We are excited to announce the 10 startups that will be joining us in Minneapolis for our 2017 Techstars Retail Accelerator in partnership with Target. We kick things off this week and are looking forward to three months of awesomeness, capped off by Demo Day on October 11. The focus of these startups ranges widely—from theft to warranties to personalization—and founders come from as near as Minneapolis and as far as Belgium.
While in Minneapolis, the startups will have access to a range of mentors who will provide feedback, answer questions and offer advice to foster the startups’ growth and development. More than 150 mentors have once again signed up to mentor this year’s group.
This will be our second class to run through the program and we’re planning to build upon the success of last year. Our 2016 Techstars Retail class’ collective fundraise was one of the largest by any Techstars class within the first year. It included mobile enterprise staffing and scheduling tool Branch that is now running a pilot in select distribution and call centers and 130 Target stores. It also featured Inspectorio, a platform for inspecting manufacturer quality assurance that raised a $3.7M seed funding round from Target and have begun operating globally with Target and other global retailers.
Techstars is the Worldwide Network that helps entrepreneurs succeed, and strong partners and mentors help make this happen. Target continues to be an incredible partner for our Techstars Retail program and we hope to build upon the amazing success of our class last year.
We love this city and know 2017 is going to be an amazing year for Techstars, Target and the Twin Cities Startup Community!
Here are the Techstars Retail Accelerator in partnership with Target startups:
Air Tailor provides expert alteration and repair services for consumers and retailers.
New York City
BYBE simplifies digital alcohol promotions for retailers by embedding digital alcohol rebates inside retail applications and websites.
Find Me A Shoe offers virtual fitting service for online and offline footwear retailers.
Kokko is a personalized cosmetic and beauty shopping experience based on color science.
Bay Area, CA
Local Crate is the first nationally, local food company by making it easy to cook meals inspired by popular local chefs with seasonal, local ingredients in the comfort of your home!
Twin Cities, MN
Savitude’s technology provides recommendations on clothes based on a shopper’s body shape.
Bay Area, CA
Shopturn is an on-demand return service for brick & mortar retailers, enabling consumers to return purchases directly from home.
New York City
Spotcrowd stops shoplifting by using the crowd & existing IP-cameras.
StoryXpress is a cloud based automated video creation platform for businesses to create content quickly and easily.
Upsie is a mobile app that’s disrupting the traditional warranty industry by reinventing and demystifying the warranty experience for customers.
Twin Cities, MN
Lizzy is the co-founder and Chief Creative Officer of Blueprint Registry. Lizzy started her entrepreneurial journey by founding In.Bounds in 2012, a non-profit crowd fundraising platform aimed at inner-city youth athletics. In.Bounds was acquired by Sports in School in 2014, where she is now an executive board member.
Prior to that, Lizzy founded Showman Design, LLC, a design consulting firm where she managed art direction, relationships, and new business for multinational corporations (Sikorsky, Lockheed Martin, Microsoft) and startups.
Lizzy graduated from the University of Washington where she received a B.A. in Visual Communication Design and holds a Master’s in Design from the School of Visual Arts. In 2014, Lizzy was named Print Magazine’s top 20 designers under 30.
What is your founder story?
Blueprint was born out of the frustration my co-founder Nevin and I experienced when we were buying and registering for home furnishings online. At the time, I was finishing my master’s degree in design and was also engaged to be married.
Nevin came to me with the idea of shopping online through visual blueprints as a way to discover new products. For me, registering had been a huge pain point. We had three different registries, with a random selection of items and no real sense of what we needed.
The idea was intriguing and relevant for what I was going through. After a few weeks of assessing the competition and market value, Nevin and I decided to partner and start Blueprint Registry in April 2013.
In your opinion, what is something retail tech founders should know about working with large retailers?
There are endless learning opportunities when working with large retailers; however, you should be prepared to be persistent, accept constructive criticism, and highlight opportunities while mitigating risk.
Who was your most recent hire and why?
We recently hired a content manager who is creating evergreen content so we can grow and expand our SEO presence. We have seen an impact, as our organic search is up 96% year-over-year.
