo, and Burger King test kitchen. Reach out to founders@pathspottech.com for more information.

Rootine

Rootine provides world’s first personalized vitamin mix based on your generic make up.

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Rootine, Techstars NYC 

 

Each of us is unique, yet all of us get the same vitamins. Generic vitamins that are on the market today contain ingredients for hypothetical average person. So called personalized supplements based on questionnaire aren’t scientifically accurate. This is why founders of Rootine set out to go after $30BN supplements industry with first ever personalized supplement mix based on your own DNA. To use Rootine, you can either upload your existing sequence or get DNA test through Rootine. You then answer a couple of questions about your diet and exercise and provide optional blood test. Based on this information Rootine ships you unique, customized just for you, supplement mix.

Daniel and Bianca co-founders of Rootine have years of experience in health tech. Daniel has PhD in Biotechnology, and spent years studying how to create the vitamin mix with the perfect form factor, and perfect results. Rootine is now launching in USA and was previously tested with close to 1,500 beta users in Austria. Reach out to founders@rootinevitamins.com for more information.

Streamline Genomics

Streamline Genomics is a platform to help clinicians and researchers benefit from genomic sequencing without the need for data analysis expertise.

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Streamline Genomics, Techstars NYC 

 

Although DNA sequencing is becoming a commodity, analyzing the terabytes of data inside genomes remains a huge challenge. Clinicians in most hospitals still don’t have adequate analysis tools for this data and as a result, over 650,000 cancer patients in America are impacted every single year, representing 40% of the 1.6M cancer patients diagnosed. Streamline Genomics is creating a platform for analyzing genomic sequencing starting with cancer patients. Clinicians can upload patient genomes to Streamline Genomics, run analysis and rapidly identify key mutations that are driving patient’s cancer. Clinicians can then use this information to tailor the patient’s treatment based on their specific mutations.

Josette and Brian, co-founders of Streamline Genomics, both hold PhDs in Genetics. They launched the company right before the program and are going through our incubation track. The company already has a pilot with a hospital in Montreal, a partnership with 4 other hospitals in eastern Canada, and a strong pipeline of interested hospitals in the US.

TypingDNA

TypingDNA recognizes people by the way they type.

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Typing DNA, Techstars NYC 

 

Today’s two factor authentication (so called 2FA) is inconvenient, costly and not fully secure. Users are sick of getting text messages with codes on their phones and having to type these codes. For businesses, these text messages come with a hefty price tag. As a result, companies either annoy their users or don’t use 2FA at all. TypingDNA is going after this $10BN+ with a simple and elegant solution – 2FA based on the way you type. The company developed sophisticated platform and API that leverages machine learning and helps recognize users by the way they type.

TypingDNA is a brainchild of Raul Popa, CEO and Data Scientist from Romania. After recently launching 2FA alternative, they were covered by TechCrunch and voted #1 on Product Hunt. They also just recently won best startup in Romania award. TypingDNA is now getting 150k+ API requests/month and have been growing API calls by 45% MoM. Reach out to founders@typingdna.com for more information.

Vertoe

Vertoe is an on-demand short term storage provider.

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Vertoe, Techstars NYC 

 

Airbnb is awesome, but once you check out where do you store the bags? In general short term storage in cities is a problem. Whether you are a tourist, going to a concert or a sporting event, dragging around your gym bag or professional equipment, cities don’t really have good options for storing suitcases, bags and other things we carry around. Vertoe wants to change that with a simple, on-demand storage platform. When you need to store your stuff, head over to Vertoe, search for locations nearby to book and access space within minutes. Today Vertoe offers inexpensive and flexible storage solutions in local shops around New York City for as low as $5.95/day/item.

Sid and Neha, the co-founders of Vertoe, launched the company after experiencing the problem themselves. They launched the company in 2017, and now have 70+ stores in NYC. Since launch, Vertoe stored over 30,000+ bags, and has been growing at average 10% WoW avg. Reach out to founders@vertoe.com for more information.

WATCH SELECT PITCH VIDEOS

THANK YOU MENTORS, ALUMNI & SPEAKERS

We are incredibly lucky here at Techstars NYC to have support from the amazing tech community in NYC, our mentors, our 100+ alumni companies, and amazing speakers.

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Speakers, Techstars NYC

 

We are truly lucky to have incredibly engaged alumni, who are coming back to help the founders from business introductions to investor pitch. Alumni is a constant presence in Techstars NYC program and really shape the program. Special thank you to Brian Jeong, Sarah Adler, Erica Jain, Nathaniel Harley, Susannah Villa, Rob Douglas, Neha Singh, and Danielle Cohen-Shohet.

We felt really supported by 80 mentors who worked with the companies during the program — huge thank you, as always for your support.

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Mentors, Techstars NYC W18

 

Here are specific shout outs from the companies:

Acculis – Chris Fraser (VP of Strategic Accounts, GreatHorn), Yaakov Zar (Co-Founder & CSO, Dispatch), Ian Strug (Co-founder, Virgo), Jason Saltzman (Co-Founder and CEO, AlleyNYC), Jonny Cohen (Senior Associate, Thyra)

Altru – John Cantarella (Head of Global Partnerships, Facebook), John Hill (VP of Network, Techstars), Fayez Mohamood (Co-Founder & CEO, Bleucore), Sabrina Kelly (VP of People Operations, Techstars), Matt Straz (Founder and CEO, Namely)

The Clear Cut – Max Wendkos (Product Design Lead, Aaptiv), Danielle Cohen-Shohet (CEO, GlossGenius), Brian Jeong (CEO, Hawthorne), Matthew Friesen (Head of E-Commerece, Global Brands Group), Carrie Reynolds (Executive-Level Consultant, CSR Consulting)

kpiReady – Mohamood Fayez (Co-Founder & CEO, Bleucore), Mitch Wainer (Co-Founder, DigitalOcean), Fabiola Carcamo (VP Product, Vroom), John Hill (VP of Network, Techstars), Weston Stearns (VP of Growth, DataCamp)

Kyso – Jonathan Cornelissen (CEO, Datacamp), Adam Johnson (CEO, IOPipe), Alexis Le-Quoc (CTO, Datadog), Adam Feldman (Product Manager, Sidewalk labs), Max Wendkos (Product Design Lead, Aaptiv)

OneStep – Susanne Mitschke (CEO, Mindmate), Rahul Sidhu (CEO, Spidr), Ryan Shank (CEO, PhoneWagon)

