Pros and Cons of the first 500 Startups and Sberbank batch for Yorso
I will start from the end, the demo day of the joint accelerator was an incredibly beautiful, powerful, striking and I dare say “delicious” final. Yes, we were prepared. That’s true, we rehearsed. And of course, we were nervous.
I will tell about the pros and cons of the accelerator and about those who I recommend applying next time based on Yorso — fish and seafood online wholesale platform — experience.
What I Liked the Most
It would seem strange but I am about people all the time.
To be brief they are brilliant. I would compare it with a ten-week sprint with mini-MBA, where grownups usually go not to get new knowledge but to network. That is what the YC alumni private club is proud of, and I hope we establish the tradition in Russia and the US fellows. It is not a secret that we are defined by our network, we grow and come to stop together. Even if today we are working on different projects, then tomorrow (after exit or failure of a startup and according to the statistics 9 of 10 startups fail) we can possibly be in one team, united by new ideas and goals. I just want to say thank you all one more time.
I repeat myself, but they are too my heroes. The superbly organized venue. The perfectly organized demo day. The excellently organized support of participants and guests. If to take in account that the program itself was launched in tight terms, and how the simple KPI “To make the best accelerator” was being reached, they are the stars worth the special bow.
I cannot still understand why no one before Sberbank did not think of and couldn’t launch a similar program in Russia. It was obvious although it is not a cheap investment here and now.
Except for the idea implementation which gave us, the projects, the access to the program and networking, Sberbank itself significantly grew in the eyes of entrepreneurs.
We had a chance to get to know people better, to get a better understanding of the company ideas and approaches, not speaking about the meeting with German Gref. Most of us tell friends about his open mind and strategic thinking from now on.
I will just specify some of the distinctive features that we do not have enough here in Russia.
- The “failure” experience. It is one thing when the lecturer is a theorist. A whole lot different when there is a person in front of you who has under his belt several failed startups and one developed and sold “unicorn”. It is a unique possibility not only get a general answer but to get an exact example from personal experience. There are next to none entrepreneurs that grew themselves from zero to billionaires and further less those who are ready to share their knowledge.
- The skill to give feedback. Instead of a desire to show yourself as the smartest one and the person you criticize as a fool, these people give constructive but extremely polite feedback. We are not taught to do that. It was what we were strictly punished on MSIT SE CMU in Innopolis. It was what I lacked 15 years ago at LOR forum.
- The skill to ask questions. There were many cases that we discussed with the teams in doorway conversations when a simple but correctly formulated question turned the whole team focus and business module, and the following week they showed an increase in profit. How is it possible not to love that?
- The skill to motivate. I will write a separate article about that but it is common to criticize entrepreneurs in our country (for example, in the comments to this article there will be too many multiskilled experts that will teach me how to live), and not only mass media does that but what is more horrible other entrepreneurs who think that everything is wrong if it is not done by them. During 500 Startups those people inspired and energized us giving an understanding that being an entrepreneur is difficult and worth respect, as we are the ones who create innovations and workplaces.
- Networking and openness. We do not have the small talk tradition, but that is what gives an opportunity to communicate with lots of different people on conferences, and strange as it may seem it gives you the opportunity to find right contacts. We are still reserved. Even having been together for 10 weeks on the same venue there were a lot of people who communicated only with those who they met at first. Communicate. It is one of the key skills of an entrepreneur.
- Smiles. I will just quote Marvin Liao that literally burst on one of the common session: “Russians never laugh! Russians never laugh!”
A Bit about the Demo Day
Below there is a video of my presentation.
In general, it was emotionally intense. The picture is good. Powerful. The PR machine is great (that is a special thank you to Sberbank again: we could not think internally of such attention from the side of mass media and corporate partners, and just did what we were supposed to do).
As an extra bonus for two weeks now we have constant daily meetings with funds, that initiate these meetings themselves. Pitches. There is no secret — practice, practice and more practice.
To be frank, I share the opinion that demo days should be cancelled (as it was done by AngelPad). However, a beautiful picture is also important. It is a spectacular final with emotions and a bit of a show.
Many call us now “Tonies Robinsons” and infopreneurs but why should it be boring? We should give that to the Americans that they are skilled to pack and to sell. They learn to do it from school starting with the d2d cookies sales. We often think of public speaking as shameful, we encourage “not to stick out” approach, “to ask for money” is bad.
In the end, we get the cosmic technologies that are absolutely useless in daily life because the stomach churns only at a look of them but on the other hand, they are advanced and to the point.
Now I can surely say that it was the best and the most striking demo day in the history of Russian accelerators. Don’t you agree? Give better examples.
But there is the fly in the ointment. It is too formal and official. It was tempting to ask: “Can we learn to treat things less seriously at least on the SMB level?”.
