How we built a niche healthcare accelerator
Last year we ran our first ultra focused healthcare accelerator. EyeFocus is, as the name suggests, focuses on innovation in the eye care technology. It was set up to explore some ideas that I had developed after spending a lot of time mentoring around Europe’s accelerators and working with some healthcare startups. I am also doing a very part time doctorate about this at the very entrepreneurial University of Huddersfield, so I was forced to apply some academic rigour to exploring what does and doesn’t work.
I am grateful to Jonas van Hove and the team at Imperial College, who have done extensive research on this, some of which has been published by NESTA. At a recent symposium they organised at Imperial, a group of academics gathered to discuss some of the wider findings of the academic community. Myself and John Lewis, of TEKTOS, were on a panel as two of the people who are both researching and running accelerators — everyone else seems to be doing either one, or the other. This latter point is understandable, as both are very time consuming.
The ideas I was testing with EyeFocus were:
1. That a very focused accelerator can offer better support to startups in that sector
2. That an accelerator can be a powerful tool for building an ecosystem
3. That a well connected ecosystem supports innovation
4. How can an accelerator be more social in its outcomes?
The first idea, that a focused accelerator can offer better support for startups came after working with a number of startups that were in some of the top accelerators in Europe. Without criticising the accelerators, it became clear that as the startups become more specialist, the support they need also becomes more specific. The general accelerators could introduce the startups to an amazing group of investors and mentors, but increasingly the startups found that without specialist knowledge, these networks were not that useful.
Accelerators were already beginning to go niche, especially with Startupbootcamp starting to run sector specific programs. What we did with EyeFocus was just take this one step further, and run around a niche within a vertical (eye-care within healthcare).
We were then able to build a mentor base that was divided between specialists in eye-care, and generalists within tech and business. This takes into account that some specialist accelerators only have specialist mentors, which risks leaving the startups without the general business support they all need.
The second idea, that an accelerator can be a tool for building ecosystems is nothing new. One might argue that is what all of them have been doing. However, I was interested in stripping away some of the other elements of the business and focussing on the ecosystem. Within a specific niche, like eye-care, there is plenty going on, but not being a mainstream industry sector, and not being mainstream in the highly networked startup sector, the eye-care world is fragmented and disconnected. This creates obstacles within the network structure that stops the spread of ideas and growth of innovation.
It has become clear that an accelerator is a unique entity that can sit comfortably between everyone else and act as a junction. An accelerator is temporary, so it is not competing for anyone else’s space. It is also different to everything else — it is not a university, hospital, corporate, or NGO, so is outside of the politics and competition one finds within and between these organisations. Lastly, being very independent and agile, we had the freedom to adapt to fit how each organisation wanted to work with us.
I like to describe what we built as being a house with all the doors and windows left open. We found ways to work with everyone, and therefore build a network that is broad in its geography, expertise, and forms the hub of a dynamic eye-care innovation ecosystem.
We developed the following ways to engage with EyeFocus:
1. Sponsor
We are completely sponsor funded, no investors. This allows us to deploy money differently to an investor focussed accelerator.
2. Partner
Partnering varied from providing a mentor, or even just engaging over a Skype session, through to a visit and workshops. Keeping this easy made it possible to create some great partnerships, and in doing so to connect into our network a wide range of experts.
3. Mentor
Mentoring is key to accelerators. Some organisations found partnering too complicated — committees were needed to allow us to say we were working with them — so we took a key person as a mentor instead, so the organisation was still connected to what we are doing.
We then engaged with startups and companies in different ways too. This evolved during the program, and is still developing for our second program.
Startups
We initially had an offer for startups: 20,000 Euros and the full program in return for 8% equity in the company. This assumed a number of things; that the company was an early stage startup, that it needed 20,000 Euros, and that it would be able to attend the program.
Because we are so focussed on a vertical (all eye-care), the companies no longer fitted into a horizontal (all startup stage). We recruited some conventional startups, and then the problems started. First we had a great Professor and Consultant Ophthalmologist who was developing iPad apps to help his patients. As he said, ‘I have two full time jobs and a family, I can’t come to Berlin for 3 months.’
We then found a fantastic startup that was clearly a social enterprise, and it would have been inappropriate to make a conventional equity investment, but we wanted the founder and his ideas in our program. Then a company came along that wanted to be part of our program, but had already raised several million Euros. As they politely pointed out, we could not afford their equity and they did not need 20,000 Euros.
Associates
So we decided to let all these companies become Associates. We defined this as being part of the program, having full access to our activities, but without any funding from us. There was also no charge to them, so primarily this allowed us to create a larger and richer ecosystem.