PathSpot – Tobias Peggs (CEO, Square Root Urban Growers), Josh Hix (Co-Founder & CEO, Plated), Nick Devane (CEO, Foodworks), Jonny Cohen (Senior Associate, Thyra), Diana Pincus (Vice President, Supply Chain & Quality, littleBits), Mike Montero (Co-founder & Chief Technology Officer, Resy Network), Rob Edell, Adam Casson (co-founder, Inscope Medical Solutions), Brett Jackson (Managing Director, V1 VC), Ben Schultz (Hardware Project Manager, Peloton Cycle), Alexandre Winter (Founder & CEO, Placemeter), Frank Rimalovski (Executive Director, NYU Entrepreneurial Institute), Sean Grundy (Co-founder and CEO, Bevi), Jenny Fielding (Angel)

Rootine – Susanne Mitschke (CEO, Mindmate), Fiona McCarthy (VP of Product, Prolific Interactive)

Streamline Genomics – Chris Fraser (VP of Strategic Accounts, GreatHorn), Ian Strug (Co-founder, Virgo), Matt Schwartz (CEO & Co-Founder, Virgo)

TypingDNA – Joel Wishkovsky (Founder & CEO, Simple Contacts), Kevin O’Brien (CEO, GreatHorn, Techstars ’15) , Matt Kozlov (Managing Director, TS Healthcare Accelerator) , Jason Grad (Founder and CEO, Bstow), Thierry Schellenbach (CEO, Stream)

Vertoe – Dan Herman (CEO, Welcome), Todd Saunders (CEO, AdHawk), Trey Sisson (Founder), David Lapter (Chief Financial Officer, Dashlane)

THANK YOU ASSOCIATES

We feel very lucky to have had a stellar group of associates that absolutely crushed it during the program. Every single week we heard from the founders how helpful they found the associates. Abby, Alice, Jeff, Grace, Kyra, Khalil, Nastasia – thank you so much working really hard and making a difference.

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WHAT FOUNDERS LEARNED IN THE PROGRAM

Alykhan, CEO of Altru

If you aren’t being rejected more than accepted, you’re not asking for enough, reaching high enough, and valuing yourself enough. Try new things, ask people who scare you to help you, and begin to believe failing really is learning. If you’re winning constantly, you’re in a rut.” – Tarah M. Wheeler

Vinnie, CTO of Altru

The importance of networking, and how every person you meet, in any context, has the potential to bring about another hire, an investment, a new customer, or access to an even broader network.

Olivia, CEO of Clear Cut

I learned in Techstars was that regardless of your industry metrics are critical and actually enable you to think bigger picture. Prior to the program I was so in the weeds that at times I didn’t know where I was going. I also assumed KPIs were more relevant for hard-core tech companies. Today when I speak about our business I find myself using numbers in nearly every sentence.
Ali, CEO of kpiReady

Kyle, COO of Clear Cut

I learned to not let “perfect be the enemy of better”. At times we were hesitant to move ahead because we knew our plans were not fully formed. The team at Techstars encouraged us to just focus on getting better each and every day. As a result we have had incredible traction in the program!

The power of giving first.  It amplifies and deepens everything.

Eva, CEO of One Step

Get good at sales. Everything at its core is sales – fundraising, acquiring customers and recruiting.

Christine, CEO of PathSpot

Techstars will not only make your business, your customers, and your team better, but it will also make you as a founder stronger if you fully immerse yourself in learning from the amazing staff, cohort, and mentors that it will expose you too.

Josette, CEO of Streamline Genomics

It’s never too early to join Techstars.

Raul, CEO of TypingDNA

  1. Being from eastern Europe we know how hard life can get at times, we’re trained to survive in difficult situations and because of that we didn’t expect to learn so much. We ended up improving our website, demos, marketing strategy, conversion funnel strategy, our products, the way we communicate, and ultimately Techstars helped us gain a larger vision about where our technology fits in the grand scheme of things.
  2. We thought that “do more faster” has to do only with quantity, the amount of time you put into something shall translate to a larger deal of work being done. Putting everything at speed allowed us to super focus and develop a state of flow where we understand sharper and deeper what has to be done to succeed in our business.
  3. Mentors, alumni, associates, program managers, they’ve all put their ass on the line for us. When you’re a small startup doing something like we do, you feel a lot of skepticism around, and that is good to a certain degree but it is not productive. Having people around set up to help you succeed, that is incredibly productive.

Sid, CEO of Vertoe

  1. Focus on deep funnel (product) – Just by focusing and nailing the deep funnel (higher conversion rates, fast and great performing website), you’re able to maximize the efficiency of your existing marketing channels while putting your new channels in the best position to generate great ROI. For as little as a 5-10% improvement in conversion rates, you boost all your marketing channels!
  2. Networking and mentorship – There are so many good mentors who are always willing to help. Don’t hesitate to reach out as you’ll be surprised by the #GiveFirst value that’s ingrained in Techstars.

Neha, CMO of Vertoe

Although there were so many other learnings in the program, the biggest one for me has to be the importance of optimizing your deep funnels first.

Just by focussing on bottom up approach, we were laser focussed on refining our product to provide a seamless experience for our customers – it helped us increase our conversion rate, show week on week growth. This approach has also helped us improve the efficiency of our marketing spend.

Other learnings: Givefirst, Importance of tracking weekly KPIs.

GOOD LUCK TECHSTARS NYC WINTER 2018

We had so much fun this winter working together with this talented group of founders. Join us in wishing them best of luck!

2018TSNYC
Techstars NYC 

 

This was originally published on Alex’s blog








Global Applications for the Techstars Worldwide Network are Now Open!

There’s an often-repeated stat that 90 percent of startups fail. Not sure the source is, but no doubt that it scares entrepreneurs. At Techstars, we see the reverse in our accelerator portfolio – 90 percent of our startups are active or have successfully exited. Which statistic reflects your business? If you’re ready to succeed, take the next step and apply now to the Techstars worldwide network with more than 10,000 mentors, partners, investors and founders.

At Techstars, we are on a mission to help entrepreneurs succeed. Our mentorship-driven accelerator programs invest in founders to help them do more faster. Over the past 10 years we have helped over 1,274 companies grow and raise over $4.4 billion in funding, with a market cap of $11.4 billion. Now, we are excited to start the search for the next wave of companies to join our worldwide network!

We are reaching new regions and verticals around the world with our newest mentorship-driven accelerator programs. Applications are opening for five new programs:

Take the next step in your journey and apply to join the Techstars worldwide network with more than 10,000 mentors, partners, investors and founders.

This is more than a three month program, the Techstars worldwide network is for life. Listen to stories about our founders from Techstars alumni companies like SendGrid, ClassPass, and DigitalOcean.