Young entrepreneurs (including me) do not like bureaucracy and formality, we do not care who we speak to (to a president Trump, to an entrepreneur Bill Gates, or to a security guard Vladimir), and how much money you have at your account.
It is obvious that if it was not for the serious approach and Sberbank name as the corporation there would not have been all those important guests, and no potential partners or investors would not have come.
A culture does not change in one day but when we learn to distinguish an ambassador reception from the startup contest, it will be easier.
What Can Be Done Better
It was a 47-page pain that is still coming from different universe corners of the projects participated in the acceleration. From one side, the approach to be more flexible in an attempt to form Convertible Note in the Russian law is understandable (that is not possible to do simply and briefly nowadays as there is no such practice and the legislation is not ready).
But it could be simplified by offering at the entry clear fixed terms, that 500 Startups and YC do in the original. Certainly, it could scare someone but Sberbank is a powerful name moreover together with 500 Startups and there is always someone who wants to join the great.
I am sure that the application procedure will be easier and better for the next program because the participants left a lot of feedback about several points and the feedback will be used for the benefits of the projects. It is exciting to know that Sberbank can be flexible in this regard.
From the 10-week program, three were on the New Year holidays. As a result, the program became two times shorter than the original 14-week program. It is true that seven finalists have a continuation.
There were teams that did not attend the acceleration program almost at all but they were allowed to participate in demo day according to general rules. It is strange and creates a precedent for the rest. If you decide to participate then please participate.
If a team does not attend or track they should be expelled. I do not know how it works in the original 500 Startups program, but in the YC School, my fellow entrepreneurs were expelled for missing tracking for more than one week from the 10-week online program. EIR was also too kind when it was needed to be stricter.
They were often postponed. I have nothing more valuable than a deadline, that was also brought up by “blood and pain” during the Master’s Degree in Innopolis. You rage to be on time and then . . . it is postponed. And then it is postponed again. And one more time. Then you ask the question: “What was the purpose of the deadline?”. They were mostly postponed not because the terms were not real but because the startups themselves did not appreciate the deadlines. For this reason, the organizers met the needs. I do not know which balance is right but the game rules are the rules that to be followed: you cannot be “good and kind” in everything.
Lack of Soft Partners
Despite the whole Sberbank power, we could not get all the soft bonuses that YC and 500 Startups provide to the participants. This time we did not see anything from Microsoft, Yandex, or other soft partners.
It is nothing but for the next time, I hope they will add it (it is about hosting, CRM-systems, mailing systems and etc. — that is what startups need here and now but they do not often have money for).
Who Will Benefit From the Accelerator the Most and at Which Stage
- You have MVP, but you do not know how to sell it. The whole acceleration program is focused on marketing and sales. All days long we were told that Sales first. We often try to perfect our product but in fact even when you have an Excel file you can start the first sales.
- You have a regular profit but you do not know how to increase it. You will learn during the program about the sales scaling, profit increase by removing simple internal barriers via subscription price raising (how it happened with WindyApp, for example) and many other questions of product profitability.
- You want and you are ready for entering the US market. One of the key values is a network. On vc it is often and a lot written that it is useless to attract investments in the US, if you are not introduced or if you do not live there for a couple of years. I do not know what happens next but something tells me that our new acquaintances will not refuse us.
- You need big corporate partners in Russia. Sberbank took a lot of effort to organize the meetings with the key decision makers of the largest corporations. If your market is here, like for DocZilla, it is a great opportunity to get new partners and customers.
- Investments. Strange as it may seem, no one will give you in Russia 5 mln rubles of real cash (although I would also write about another acceleration program from PulsarVC, where the cheque was unusually high), that is not a small amount and it can save your project.
If you consider education as a formal thing and you are ready not to attend classes regularly, network, spend time with everyone on the venue, and your goal is just to participate to put Sberbank and 500 Startups labels to your website, pass by, focus on your own clients and business.
Yorso project becoming a top 7 finalist was a surprise for many including me. Are there teams that are worth winning in the USA more than we? Yes, there are. Does this mean that we did not deserve it? No, we were and are doing a good job, it cannot be taken from us.
We cannot forget that winning contests is just a process that does not have anything to do with the key business. Yes, it motivates. Yes, it increases brand and product awareness. But our current and future customers do not care about the ticket to San-Francisco, but about the results like increase in sales, entry to new markets or significant optimization of transactional costs while working on the complex offline conservative market.
Moreover, it is a chance for us to grow faster. We are already operationally breakeven, we do not need external investments and we refocus our strategy that previously included only the EU. Now we certainly will introduce and show our traction on the US market already in May 2019 during the acceleration continuation in San-Francisco. This means — to be continued….