What’s the biggest challenge to overcome in your industry right now?
Continuing to keep up with users demands and wants. What sets one company apart from the next are features, price, and UX/UI. We are challenged everyday to continue to improve every area of our site to keep up with these demands so we can ensure we are acquiring new users at an increased pace.
How does the decline in brick-and-mortar retail affect you?
This is a double-edged sword for our business, as we are all online. That said, a big driver of user acquisition is the fact they can register at brick-and-mortar stores and sync them on Blueprint.
We believe that the shift from brick-and-mortar stores to e-commerce is inevitable, but there will always be a need for in-person experience (window shopping, returns, social interaction, etc.). The biggest winners will be those companies that seamlessly combine the two.
What are some of the trends in the wedding/gifting industry that you see are working in your favor?
Gifting cash virtually is one of the fastest growing areas in the wedding and registry market. We see this seismic shift as a massive opportunity and are continuing to build products and improved UX/UI experiences to match this need.
The purpose of Techstars Worldwide Network is to help entrepreneurs succeed. Check out the impact of the Techstars’ network over the past 10 years.
How to guarantee you’ll be able to raise capital in smaller markets.
In the competitive world of fundraising, there’s a myth that it’s harder to raise money in smaller markets. Most founders think you have to be on the coasts to start your business. After several years of investing and fundraising in a small market, I don’t believe that’s true and here’s why…
This past summer, Techstars Retail completed its first program with Target in Minneapolis. The Twin Cities has admittedly not been known as a hotbed for venture capital — but that is quickly changing. After just a few months, our companies have already collectively raised almost $15M, with another $5M to $10M coming soon.
This wasn’t a fluke. We put forth a set of guidelines that our startups followed to gain traction for fundraising in smaller markets.
If you want to raise money in a smaller market, here’s how:
Get Local Support
No matter how small. Get to know every investor in your region. Find out who has invested in local companies, what founders are from your town, what startups have come from your market. If you want bigger investors, you first need to demonstrate that you have local support. It’s great signaling.
Go to the VC
If the closest investors are not next door, get on a plane and create reasons to go visit. Do your homework and ask for a referral first. Get on a plane, show up, and network. You can’t be passive – you have to be aggressive and go to where the VCs are. Then, when you get those meetings, shine the light on your city.
Join an Accelerator that is Not in Your Geography
Tap into funding sources that would otherwise be unreachable. Bring them to you. This gives you a “shiny-effect” for tapping into your local market once you return. Check out Techstars programs – we now have over 20 accelerators in over 16 cities across the globe (including smaller markets like Austin, Boulder, Kansas City, Atlanta, etc.).
Understand Where Your Company Fits
Understand where your company fits into the greater tech ecosystem. Who else is doing the same? How are you different? Where is your opportunity? Where is the engineering talent? What is the cost of living? Know your market better than anyone else. Then, get the data about why your company can and will thrive in your locale.
Create a Great Business with Great People
It’s sounds cliche but it simply cannot be overstated. Bad businesses or bad founders will have trouble fundraising. Get your act together and surround yourself with an awesome team. You have to be on top of your game in every way in order to convince others to believe in what you’re doing enough to invest in you.
Don’t let people tell you that you have to move to the coasts in order to build a successful startup. Techstars believes that great entrepreneurs are everywhere and we are building a global ecosystem to support you. Join us!
My 2017 has been off to a hot start. First off, we opened our applications for our 2017 Techstars Retail Accelerator in partnership with Target. Then I was able to attend, or more accurately survive, both CES and the NRF Big Show. After walking the floors of these events, talking with our corporate partners, and meetings with hundreds of startups, here are some trends I’m seeing for 2017 for retail technology for startups.
#1 – Serious Supply Chain Investment
Target recently announced it will be spending $2.5B on their supply chain in the coming years. Amazon spends $13B annually on R&D and Alibaba is plans to spend $16B on supply chain improvements. These numbers are massive and scream opportunity for supply chain focused startups.