Application deadline is April 8, 2018 for most programs. We will be announcing details for information sessions and online events where you can connect with Techstars founders and team, as well as mentors who have the experience and proven track record to help you succeed. Be on the lookout for more details soon!

When you apply, you can choose from any of the following locations and verticals:

For tips and resources on the application process, check out our Application Toolkit.








30 Questions Investors Ask During Fundraising

This post was originally published on Thoughts on Tech Startups and Venture Capital

We’ve written a lot here about fundraising and how it is a complicated, and at times, confusing process. To fundraise effectively you need to prepare and have a strategy, understand different types of investors, understand how much to raise and create an investor pipeline.

We also talked about a fundraising deck and how you put it together. In addition to the deck, it is helpful to prepare answers to typical questions that investors tend to ask.

Below we discuss the typical questions you will hear from investors and discuss how you might go about answering them.

1. Who are your customers, and what problem are you solving for them?

Investors are looking for a simple and clear answer of who you are selling to. They also are looking to understand how clearly you know the pain point, and how big of a problem it is for the customers.

This question also opens up a conversation about founder-market-fit, as well as helps investors think about the size of the opportunity.

2. What is unique about your solution? What is your unique insight?

Investors want to understand how you are proposing to solve the problem, but more importantly, they are looking if you have unique insight. Has anyone else thought about this before? How is it different from other solutions? Do you have a secret?

Seriously, investors want to know this because the more differentiated you are, the more defensible the business might become in the future.

3. How does your product actually work?

Investors naturally want to see the demo of your product, because a demo is worth 1,000 words. A lot of investors want to fund product-obsessed founders – founders who get lost in details of the product, who are super thoughtful and nerdy about features they built, and really understand customer needs.

Always show your product to investors and make the demo awesome.

4. What are your KPIs? How do you measure growth? How do you know you have product market fit?

What numbers do you use to drive the business? Lack of clarity or hesitation is a major red flag for investors. If you as a founder aren’t clear about your metrics or not measuring the right things, investors won’t believe that you can grow the business.

Investors want to make sure you understand and measure your conversion and sales funnels, activation, retention, magic moment, churn, CAC, LTV, etc. Investors want to know how you think about KPIs, look at your dashboard and understand how you think about growth.

They will likely dig in on how you think about attaining product market fit as well.

5. What is your traction to date?

The question of traction is really two-fold. First, investors are literally asking what is your traction. Second, and more important, how do you define traction?

Many founders mistake progress or effort for traction. On the other hand, investors think of traction as revenue and paying customers or significant growth in weekly and monthly active users.

6. What is the size of this opportunity/total addressable market?

How big is your market – a question that matters to a lot of investors. Why? Because VCs economics force them to only focus on very large markets. VCs look for big markets with lots of money so that when they own 20 percent of your business, they get a meaningful amount to return all or a portion of their fund when you exit. Otherwise, they don’t make money.

In addition, investors expect you to size accessible markets and do the calculation bottom up. Too many founders say they are in $1BN+ markets without realizing that, because of their business model, they can’t be addressed.

Spend time sizing up your actual addressable market using your pricing and growth projections.

7. What are your CAC and LTV?

This is another typical question that investors ask founders during each round of financing to establish how fluent they are in the business.

In the early days, founders are expected to know the terms and have an idea of what the numbers are, but it’s fine to say that you are early, and the numbers are likely to change in the future (typically CAC goes up and LTV goes down).

The cost of user acquisition conversation leads to the conversation about channels, marketing and advertising spend. If you are B2B company with direct sales, you will talk about cost of sales and how it will change at scale.

Life-time value of the customer is equally important. How long does it take to pay back the amount it cost to acquire this customer? How much money will you make on the average customer?

The LTV conversation touches on churn, revenue per customer and enables investors to understand how you think about your whole customer lifecycle.

8. What is your business model?

Naturally, investors want to understand how you make money. They want to know who your customers are and how are you planning to charge them. This question combines not just pricing, but strategy and tactics. If you make money indirectly, via advertising, they would then focus on how your acquire customers.

If you are a marketplace, the conversation turns to whether you are going after supply or demand and the incentives to be on the platform. What will be the expected average revenue per user? Will you have recurring revenue? All these questions get explored when investors ask about your business model.

9. How did you come up with your pricing?

This is probably a less common question in the early stage, but it is an important one. Investors are looking for you to demonstrate that you’ve done customer research and competitor research. They are also looking for you to acknowledge that you are early and the pricing is likely to change.

In addition, if you are currently free or have a free tier, investors will look to understand when are you planning to get rid of it and what the implications will be.

10. What are your unit economics?

Unit economics give essentially an inductive case for your business. For example, for Uber, a unit would be either one ride or one driver, depending on how you model it.

The key thing in unit economics analysis is to capture all associated costs and revenues and then see if you are actually making money. Some startups have poor unit economics initially and say they will optimize costs later.

Many investors, however, are now weary of this approach because as you scale, new challenges and new unforeseen costs may arise.

11. What is your go to market strategy?

The go to market strategy question is a really important one and is often misunderstood. Investors ask this typically when founders say that their product works for everyone. Investors are skeptical, as experience says that focusing on a vertical or a segment is typically better.

For example, if you are building developer tools, you could initially focus on freelancers and individual developers. Then once the product is solid, you can move upstream to mid and large enterprises. Tesla had the opposite strategy. It first made a high end car and has been moving downstream.

You can also focus on a specific vertical. For example, if you are a security software provider, you can first focus on insurance companies or law enforcement agencies. Having a focus narrows down the opportunity but allows you to really perfect the product and sales.

When talking about your go to market, investors are really looking to understand your strategy and why you think it will work.

12. What are your customer acquisition and distribution channels?

How are you planning to acquire customers? In the consumer world, you have paid and unpaid means. You can advertise or you can use content marketing, social channels and word of mouth. Investors want to understand how deeply you understand your channels.

The challenge is that most obvious channels often do not really work or aren’t cost effective. That is when you start your CAC via Google or Facebook ads is just too high. Investors are looking to understand if you figured out a growth hack / have an insight on how to acquire customers quickly and efficiently.

In the B2B world, investors want to know if you have an unfair advantage, like you’ve worked in the space before and have a rich rolodex. They are looking to understand if you are able to secure key partnerships that can help you distribute the product faster and win the market faster.

13. Why now?

This is a question that often goes unasked, but is certainly on the investors mind. Timing is everything, and really understanding why now is the time for your company to win is important. The VC industry is full of examples when something was too early or too late, and as a result, it didn’t work or didn’t get as big.

Before Facebook, there was Friendster, before Google there was Alta Vista. Even Uber wasn’t the first company to think of on demand rides, and AirBnB wasn’t the first company to let people host people in their apartments.

