How an accelerator works, or what I learned working for the worlds first aquaculture accelerator
This article is written with startups, investors and other accelerators in mind to describe how the niche aquaculture accelerator Hatch was born, and what I learned by being a part of the process.
What a day. In front of 150 attendees and many more live-stream viewers, our eight startups in the Bergen Cohort 2018 have passed their final exam, the demo day pitches. The 90 days of the Hatch aquaculture accelerator is over for now, and the teams have left to go back to their home countries. It’s been very special to have such an international cohort with specialized aquaculture startups flying in to Bergen, Norway from all around the world. As an aquaculture entrepreneur, I feel very lucky to have been a part of the management team. The suggestion that Bergen has become the new Silicon Valley for aquaculture was becoming more true for every speaker entering the scene.
Let me tell you how it all started.
How it all started
In December last year I was running around at BTO, thinking about sensors, fish and functional programming as per usual. Midway through a hallway I bumped into Georg Baunach, a German aquaculture business analyst and Wayne Murphy, an Irish accelerator guru. They were visiting Bergen over a couple of days and were spending their time going to events and meeting what seemed like everybody. Over those days, we went to a couple of aquaculture events together. We also talked a lot about our common interests in aquaculture, innovation, fish and technology. Bergen has become a cluster consisting of most of the major salmon corporates, heavy aquaculture research, world class education and a new but booming startup community. The city was really shining though as a powerhouse of the aquaculture industry. But one puzzle piece was missing, one related to startups and investing.
It turned out that these guys from the company Hatch were holding that puzzle piece, and were looking for a good puzzle to fit it into. They were scouting for a location to start an aquaculture accelerator.
Me and many others were happy to hear that Hatch decided to move to Bergen late December 2017. To my surprise, they soon after reached out to me privately when I was on holiday in Sweden. They wanted someone local who could provide ground support as well as connect them faster to the ecosystem. After a couple of video-calls tried to persuade me to join Hatch as a program developer.
The day after I was back at the office and managed to have a video-call with Carsten. I had decided to join, and he said: “Cool! Can you fly to Amsterdam tomorrow morning, we’re meeting an investment fund”.
Having my first day be an investment fund drilling into all aspects of what Hatch was going to be was exhausting but very exciting. My head was spinning with competitors, revenue, partners, strategy, finance after the meeting which went on for twelve consecutive hours. Getting thrown in the deep end was a smart way to set the expectations of the next 6 months, because they were going to be intense.
I was beginning to understand what a startup accelerator actually does, and how it works, but it’s a bit tricky so let me break up the chronology with an explanation.
What is an accelerator anyway?
Being a startup myself, I’d done some research on accelerators before joining the Hatch-team. I even contemplated joining YCombinator (the most famous accelerator in the world). Hatch is what I would call a fairly typical accelerator, so my experiences should be transferable to others as well.
An accelerator is a program for new companies, called startups, that runs for a predetermined period. The startups get cash and services during this time in exchange for giving the company running the accelerator equity in return. The accelerator is betting that this equity will be turned into a profit when the company is selling it’s shares. There are often outside investors that partner with the accelerator to get access to the deal flow (fancy way of saying stream of companies), that will invest in the best startups post the accelerator period.
Accelerators are for profit, so you also get a term-sheet to sign. A term-sheet is the details of the deal you will take with the accelerator for being able to participate. Typically you give up a percentage of your company (equity) against a lump sum of cash and the program itself.
After the term-sheet is agreed upon, you typically get an invitation to move to a location for three months to work intensely on your startup. You get the invitation together with around 6–12 other companies that, depending on the type of accelerator, either are in the same sector (aquaculture, finance), use a specific subset of technology (biotech, block-chain) or just are building new and innovative stuff (hardware, software).
For outside investors the accelerators act work like a three month long due diligence process. The accelerator team works so closely with the startups that they can easily distinguish where the great potential lies. Many think that the final demo day is when the judgement is made, but that’s not always the case.
An accelerator is not only a three month crunch period for the startups. It’s also a place to learn from other startups, help others, become friends with other ambitious people and get new perspectives. Creating an environment to foster this atmosphere takes some thought and should permeate decisions when building the accelerator.