#2 – Voice-enabled Purchasing Will Become Less Weird
Amazon Echo and Google Home were both breakout products in 2016. While at first this voice-based interface seemed weird, consumers quickly saw the benefits of a voice-based operating system. Today, these devices are mostly used to control your home or play music. The holy grail for retailers is turning these devices into commerce platforms. Startups who help existing retailers or e-commerce companies integrate with these emerging platforms could see a lot of opportunities to partner in 2017.
#3 – Integration of AI Into Everything Retail
Artificial Intelligence is the new Mobile for Retail. While most retailers have a “mobile strategy”, they now must contemplate their “A.I. strategy”. A.I. will quickly work its way into almost every facet of retail. I expect to see record levels of investment into A.I startups for retailers. This is both for backend of the retail machine or consumer facing products that help inform consumers to improve conversions.
#4 – Store as a Distribution Center
Brick & mortar stores are uniquely positioned to fulfill same-day orders online. However, this can be a supply chain/logistics/delivery nightmare and most retailers are not ready. This incredibly complex, highly technical problem is ripe for startups to solve.
#5 – Groceries Will Become the Next Hot Area for Membership + Delivery
Consumers buy only two percent of their groceries online. The grocery industry is $700B. Think about that for a second. How many times a week do you visit a grocery store and buy the same items? I bet it is many more times than you research and buy a flat-screen TV. My point is, this is a prime area for disruption. I suspect consumer adoption of online grocery purchasing and delivery will grow.
#6 – Retailer Startup Investment and Acquisitions Will Heat Up
Traditional retailers investment and acquisition activity lags behind other markets. Their are some notable exceptions (see Inspectorio and Jet.com), but I believe this will change in 2017 as more retailers look to the startup market for “outsourced R&D”.
Do you have any other retail startup trends you are tracking this year? Are you a startup looking to disrupt retail? Let’s chat!
Hit me up on Twitter (@rbroshar) or submit your application for Techstars Retail today.
This month at CES, we hosted a panel of industry players to discuss product-based startups oftentimes tumultuous path to market. The panel included:
- Jacqueline Ros, CEO Revolar
- John Vaskis, Head of Hardware, Technology and Design Sales Indiegogo
- Tim Paulus, VP of Sales Arrow
- Cory Hooyman, Innovation Lead Target
The conversation was very insightful for how a product-based company like Revolar was able to navigate all the steps to market represented by the other panelists. Some of the insights included:
Creating a Product is the Easy Part
Most product-based startups are product-obsessed…as they should be. However, many times this gets ahead of the the question, “Will anyone purchase this once I build it?” Then if someone is willing to purchase it, “Will I actually be able to manufacture it, finance it, and provide customer service for it?” Considering these questions earlier in the process ensures time and money are not wasted on product development.
Buyers Treat Their Positions Like Small Businesses
When approaching a buyer about your product, it’s best to remember that they treat their product line like a small business. You must make a business case for why they would take your product over the other hundreds of products the should consider. Be ready for this and provide proposals for win-win situations.
Treat Your Vendors Like Co-Founders
For most product startups, you’ll most likely rely heavily on component vendors for the bulk of your product. Someone else will manufacture, test, or even engineer your product for you. Treat these vendors like co-founders and choose them wisely. They can literally make or break your company.
You Will Always Need More Money
While this may be true with most startups, it is especially true for product-based startups. Lots of money must be spent with vendors, retailers, R&D, marketing, etc before you even launch a product and hope to see revenue. If you’re seeking venture capital to fund this, you’ll always need more than you think. Make sure you raise enough to provide the runway needed for success.
If you’d like to learn more about getting a product to market, please feel free to reach out to me.
Applications for our next Techstars Retail Accelerator in partnership with Target can be found here.
I’m excited to announce that we’ve opened applications for the 2017 class of Techstars Retail in partnership with Target. You can apply online here. Applications are open through April 9th and the program starts in July.