Before the current wave of VR and AI, there were at least 3 other waves. Why do we believe now is different? Why do we believe now it will actually happen? Some argue that we finally have enough cheap computing power and have evolved other key technologies necessary for VR and AI to go mainstream.

When investors are asking “Why Now?”, they are really asking about conditions of the market, context and state of society – dozens of factors that will make a difference between success or failure this time around.

14. Why you? What is YOUR Founder-Market-Fit?

We’ve written here before about the importance of Founder-Market-Fit and how most investors pay close attention to it. Investors don’t want to fund accidental founders. They want to fund people with deep domain expertise, massive vision and passion. Investors want to get to the bottom of why you started the business – do you have unique insight and unfair advantage?

15. Where did you grow up? Where did you go to school and work?

In addition to understanding if you know the space, investors want to understand if you are resilient and smart. The question about where you grew up is really a question about how hard you have had to fight through your life to get to where you are. If you grew up in a well to do family where you didn’t have to struggle, investors may not be as excited about funding you compared to, let’s say, an immigrant.

There are no hard and fast rules of course, but the environment you grow up in often defines your level of resilience. When things get difficult, and they always do, will you walk away? When you get knocked down, will you get back up?

When asked where you went to school, people look to see if you went to a top school, what you studied and what you learned. Sometimes this conversation leads to a common connection. Sometimes it is just a starting point for learning more about you. Investors are looking to assess your level of intellectual curiosity and honesty.

16. How did you meet your co-founders?

This is another interesting question that doesn’t have a clear cut right answer, but is telling to investors. If you say you met at a hackathon 3 months ago, what you are saying is that you don’t really know each other well. Investors may think that the connection between you and your co-founders isn’t solid. If you are saying that you’ve been friends since high school, investors know that you trust each other.

However, they also know that you haven’t worked together. Friends don’t always make the best business partners, and startups have ruined thousands of friendships.

Most likely, investors are looking to hear that you worked together before, ideally in another startup and ideally for a while. This would imply that you get along socially, but more importantly, you can make things together under a stressful environment.

17. Who are your competitors and how are you different?

We’ve written here before how to think about competition. Investors are looking to understand how knowledgeable you are about competitors and what is different about you. If you say you don’t have competition or if you bad mouth them, it is a red flag. Simply acknowledge competitors, and highlight what they are doing well. Explain how you are different and why.

18. What is your vision, your true north?

Some founders stumble on this question and this is a red flag for investors, particularly for VCs who want to back founders with big vision. What do you want your company to be in 10 years? This question reveals not only how you think about the business long term, but whether you plan for it to exist a decade or more. If your plan is to sell quick, you won’t have a broad long tem vision.

Similarly, a question about your true north is an important one. It reveals what you aren’t willing to compromise on. Great companies are always flexible on their path, but not flexible on the destination.

19. What milestones will you achieve with this financing?

We touched on this topic in our How Much Capital Should You Raise post. This topic is complex and founders often approach it with a naiveté. A typical answer might be expressed in terms of specific product milestones and scaling of the team. This is not what investors are looking for. They want to understand tangible business milestones you will reach with the capital you are given.

There are really two outcomes investors are looking for – either profitability, which is very rare in early stage startups, or the follow on financing. That is, investors are asking if you get funding and then execute and hit specific milestones, will you be fundable again? For example, if your plan says you raise $1MM, and then grow 20 percent MoM to achieve $40MRR in 12 months, to you this may sound great, but to investors it is clear that it will not be enough to raise a series A.

It makes sense to really think through your milestones and where you want to land and why.

20. How much will you be burning per month?

This is a pretty straightforward question that follows from your financial model. A few things to pay attention too: a) Your HR costs should roughly be 70K-100K per head. b) Investors will look for clarity around advertising spend — in the early days, before strong product market fit you should not me spending a lot of money to acquire customers and c) Investors will look for any outliers, anything that jumps out as out of ordinary or unusual.

21. What will be your MoM growth in customers and revenue?

Another straightforward question based on your financial model. As a startup, you need to make a growth assumption. The trick is that you don’t have a ton of historical data to back it up. Whatever data you do have, include it in the model and explain it, because it helps establish credibility.

Also, avoid cookie-cutter 20 percent MoM year round growth assumption, as it may come across as sloppy. Really think through seasonality and other factors that may influence your growth. Do your customers pay you right away or not? Does your cash in the door trail booked revenue? Reflect all the nuances in the model and your revenue forecast.

22. When will you be profitable?

Historically, many of the best startups have reinvested their revenues into the business and sacrificed profitability in favor of growth. Since the financing market has become tighter, profitability is fashionable again. Becoming profitable is important for many reasons, but the main one is that it allows you to become self sufficient and control your destiny.

When you are profitable, you are no longer in need of external capital in order to survive. Investors are looking to understand how you think about profitability, and tie this to the conversation about your burn and the need for follow on financing.

23. Why is your business defensible?

VCs want to know what happens to your business over time. Assuming you can get a lift off, investors want to know what happens year 5, year 10, etc. Why? Because this is a typical horizon over which more successful startups go public or get acquired for a significant return. Long-term defensibility is difficult to predict. That’s why many investors look for natural monopolies, winner take all markets and businesses with network effects.

This is a complex and important topic that is less likely to be top of mind for the founders, but is certainly something investors are paying a lot of attention to.

24. What is your intellectual property?

If you are startup that is creating a new technology, investors want to know about your IP. Are there things here that can be patented? What is the true innovation in your business? While software patents haven’t been effective in recent years, depending on the type of your business and depending on what kind of investors you are talking to, IP can be an important topic.

25. What is your tech stack?

This question will be particularly relevant for startups that are working in AI, VR, dev tools and other areas that require deep tech. Some investors, particularly technical ones, will want to nerd out with you on your stack.

26. What are the key risks in your business?

This is one of the hardest questions investors will ask you – why might you fail? This question is a probe for a) how do you think about risks in your business b) do you acknowledge risks and c) most importantly, are you self-aware and intellectually honest. Great founders bring up and face risks head on. They don’t try to shove them under the rug and ignore them.

Risks vastly range from building incorrect products, to the market not being there and to key distribution deals falling apart. Whatever it is, be prepared to talk about risks and show that you’ve been deeply thinking about them.

27. Who is the natural acquirer for your business?

Investors aren’t likely to ask you this question, but they will certainly think about it. Investors are putting money into your business to make more money, and historically, since the IPO market is tight, most successful companies are acquired.

Although you have no plan to sell your company, it is good to think about who might bite in the future and why.