Building a successful accelerator space
So in the beginning of the year we were four people working full-time in the Hatch management team; Carsten Krome as the CEO, Wayne Murphy as the COO, Georg Baunach as the Program Director and me, Emil Lindfors as the Program Developer. This team was going to build the worlds first aquaculture accelerator in Bergen Norway.
Building an accelerator is a complex project
When undertaking complex projects like this it’s not always easy to know what to prioritize, as there are just so much to do. Luckily Wayne, who ran about 5 accelerators before joining Hatch, ha a good picture of what needed to get done for an accelerator to work.
We split up the tasks such that Carsten, our CEO did most of the partnership, legal and finance work. Wayne laid a plan for how the program would be tailored, which mentors to invite and scheduling. Georg and I were tasked with marketing, hunting for startups, and building the actual accelerator space.
Wayne had made it very clear that a great co-working space was crucial for an accelerator to work. Carsten and Georg had negotiated a great office space on BTO that could be able to host all startups and a great presentational area. The only problem was that we needed to build the space ourselves. In Norway. In three months. There was some hurdles between us and that cool co-working space we knew we needed to build back in January. A meeting room needed to be demolished, a whole set of offices needed to come down, electricity, ceiling, carpets and other things needed to be put in place. We also needed to actually design the space to look good and foster that spirit of creativity and collaboration. I bring up this point for others considering an accelerator, that it really is a lot of work.
Have everyone included in the most pressing tasks
We hadn’t accounted for the costs in Norway, which led us to have to to many things ourselves. That’s why it’s great to have a flexible management team that are not afraid to do tasks that would be considered menial by others. Like the fund developer helping to buy a water dispenser second hand and the program director and CEO going to IKEA to buy furniture. A team that does whatever needs to be done without complaint really helps with getting the best results possible. You can achieve this by having everyone aligned with a tight knit management team. We all knew the space was going to be a key selling point for the whole venture, so everyone helped.
Dividing a shared space
At the end of the day, we did manage to setup a space that we were very happy with, and the teams seemed to be able to get the most out of their stay in Bergen. It’s not that complicated, we had around 300 square meters for 25 people, and it was divided as such:
- Shared office space where all startups and the management team sat and worked together.
- Presentation area with sofas and fold-able chairs for pitches, talks and mentor sessions. If was also great for the soccer world cup.
- Two meeting rooms for one-to-ones, meetings, calls and other things that would otherwise disturb the shared space.
- Kitchen and a small space to eat and have informal breaks away from the shared space. We of course had an aquarium there.
Spreading the word about the accelerator
Create flagship content
The video above is our promo video that we created as our main piece of content to describe what we do. We knew what we wanted to communicate, so we shot much of the content ourselves. Most of it is shot on a nikon 3200 with a cheap lens by yours truly. We visited some industry farms and labs to shoot some of the other stuff you see.
One thing to note here. It’s great to talk to someone who knows something about videography before doing the shooting. We messed up a lot of shots by having shaky footage, messed up colors and wrong framing.
Fortunately, our great editor Jørgen at Mainlink managed to cut together a fantastic promo video, with what he could salvage and also added some great drone shots and other goodies.
We have used the video in almost all of our presentations to investors, startups and others. It’s been monumental for us being able to share our story and vision effectively.
Talk to people, all the time
There were many calls to mentors, startups, news outlets and partners.
Attend events and talk about the accelerator where possible
We attended a lot of conferences, talks, media, interviews to establish Hatch in our domain. In March, or partner NCE Seafood Innovation Cluster kindly invited us to collaborate on the North Atlantic Seafood Forum (NASF) innovation day. As an accelerator you can provide exciting content to events, and they can provide a scene. Getting such a deal is all about having great partners who trust you enough to convey this to the event organizers.
Spreading the word about the accelerator is extremely important to get the attention of those who accelerators are all about, the startups.
Getting the right attention though an attractive message in the right channels is crucial, and is pretty much a description of what marketing is. Creating websites, application forms, social media profiles, getting partners to talk about you, going to conferences, and speaking at events is mandatory
Selecting the startups that fit
There is a lot to consider when it comes to choosing the right startups to attend the cohort. You want the best, but you also want a mix of companies that are not directly competing for example. A cohort with too much friction will lead to poor collaboration which in turn will lead to lower performance overall.