Recapping Last Year
In case you missed it, our first year of the Techstars Retail accelerator was a massive success. We had 11 startups from all over the world descend upon Minneapolis for the summer. They received mentorship throughout the program from Target’s senior leadership, successful retail-tech entrepreneurs, and investors from across the country.
Watch this video for a great overview of the program.
Our Demo Day was a blur but it was incredibly exciting to see almost 1,000 investors, mentors, Target team members, and supporters from all over the Twin Cities startup community show up and support our companies.
And wow — did they kill it! Here are some highlights of what was accomplished by our startups during the program:
- Inspectorio – Announced in just 11 months, Inspectorio has already completed 2,000 inspections for 21 clients in seven countries. They recently announced closing a $3.7M funding round led by Target.
- Nexosis – Announced the company saved more than $90,000 in one location in a pilot with Pepsi this past summer and they are integrating into the Shopify e-commerce platform. They recently announced closing a $5M Series A round
- Branch – Shared the results of their successful pilot program with Target stores and plans to move headquarters to Minneapolis. Branch is will soon announce the closing of their seed round.
- Revolar – Announced a partnership with the National Domestic Assault Hotline and university campuses to tackle campus assaults in 2017.
- Blueprint Registry – Announced multiple partnerships that is expected to increase the number of accounts on its site to over a million. They recently announced closing a $1M seed round.
- Spruce – Started the program as one company and ended as two. Spun out technology company, SpruceBot, from their retail location and are on a mission to exponentially improve the customer retail experience for millennials.
Since our program has wrapped up, our companies have already collectively raised almost $15M, with another $5M to $10M coming soon. Stay tuned, as many more partnerships and deals are in the works to be announced this year.
What to Expect in 2017
For 2017, we expect to once again find the top retail tech startups from around the world and welcome them to Minneapolis for the summer to our beautiful working space located, literally, within Target HQ.
Have a disruptive retail technology startup? We’d love to chat. We’ll be visiting New York City, Cincinnati, Toronto, Waterloo, Seattle, Portland, Miami, Austin, Washington DC, Boulder/Denver, San Francisco and Los Angeles to discuss our program. Simply send an email to email@example.com to coordinate.
All in all, it was an incredibly successful first program and we are already looking forward to the next! Apply today!
West Stringfellow is the VP of Internal Innovation and Operations at Target Corporation as well as Entrepreneur in Residence. He is a mentor for Techstars Retail, in partnership with Target. This is the second post in a series on corporate innovation, originally published on LinkedIn.
This past summer, Target launched its first-ever startup accelerator in partnership with Techstars. We chose to partner with Techstars because of their unbelievably high success rate in launching startups.
You can boil Techstars’ track record down to one thing: mentorship.
Techstars has mastered the art of mentoring. Without it, most startups – and many innovation efforts – fail.
Here’s what amazes me: the proven value of mentoring is right out in the open, yet the vast majority of innovation initiatives fail to leverage it. Mentoring is literally the secret sauce of every accelerator.
For example, Endeavor Insight studied thousands of startups and interviewed nearly 700 founders, and they validated the powerful role of mentoring. 33 percent of founders who were mentored by successful entrepreneurs went on to become top performers.
Why Mentorship Works
Following our successful retail accelerator program this summer, I took time to assess what worked and why.
- Entrepreneurs and Innovators were willing to accept help: The startup teams that participated in our program were ready to absorb knowledge from anyone who walked into the accelerator space. As a result, teams didn’t waste time struggling with problems, but instead sought out experts who could help guide their decisions.
- Experts were willing to offer help: We were fortunate to have a large number of mentors who were willing to educate, collaborate with, and provide general help to our startup teams. Collaboration was especially important because it provided opportunities for teams to pilot projects and thus refine their capabilities.
- Positive ways to say “no”: No one wants a lame mentor, so we encouraged mentors to be honest about when and how they could help. One outcome we saw repeatedly was a statement to the effective of “I don’t know, but I will help you find someone who does.”
Contrast #1 with the way many innovation efforts proceed. An “innovation team” goes off in a corner and tries to come up with something new. They are cut off from the larger organization and don’t have much interaction with the outside world. Unless their team is filled with experts, you can be guaranteed they DO waste time struggling with problems and they DON’T routinely seek out experts.