28. How much capital did you raise so far and on what terms?

This is a simple question – just tell investors exactly how much you raised, whether you did it on the note or via equity. Don’t stumble or hesitate, because that would be a red flag.

29. Who are your existing investors?

This is another straightforward question.

30. How much capital are you raising and what are the terms?

You should have clarity on how much you are raising based on the financial model. Depending on where you are in the fundraising process, you may not have the terms set yet. If you don’t have the terms set, then just say so – investors will completely understand.

 

And now please tell us what we missed. Share the questions that investors asked you during your fundraising conversations.








Supercharge your Business: The Power of the Techstars Network

In April 2017 Halion Displays graduated from Techstars NYC. The experience was incredibly valuable on its own, and as founders we grew a lot personally and professionally. We knew from other founders that the real value of accelerator programs is in the network, but post-program the Techstars network continues to astound us. From investor and customer intros to business and operations advice, the Techstars family is always happy to help — often in ways you’d never expect.

Our company was recently invited to join a soft landing program in Hong Kong. The focus was to learn how to enter the Chinese market and leverage resources in both Shenzhen and Hong Kong as we grow. Before the trip began we reached out to our network and scheduled business meetings with various potential customers and business partners. We also reached out to the Techstars network to see if anyone was in Hong Kong and wanted to meet. Within a few days we had multiple people reply offering connections and to meet up while we were there!

We ended up meeting Alex Solana (Tinitell, Amazon Alexa Techstars ‘17). Alex graciously offered us a meeting room in his co-working space for the morning, and then we grabbed lunch and had a great discussion about managing supply chain in Shenzhen. Alex has been in Hong Kong for over 3 years now and has become very familiar with the OEMs and ODMs in China.

We found a place to grab lunch and over some delicious dimsum Alex shared his wealth of knowledge around business culture, how to manage supply chain, reputations of OEMs and ODMs (including who we should work with and why), strategies for tapping the Chinese and Hong Kong markets and resources, etc. The short time we spent with Alex was easily one of the most valuable parts of our trip.

Alex Iskold (MD @ Techstars NYC) ingrained in us the importance of always working backwards from your goal. Our meeting with Alex Solana was able to help us refine and better understand key milestones in our business. What were once black boxes of “this is roughly what needs to be done” suddenly became clear goals, milestones and action plans. And when we asked Alex S. how he learned all of it, his answer was: Trial and error.

Companies (especially startups) who want to take advantage of resources in China and Hong Kong traditionally have to just go there and see what happens. Thanks to Alex Solana and others we met on the trip, we are now much more prepared for how and when we’ll setup work in China, and for that we are extremely grateful. It is moments like these that we are especially appreciative of being part of the Techstars family 🙂

This was originally published on Medium








10 Reasons to Join (or NOT Join) an Accelerator

In a Techstars AMA, we were asked at what stage a startup would most benefit from an accelerator. Here is one perspective from Alex Iskold, MD of the Techstars NYC Accelerator.

Accelerators are an integral part of the startup ecosystem. For some, especially first time founders, it’s becoming a checkbox — you have to go through an accelerator. Serial entrepreneurs, as a rule, would say they don’t need to, because they already know what to do.

Some people say that accelerators are only good for the companies that didn’t yet raise financing. They argue that if the company has raised capital, then it’s too far along for an accelerator and wouldn’t benefit from it.

My take is different — none of the above is universally true. We have plenty of successes at Techstars with companies who raised funding, and plenty of serial entrepreneurs who have gone through the program. Increasingly, we see later stage companies that already achieved product market fit really accelerate by going through Techstars.

Here is a break down of why you would join an accelerator (factoring in that I am a managing director at Techstars):

1. You are looking for mentorship & feedback

Quality mentorship is a secret sauce behind a great accelerator. Matching you with a network of top entrepreneurs, executives and investors who share their experience, provide feedback, and guidance can really accelerate your business.

Most often, the focus is the business itself — Is this the right product for the market? How to achieve growth? What is the revenue model? Is this a big business? Is this business venture fundable?

You need to want to be mentored and seek the feedback. If you don’t think other people can add value or give you good feedback, then accelerators are probably not a fit for you.

2. You believe that your idea is an actual business

You believe you have a good idea, and potentially a great business and you want to accelerate the discovery of whether this is true or not. You will do that via a ton of testing, getting customer feedback, talking to mentors and accelerator staff, and most importantly by setting goals and aggressively measuring progress.

You will do all of this with the goal to find product market fit, and then step on the gas to get growth and prepare the business for financing. That is, you compress what normally happens over much longer periods of time down to days and weeks. You essentially force yourself and your company through the process and that is an awesome way to do it.

3. You are looking for business acceleration

If you already have traction and early product market fit, you may benefit from business acceleration. Techstars in particular, is known for its big, worldwide network that can connect your business with potential customers in a matter of hours.

By leveraging the network, you are short-cutting the lengthy business development process and rapidly accelerating your business. If your product is great, you can turn introductions into customers and quickly grow your revenue in a matter of weeks and months, while normally it would take months and years.

4. You are preparing for financing

Whether you are first-time founder or a veteran, raising money is never easy. A good accelerator would prepare you for financing, not just by introducing you to investors — thats the easy part, but by actually working with you to help ensure that you have interesting, healthy and defensible business.

You will work through the questions the investors would ask – What is the value here? Who are the customers? What is your traction and growth like? What’s competition like? What is the market opportunity? What are the costs and revenue projections? What’s the hiring plan? What does this business look like at scale? All of these and many more questions get worked through to prepare you for funding.

5. You clicked with the managing director & accelerator crew

Accelerators are people too! Do you like the managing director and accelerator staff? If not, how are you going to spend 3+ months together?

Every VC would tell you how important the match is between the CEO and VC. This is because they get to work together in the boardroom for years. Now let’s do the math. If you do a board meeting every six weeks for five years, that’s 43 days of half-day meetings. Assume you spend another 43 days together over five years (that’s a big over-estimate, but that’s fine). That’s 86 not even full days — still less than the time you would spend with the managing director and staff at an accelerator.

Make sure you know and like the people you will work with.

6. You are clear on the value

Just as not all universities, high schools and kindergartens are the same, no two accelerators are alike. Not saying good or bad, just saying different. How different? Well that’s the whole point — do your homework and find out.

The last thing you want is to go in thinking you are going to get something and then come out without it. Be direct and specific — whatever you are looking for, ask during the interview process, would I get X out of your accelerator?

Remember any interview is a two way street. And if the accelerator is not willing to answer your questions during the interview process — well, it’s probably not a great accelerator for you.