The team did a lot of interviews with both startups and mentors. Our shared calendar was constantly packed with calls, which is something to be expected. When evaluating startups there were often a lot of calls back and forth. With our final selected few, we’d gone through a whole barrage of calls:
- Introductory calls to the startups with one person.
- In detail calls where more of us would sit in.
- Calls to meet the whole team.
- Technical calls to evaluate the technology through demos
- Check-up calls to see that everything was going well.
- Term sheet discussion calls
- Confirmation and Visa call.
It’s important to take into account just how labor intensive, but also extremely important this process is. You’d be shooting yourself in the foot by cutting corners here, as this is the companies that you’ll spend at least three months of blood, sweat and tears on.
We had a lot of great conversations with many startups, which means that even if they weren’t selected for the first cohort, we still keep tabs on the interesting ones and track their development for subsequent cohorts.
Our plan was to get an even mix of companies from our focus areas.
- Nutrition: Novel feed ingredients such as alternative insect proteins new processing technologies.
- Health: Health management such as prevention systems, new vaccines and prebiotics.
- Technology: Farm management such as automation, predictions, real time monitoring, water quality management and digitalization.
- Production: New production systems such as offshore farming, new species and genetic improvements.
We selected eight companies from all around the world with as much spread we could from our focus areas. There were some challenges to balance the cohort. We realized that production and health oriented companies were harder to scale and might not fit into the accelerator model where we could provide enough value under that intense period. At the end of the day we are very happy with the eight all-star teams we did select:
- AlgaePro (NO): AlgaePro promotes industrial production of microalgae and sales of the algal biomass for end products, such as nutritional supplements, animal feed, cosmetics, feedstock, bio-plastic and fertilizer.
- AquaConnect (IN): Aqua Connect’s Omni channel marketplace provides Indian aqua-farmers with access to quality hatcheries, suppliers and export markets and addresses the sustainability issues of a 5.7 billion USD aquaculture products marketplace.
- Finless Foods (US): Finless Foods is producing high-quality seafood without mercury, plastic, antibiotics, or added growth hormones. They’re also doing it without fishing or any animal cruelty, by producing just the meat of an animal using cellular biology.
- JALA (ID): JALA is a shrimp farm solution where farmers can manage their farm based on data to boost yields and create a sustainable business. Jala provides a farming assistance that combines monitoring devices with a software platform.
- Manolin (US): Manolin brings a digital solution to accelerate the sharing of resources between companies to better treat, manage, and prevent sea lice outbreaks in the salmon industry.
- Sensaway (PT): Sensaway is the bridge between sensors and monitoring systems. Sensaway allows aquaculture companies to add sensors to their current network, aiming to improve sensor data quality, reduce maintenance costs and empower the end-user with an easy to maintain solution.
- TradeIt (GB): Tradeit is a online seafood marketplace connecting the seafood industry by providing a full-end trading platform to allow importers and exporters to interact through a collaborative business model.
- Verifik8 (TH): Verifik8 helps to monitor and verify both social and environmental performances in the food supply chains. It provides data intelligence and analytics for robust suppliers’ screenings and monitoring international operations.
Running an accelerator
I remember Wayne telling us before the cohort arrived that you could only plan so much with beforehand with an accelerator program. Tings change, visas get denied, mentors pull out, startups get sick etc. It is important to think of an accelerator as a live organism where we would have to react to whatever unpredictable events would occur.
Looking back it it was great to have Wayne's experience to navigate unplanned events when they occurred, but also the feeling that it was okay that things did not go according to plan encouraged us to do what best we could with what we had.
Teach and support the startups is the main priority
As an accelerator, you in a way work as both the servant and master to the startups. Give them everything they need to do what they need, but also push them to perform their best.
One of my best learning experiences during the program was when we sat together with our mentors and had open discussions with all startups participating. You’d frequently get so many perspectives on an issue that they would open up new ways of attacking problems and build a collective insight that would enhance the discussion between the startups afterwards.