I feel so strongly about this that my advice is that you are crazy to launch an internal innovation effort – or a startup – without first understanding how you will gain access to mentors. Not just one or two, but multiple mentors with expertise in the numerous specialties you will need master to succeed.
In my next post, I’m going to examine reasons to be a mentor, and I want to give you a preview by suggesting that the only way to truly be an expert is to share your expertise with others. The very definition of expert means that you are someone others turn to for knowledge, wisdom, and guidance. Without helping others, you may be knowledgeable, but you are not an expert.
Said another way: true experts function as mentors.
West Stringfellow is the VP of Internal Innovation and Operations at Target Corporation as well as Entrepreneur in Residence. He is a mentor for Techstars Retail, in partnership with Target. This is the first post in a series on corporate innovation, originally published on LinkedIn.
As I described in my last post, we just wrapped up our first Target + Techstars retail accelerator. Today I want to share some lessons about building an accelerator that is attached to a company of scale such as Target.
Recruit Companies who have a Strategic Fit with Yours, but that also want to do Something Meaningful
We started with the hypothesis that we should be recruiting retail tech companies. We knew that Techstars has a spectacular ability to select the startups most likely to succeed, but we didn’t know which ones would excite Target’s team members… and thus foster the most productive collaborations.
Luckily, we selected a few companies that not only aligned strategically with our company, but that also are seeking to do the right thing for humanity.
For example, Revolar combines an app with a wearable safety device designed to help protect women from abuse and assault. Inspectorio helps to guide overseas factory inspectors throughout the supplier compliance verification process; their work focuses not only on quality but also on detecting socially damaging practices with regards to factory workers.
Our CEO, Brian Cornell, found both of these endeavors compelling and his passion helped to ignite engagement among so many of our Team Members and other mentors.
Create a Broad Mentor Pool
Top-down support from leadership is critical, yet some of the strongest mentors will be the on-the-ground specialists.
Startups are often in more need of fundamental tactics as in “here’s how you get little things done”. These are often simple business mechanisms that seem unremarkable to the people who understand them best. But when, say, an engineer is trying to figure out the best way to package a product and make it look pretty, such tips may be lifesavers.
Thus, bring in mentors with numerous perspectives and from many different levels across your company. Then maximize interactions between startups and team members. Do not try to force business partnerships; enable team members and startups to spend time together – in both informal and formal mentoring settings – and partnerships will emerge organically.
Remember this: if you build an emotional connection between the people, mentorship works much better.
Watch out for Cultural Differences
At Target, people might not get back to each other for a week after a meeting, as they explore possibilities and work out necessary details. But the startup mentality is far different, and after a day with no response, entrepreneurs start to wonder what went wrong. The better your ability to identify and understand such differences, the easier it will be to diffuse them.
Look for Winning Teams, Not just Ideas
Ideas will evolve and pivot throughout the program; teams are the reason a startup succeeds or fails. Focus on companies that are eager to learn. Startups that entered Target with the sole goal of learning – and weren’t just focused on selling – emerged with the strongest relationships and partnerships.
The Ability to Scale Matters
Let’s face it, entrepreneurs can talk big. “Sure, we can easily scale.” But it’s a sobering challenge to sell to – and serve – a large enterprise. When a founder tells a Target Team Member that they can handle scale, that Team Member is likely to respond with something like, “OK, let’s run a test today of your ability to handle 200,000 transactions per hour for two hours.”
There are good ideas, and then there are good ideas that scale. You want to find startups whose teams have the ability to scale.
Launching this accelerator had a huge benefit for Target: it taught us how to be better at mentoring, and we are now applying those lessons internally across our company. That alone makes this program a gigantic win.
Our next Target + Techstars accelerator will be next summer, and we’ll start taking applications in January. But, in the meantime, we built a website that allows startups to introduce themselves to Target.
P.S.: If you missed the Demo Day and are keen to catch the highlights, please do so here.