7. You understand the offer terms

The transactional part of going through an accelerator is really important too. What are the terms? What do you get, and what do you give up? How much money are you getting? Is it equity or debt? What percentage of your company are you giving up? Is it common stock or preferred? What rights will preferred stock have?

If the accelerator does not take any equity, it’s fine, but it does create a looser relationship. On the other hand, some accelerators ask for too much equity, and it is then harder to further finance the business. Some accelerators have aggressive preferred stock asks, including senior class of stock and control terms. That’s not really market, but you might decide that you are okay with that. The key point is — understand what you are getting and what you are giving up.

8. You enjoy intense environments and competition

Accelerator environments are typically really intense. At least at Techstars, the companies really Do More Faster, and it is amazing how much they accomplish in a short period of time. If the accelerator is laid back, then it’s not likely to accelerate you. Figure this out before you join. You want a super intense, fast-paced environment that will leapfrog your company.

You have to want to go through this experience with other startups. You learn a ton from each other and you also naturally compete. Whose made the biggest progress this week? Who landed the biggest client? Who has the most users? Who has the best pitch? It is a great natural competitive environment, but it is also the place to get friends and business partners for life. Nothing else bonds founders like going through an accelerator together.

9. Alumni say it is AWESOME

Do your homework. Talk to the alumni. Did they enjoy the experience? If all of them say yes, ask what they got out of it? Why did they think it was valuable for their businesses?

If most alumni said it wasn’t a great experience, well, maybe you can then save yourself time, and find a better accelerator.

10. Some of the reasons not to join an Accelerator

You are looking for immediate funding. Better accelerators give you around $100K, and while not a meaningless amount of money by any means, should not be the sole reason for going to accelerator. It is like taking a job you don’t love just to get paid – it’s fine to do it, but not likely to make you happy.

You are looking to get into any accelerator. It is a bad idea for all the reasons we talked about above. Any accelerator won’t help you accelerate the business. Be deliberate, know why, do not settle.

You are looking for co-founders. Not really the place for this. It is very likely that you would be wasting the opportunity unless you have the right team already in place. Of course things happen, teams fall apart, and then you deal with it, but it’s different from deliberately going to an accelerator to just find a co-founder.

You are looking for free space and free beer. Again, not a great idea (although I hear you on the free beer). You won’t be maximizing the value of the program without having a specific set of goals and objectives.

Hope this helps. If you have specific questions about your company and whether you would benefit from an accelerator, feel free to leave a comment or email me at alex dot iskold at techstars dot com.

Interested in joining the Techstars worldwide network? Applications are open for 10 of our global programs – apply today

This post was originally posted on Alex’s blog








Demo Day: Techstars New York City (New York City)








What To Do When Your Fundraising Is Not Going Well

One of the worst things that can happen to a CEO of an early-stage company is to be in the state of perpetual fundraising.

Here is how you can tell that it may be happening to you:

  1. You have been fundraising for a while
  2. You are fundraising and running the business at the same time
  3. You don’t have strong interest from investors
  4. Investors aren’t engaged / don’t ask a ton of questions
  5. Investors keep telling you it’s early / to keep them posted

The list can go on, but you get the point.

You are wasting your time because you aren’t prepared and the timing is likely off.

Please go and read my popular post about 9 seed funding gotchas and I will be right here when you come back.

Disorganized, prolonged fundraising is exhausting and harmful for your company and your personal brand.

So what can you do?

Here are some things for you to consider to help the situation.

Do the Gut Check

Be honest—are you really READY to fundraise?

Have you prepared enough, or are you going out too early? When you go to bed at night and think about it, like really think about it, are you really ready?

The best way to fundraise is not to go out early, but to first prepare and answer a whole bunch of key questions about the business and the opportunity.

Think about questions like: why are you the right team, why are you going after this opportunity, why now, how do you know this is needed, what are the early indications of product-market fit, what is the business model, what are the unit economics, how are you going to acquire the customers, what is the pricing, what will this business be like in three years from now, who are the right investors, why would they invest, how do you get in front of them, what will be important to them—etc, etc, etc.

The nerdier you get about fundraising, and the more prepared and disciplined you are, the higher the chance you will be able to get it done faster.

If you aren’t ready, pause, go back, prepare, read my posts on fundraising and particularly on building a deck and pipeline, and then go back to the market.

Build Investor Pipeline

Assuming you passed the gut check, and you really feel like you are ready, next assess whether you are able to get in front of enough qualified investors.

Like sales, fundraising is a numbers game. If you don’t have a strong enough pipeline, you can’t get to the finish line.

Every single NO should cause you to add 3-5 more prospects to the top of the funnel.

If you are early on in the process, particularly a first-time founder without a strong network, you will find that fundraising is taking a long time because you aren’t even getting that many meetings.

Your fundraising process is stretched over weeks and months, but you aren’t seeing a lot of investors. As a result, you obsess over every single opportunity, like a few conversations you are having instead of focusing on having a lot more conversations.

What you need to do is to pause and focus on filling up your pipeline with 20-30 new investors. Just keep filling the pipeline, but do not take the meetings. After you have the pipeline filled up, THEN go and pitch everyone. This strategy will help you get a real signal and have a chance at creating momentum in your round.

Understand Investor Feedback

Assuming you have enough in your pipeline and you are meeting a bunch of investors in a short period of time, you really need to understand their feedback. What is the reason that people are saying NO? Do you not have enough traction? Is the space not interesting? Is the opportunity too small? Is it something else?

Whatever it is, your job as a founder is to avoid happy ears, parse the feedback you are given and really take it to heart.

If you are early and don’t have enough traction, then you need to understand the milestones people expect and go build the business until you hit them.

Investors may tell you that they don’t believe in the market size, or in unit economics or in your customer acquisition strategy—whatever feedback they give you, whatever the signal is, go back and address it. Understand the pushback, do research, get data, execute and come back with a fix.

Also, know that there are more subtle things that people won’t necessarily tell you about. For example, investors may not believe in the founding team and don’t see strong founder-market fit. Investors may not like the space. They may have issues with well-funded competition. If the issue is more subtle, try to really figure out what it is.

The bottom line is whatever the feedback is, no matter how tough it is, go back and address it.

Pre-seed Fundraising Strategy

Now let’s look at specific strategies for types of financing.

Your pre-seed round is truly an idea stage. You don’t have a product and you may not have your team fully assembled. You are super, super, super early. Read this other post I wrote first.

If you are a first-time founder, focus first on your friends and family, people who really know you and already think you are great. Get at least a little bit of their capital, and maybe even your personal capital so that you aren’t at zero. Being at zero is the worst state.

Don’t spend any time with VCs at this stage; you are WAY TOO EARLY.