Another insight was how important connections and references are. Having a startup being a part of something greater, such as Hatch meant that our startups much more easily could get meetings and have conversations with people in the industry who’d otherwise ignore them. An accelerator with a strong industry connection such as Hatch thus act as a validator that saves a lot of hassle for both parts.
Startups have different needs at different stages
Everyone starts at different places, some have more business understanding than others. It is important to establish a baseline of knowledge to make sure the startups have the tools necessary to grow into global companies.
Some basic business knowledge is expected by the companies at the end stages of the program, which at times includes home studies. Lean startup, business model canvas, product market fit.
Some people, like Wayne, will often say that an accelerator is like a mini MBA. Entrepreneurship and startups need to be taught practically anyway, you wont learn how to create a successful startup from reading a book.
Marketing is important
Both the accelerator and the companies should be doing content marketing throughout the program. It sucks, but it needs to be done. You cannot expect everyone to do it, but to have at least one or two startups that are active on social media is necessary to be visible.
It helps when you got superstar companies such as Finless Foods in your cohort!
Everybody can’t win
There are no participation trophies, only the companies with the most potential will get follow on funding. For the companies entering this means that they shouldn't expect the follow on funding.
The rule of three means that 1/3 will fail, 1/3 will survive, and 1/3 will succeed. It makes sense that the accelerators only invest in the top 1/3 of the cohorts that are deemed to be able to succeed. This means that around three companies in a 10 company cohort will get investments. But hey, startups are all about trying again, not with a better skill-set than the last time you tried. It’s a journey about learning.
We had eight startups from seven countries that went through 30 mentor sessions that met 40 investors in 17 different countries and got investor ready in 90 days.
It’s always good to ask someone else to give their opinion. these are three quotes we collected during these three months. They are of course biased, as we work closely with our partners and startups but they should give an indication that we at least did something right.
“I have never seen a better management team dynamic for an accelerator… EVER!”
“Hatch has given us everything that we needed to accelerate our business. We knew that as a team trying to enter a market in a new country, Hatch could play an important role in helping us get integrated into the ecosystem. Through the mentors, introductions, and advice, we’ve grown our business much more than we could have envisioned otherwise. The program has done more than just teach us the needed skills to run a business, it has changed who we are and how we think about building our company.”
“Innovation is at the core of Cargill’s value proposition and we’re keen to work with those who share our passion for sustainable aquaculture. So, it was an easy decision for us to support HATCH and the entrepreneurial start-ups that took part in the first Bergen cohort. The program has certainly met with our expectations and we’re excited for the future prospects, including in the nutrition space.”
Ian Carr, Strategic Marketing Director, Cargill Aqua Nutrition
We’re of course humbled by all the positive feedback we’ve gotten on this journey, and it’s great to see that hard work pays off. We still have our demo day in front of us, but it really feels like the companies have gotten something out of this, and that it was a great idea to do an aquaculture accelerator in Bergen. And what a place — the support from this world class aquaculture ecosystem has been phenomenal.
Our goal at the end of the day is to teach entrepreneurship to startups, and to boost the ecosystem to feed back into the next cycle. Everything in the startup world is about iterating. And believe me, Hatch will iterate.
We’re all taking a well deserved break during summer, but things are nonetheless moving. Hatch is running the second cohort in Cork, Ireland this fall, and applications are open. If you are a startup in the aquaculture space, I hope you’ll at least consider applying!
After Ireland, the third cohort will be run in Singapore during spring 2019, which is a great Asian aquaculture hub that the Bergen cohort visited during the program. Hatch will return to Bergen again for the fourth cohort in the fall of 2019, a year from now.
At the end of the day, we believe that aquaculture will play an important role in feeding the world with sustainable and healthy proteins, that’s why Hatch exists. Feel free to reach out with whatever inquiries you might have and I’ll try to do what I can.
About the Author
Emil Lindfors is pursuing a masters in Innovation and holds a Bachelor in Aquaculture Biology. He is now the founder of an aquaculture technology startup. This has led him to get involved in the aquaculture startup ecosystem leading initiatives such as AquaHack and IHS. For the past six months he has worked at Hatch and will continue part time until the next program.
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