You can raise capital from angels, but the key things are to a) get a little first from friends and family, b) target the investors correctly, and c) figure out milestones.

To build a correct list of potential investors, talk to other founders and ask them who the pre-seed stage firms and individuals were that funded them. Research, research and research some more to build the right list, otherwise you will be massively wasting your time.

Only specific funds and individual angels invest so early, so your job is to find investors whose strategy it is to fund the companies at your stage.

Next, think through all the tough questions you will be asked. Do the gut check—do you know the market, the customers, competitors, etc.? The more fluent you are in the problem and the business, the higher the chance you will get the check.

Lastly, clearly define milestones you are going to hit with the pre-seed round.

A typical milestone at this stage would be shipping the product. A better one would be shipping the product and getting a few early customers. No investor wants to give you a check to support your burn.

Investors want to fund you to the NEXT MILESTONE.

In the case of pre-seed, the key question an investor needs to answer is what milestones will enable you to raise a seed round. That’s really the meat of getting the pre-seed check—articulating milestones and metrics that will get you to the next round.

Seed Fundraising Strategy

Everything that we said for the pre-seed applies to the seed round as well.

Keep in mind that the bar is now higher in the seed round. You can’t be pre-product; you need to know your customers and you will likely be expected to have early traction. The game overall is upped significantly compared to pre-seed.

In addition, since the amount of capital you are raising is larger, you need to spend more time on identifying more relevant investors and getting introductions to them.

In terms of targeting investors, start with angels and micro VCs and try to get a few hundred thousand committed. Don’t spend a ton of time early on talking to venture firms, as they take longer and most of them would still think you are early.

By getting several hundred thousand committed on the round, you will be able to create momentum and will have better chance of getting larger checks.

Start with small checks—get to 1/4 or 1/3 of the round then shift focus to larger checks.

Also, how much capital are you asking for? 1.5MM – 2MM may be too high. Review your financial model. Can you make things happen with 1MM? If so, revise your model to be more capital efficient.

It is always better to start lower and then, based on the demand, over-subscribe vs. starting high and never getting there.

Series A Fundraising Strategy

It’s really tough to raise Series A if you don’t have strong metrics. Some founders raise on a story, but they are either repeat founders or working in the hyped-up spaces. Most founders will need really strong metrics.

There are exceptions, but if you are already generating revenue, you will be judged by your a) MRR/ARR and b) MoM Growth. However, strong metrics alone won’t get you a check. Not in this market, anyway.

The dance to raise Series A involves identifying the right firms and identifying the right partners, then getting to know them and letting them get to know you. It will also involve a lot of guts and luck.

Clearly assess how much appetite there is in the market. You should have a gut feel.

If the demand is not there, cut the burn (you should do it anyway), and go back to building the business.

Focus on getting to profitability.

Get feedback from the investors on what your metrics need to look like and keep them posted every eight weeks or so. Assuming you are growing well and hitting profitability, the investors will likely be open to another conversation.

In conclusion, fundraising is stressful, complex and needs to be done thoughtfully or else it is extra painful and takes way too long.

A lot of founders get fundraising wrong.

Do not fundraise randomly and perpetually. By doing so, you are literally harming your company and your personal brand.

As the CEO/founder, have the strength to listen to feedback, understand that you are not ready, pause, regroup, improve and go back to the market.

And lastly, get help! Read up, connect with other founders and get 2-3 key advisors on board. You don’t have to do this by yourself.

 

Techstars helps entrepreneurs succeed. Interested in joining the worldwide entrepreneur network? Learn how.

Originally posted on Alex’s blog.








8 Tips for Dealing with Competitors

Competition is a strange topic. It is both underrated and overrated. This may seem like a contradiction, but it really isn’t.

Startups often don’t spend enough time understanding the market and spend too much time worrying about competition once they launch.

In this post, we look at different aspects of competition and how a startup can deal with its competitors.

Do the Market Research Before You Launch

Before you launch your startup, you need to study the market. Startups are about the opportunities, and to identify an opportunity, the founding team needs to do market research.

The worst way to start the company is to start without understanding the market.

Just identifying the need and talking to customers is not enough. Part of the initial research is also understanding the competition. Who else is working on this problem? Are they small startups or big companies? How long have they been at it? How are they doing? Are they succeeding? If not, why not?

Understanding the competition is critical, because the opportunity may actually not exist.

Sure, customers may want the product, but competitors may already have a good enough offering. Founders rarely spend enough time doing market research and really understanding existing competitors, yet it is a critical part of launching a successful company.

Beware of ‘No Competitors’

There are a handful of red flags that turn off investors. One of them is when the CEO of a startup says, “We have no competitors. No one else has thought about this, we are the first ones!”

No matter how you look at it, saying you have no competitors is not a good thing.

First of all, by definition, all good ideas are competitive, and all real markets have competition. Lack of competition may imply lack of opportunity. Either there is no customer need, or the opportunity is small and not compelling.

More often than not, investors know the market better than founders and can name competitors better than the founders. This is also a bad situation, because it means that the founders either didn’t do their homework or did it poorly.

Either way, when a CEO says his or her company has no competitors, this creates immediate concerns and trust issues for potential investors.

Know Your Past and Future Competitors

When investors think about opportunities, they don’t just think of them in the present moment. The founders are expected to know about competitors who failed in the past and about potential future competitors as well.

For example, people have worked on Artificial Intelligence and Virtual Reality before and those efforts didn’t quite succeed.

Many startups are working in these spaces again and say that this time things will be different. While that may very much be true, the investors want to know what exactly is different now, what conditions didn’t exist before, and why this time is going to be different.

Similarly, it is important to think about who else may enter the market. This is a much more difficult dynamic to predict because by definition, predictions are difficult.

Investors often ask the founders what would happen if Google or another large company went after their market. While not possible to predict, it is good to think about this question and be ready to answer when asked.

Figure out Your Competitive Differentiation

Market research and studying your current, past and future competitors eventually boils down to one thing—what is your differentiation?

What is your unique insight? Why and how are you different? Why does this difference matter enough for you to win?

This is why having Founder-Market Fit is particularly important. Founders who have experience in their specific market typically have unique insights and are able to come up with offerings that are differentiated.

A good differentiation is typically product, go-to-market or sales advantage. Product advantage is created when your product is substantially different in how it works from competitors’ products.

Go-to-market advantage is based on channels that you are able to secure that no competitors can lock in. Sales advantage is typically based on your experience and deep understanding of the customers.

Keep Track of Your Competition, but Ignore the Noise

Most founders spend too much time worrying about competition on a daily basis. News is extremely noisy—someone launches something every day. If you follow every single bit of news from every one of your competitors, your life is likely a major emotional roller coaster.

In the end of the day, it is not what your competitors do, but rather what you do that matters more. You don’t have control over product releases, sales and PR of your competitors—all you can control is your own business.

Focusing on creating the best possible product that your customers love is your best defense against competition.

Instead of reading daily news about competition, set up a quarterly, or at most monthly, review of both competitors’ news and more importantly, products. This way you can keep track of what’s happening without the stress involved in following your competitors daily.

Accept and Play “The Idea Exchange” Game

When I was running my startups, I remember that feeling I would get when a competitor launched something that we had previously launched. A competitor stole our idea! Even worse, they executed it better, and no one gave us credit for being first.

Founders often complain about this situation. The reality is that this is now an accepted reality. Today, companies readily copy products and iterate on each others’ ideas. There is no protection for ideas; they are basically free to take.

Founders should just stop complaining and assume that their ideas will be copied.

The product and the business needs to be able to survive in the environment where pieces of UX and user flows are being copied.

In exchange, you as a founder benefit from taking ideas from your competitors’ products. Much like they copy your ideas, you can copy their ideas.

Build Relationship with Your Competitors

While sharing secrets with competitors is a bad idea, being friendly in general makes sense. Competitors are typically the most knowledgeable folks about the space besides you, and it is interesting to talk to them and get their perspective, again, without revealing too much.

Founders tend to run into their competitors at conferences and events, and naturally have the opportunity to connect. By building the relationship with your competitors you are both helping co-create the space, and getting to know your competitors as people.

You never know what the future holds. It may make sense for you to join forces or create a partnership. Markets with big opportunities tend to consolidate, so investing in a relationship with your competitors is likely a net positive for you.

Win with Your Heart and Mind

Once you are in the market, you compete on the product and your unique approach to the problem. No one but you knows exactly what you think and what you are building.

You win because of your unique approach, not because your competitors did or didn’t do something, copied or didn’t copy you.

Ultimately, competition does not matter nearly as much as your vision and your resilience.

You win by imagining the future and taking your customers, your company and the world there. You win with the product that is unique to you, with the business execution that is yours.

No competitor can take it away from you because they don’t see the world the same way. Your competitors aren’t you.

The best founding teams have their eyes set on the vision, their true north, and go there, regardless of what the competition does or doesn’t do.

The best founding teams win with their hearts and minds.








How to Generate Ten Demos Per Week with Sales Outreach

A few months ago, at Gorgias (NYC ’15), we decided it was time to open up our beta program to more companies. Therefore, we started looking for companies that we thought could be a good fit for our product. Here’s the method and the tools we used to generate ten demos per week.

For context, our product is a helpdesk, which enables companies to handle all their customer service in one screen.

Our outreach process was composed of three steps:

  • Get a list of targeted companies
  • Try to get a warm intro to this company
  • If you can’t a warm intro, send a cold email to the right person at the company

Step 1: Generate a List of Targeted Companies

A good place to start is to look for companies that are similar to your current customers. For instance, some of our customers are box businesses. It turns out there are several websites that list all box businesses (like Cratejoy). We used Kimono to scrape these lists and generate a csv with the details of each company. Kimono helps you generate a csv out of those 162 companies in seconds.

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We also looked for companies using competitive products. In our case, we looked for companies using Zendesk.

There are a ton of tools out there to help you with that, our favorite tools are Clearbit Discovery (very rich data) and Buitwith (pretty cheap: $300/m for about 4000 companies). Clearbit provides you with 58 data points per company. 

Once you get the list, it’s time to exclude all the companies that won’t be a good fit. You don’t want to spend time in later steps with people who’ll never use your product.

To identify companies that have repetitive customer service, we used the number of Twitter followers, and checked that companies had a Pinterest & Instagram account, as our current customers do.

Step 2: Try to Get a Warm Intro

The most efficient way to connect with a company was to get a warm introduction to one of their employees.

We started doing this manually: for each company, we checked the list of employees on LinkedIn to see if an employee was 2nd degree to us. Then, we sent a forwardable email to our common connection:

Hey Alex,

I’d like to get in touch with {company} and I’ve seen you know {employee}. Given they get repetitive support requests, I thought it would be interesting to connect with them. Could you please pass them this note?

Romain

— — —

Hi {employee},

{your pitch to the employee here}

— — —

In 60% of the cases, the employee would opt-in for the intro.

It turns out it’s easy to automate this process using Selenium scripts on LinkedIn. Given a list of companies, the script returns a list of employees who are 2nd degree to you that you can contact.

The script’s output: second degree connections who work at the target company, plus your common connection with them.

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Then, all you need to do is select the employee you want to contact, and then ask your common connection to introduce you 🙂

We’ve shared the script on Github if you’d like to try this technique. Thanks Brice Maurin for helping here 😉

Step 3: Alternatively, Send a Cold Email to the Right Person

If you don’t have a common connection with the company, your best option is now cold emailing.

Targeting is your best ally here. First, identify the role of your ideal target. In our case, this was the Customer Support Manager or the CEO.

Then, we used the Clearbit Sheets (an add-on on Google Sheets) to find who this person was for each company. The cool thing is that it also gives you their email address. Clearbit helps you find the right point of contact along with their email. 

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Now, you can set up an email campaign to get the attention of this person.


The conversion rates here can vary a lot depending on your audience/product. In our case, we had 10 demos for every 750 target companies, which was our weekly objective. For each company, we tried to get warm intro, which would lead to 3 demos, and then go with cold emailing to get another 7 demos.

If you’ve tried a similar process, please share your experience. And yes, if you’re tired of your current helpdesk, we’d love to give you early access to Gorgias.

At Techstars, we believe in full transparency. Check out this complete list of all of the companies that we’ve ever funded.

 

This post was originally published on Medium








Demo Day Round Up: Fall 2016

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

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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!

Congratulations to the Berlin Class of 2016!

 

Techstars Mobility, driven by Detroit Class of 2016

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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.

Congratulations to the Mobility Class of 2016!

 

Barclays Accelerator, Powered by Techstars in New York Class of 2016

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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.

Congratulations to the Barclays New York Class of 2016!

 

London Class of 2016

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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.

Congratulations to the London Class of 2016!

 

Techstars Retail, in partnership with Target Class of 2016

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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!

Congratulations to the inaugural Techstars Retail Class of 2016!

 

New York City Class of 2016

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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.

Congratulations to the New York City Class of 2016!

 

Chicago Class of 2016

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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!

Congratulations to the Chicago Class of 2016!

 

Get a head start on your own entrepreneurial journey. Apply to an accelerator program. Applications close on October 15th.