A reflection on conventional accelerators is that they encourage hundreds of startups to apply, accept maybe 8–10, and then effectively close the door on the other applicants. With a generalist accelerator this makes more sense, but as we were building a niche ecosystem, it defeats the point to reject people and shut them out of the network. So the general idea is to be as inclusive as possible. Consequently, we went from having 8 companies on the program to having 16. Some of the Associates spent the full 3 months within the accelerator, others came for a week, and some only ever Skyped in.
We found having Associates very hard to manage, but it definitely created a stronger network and better experience for everyone.
Impact and Social Enterprise
We had a feeling that what we were doing was inherently social when we started out, but we did not explicitly call ourselves a social enterprise for fear of putting off investors and sponsors. However, as the program ran it became clearer this was the case, and we became more comfortable saying so.
Both Impact and Social Enterprise have mixed definitions depending where you look - Nesta have written a report on this. Our understanding is primarily that all the outcomes of our work help people who are blind or visually impaired. There are strong links between blindness and poverty — if you are poor you are more likely to become blind, and if you are blind you are more likely to be poor. Clearly there is a social impact in our work.
Beyond the obvious impact, we also found ourselves making decisions that were inherently social. A key feature is that we are sponsor funded. If we had investors, or had EU or Government money we would have been restricted in how we deploy our money. For investors there needs to be a clear potential return on how money is spent, and for government money there are usually a lot of restrictions and pre-defined budgets.
We had a pot of money from our sponsors which was to deliver the accelerator, and to deliver outcomes to them. But the sponsors benefit from the social outcomes as they tend to lead to the program being more dynamic and interesting.
We define Social and Impact as referring to profitable companies that have social outcomes. We think that social enterprises have to be financially viable, and ideally profitable, in order to grow and do what they do well, so there should be no compromise on the business, but the outcomes are clearly having a social impact. We apply that to our own business, and to our startups.
Some examples of how we deployed money in a social way include:
We were approached by two Estonian founders who had won a hackathon. They had no company, and just an idea, but both they and the idea were really good. We said that if they took a month off work, we would pay their costs to come to the accelerator for a month and we’d see what happened. They were great participants, and during the program developed their idea into a product which they are still working on now. We made no financial gain from this, but having them in the accelerator benefitted the program as they shared their ideas and enthusiasm with the other teams, they clearly developed as entrepreneurs, and their product will help people who are blind. (More at www.semu.co)
We met a brilliant behavioural optometrist at an event we ran in London. He was so interesting, and in particular a great fit for one of our startups, that we paid to fly him to Berlin to meet the startups. Consequently he became a co-founder of one startup and is now directly involved in that business. www.mrpatch.co
We had a team in Kenya who were not developed enough as a business to warrant an investment, but also did not have enough money to attend the program. We made them Associates, giving them the opportunity to say they had been accepted onto the world’s first eye-care accelerator program, and they Skyped into mentoring sessions, group talks, and other workshops from Kenya. As a result, they made contact with a Berlin based investor, and are still in discussions with them now.
EyeFocus 2 — What we learned and what we’re doing next
We learned a lot very quickly. Key takeaways are:
That the social element is important to us, and we think makes the whole program better.
We are outcome focussed, so any outcomes are good. We want to spread the value we create as widely as we can around the ecosystem. Creating a strong ecosystem is where our value lies. We may not make money from each interaction and outcome, but we make money from the overall ecosystem being better as a result of our work.
We want to be very inclusive. Next time around we aim to take 10+ companies into the core program, with another 20–30+ Associates.
We accept that half the companies in the program will be early stage startups, and the other half more developed companies. Associates will range from idea stage to post Series A. This is a clear lesson from EyeFocus1. We will plan for this, whereas last time it surprised us and forced us to adapt on the job.
When you focus on a vertical you can’t also focus on a geography. You can have general startups in Berlin, or eye-care startups globally, but not both. Our last program was very global — we had startups from 16 countries. EyeFocus 2 will build on this.
Instead of running over 3 months in one city, we plan to run the program over 3–4 months through a series of 3–5 day bursts of activity in each city where we find a lot of eye-care activity. We will convene our partners, mentors, and companies in those cities, and work alongside local partners to network our program with the local eye-care and startup community. We plan to run these in London, Paris, Boston, and Bangalore, but this will take shape as we develop the concept.
The result of this multi-location approach will be to super-charge the ecosystem building. The intention is to make sure the startups and associates have the best access possible to the knowledge, users, and customers they need to scale their businesses.
We will run a series of Idea Hacks before the Accelerator program. We developed Idea Hacks at the end of 2015. They are quick events, running from a full day to an evening. We get a diverse group of people interested in eye-care together to form teams and hack ideas in response to challenges set by a panel of experts. The panel frame the agenda, explaining the challenges and opportunities in eye-care from their perspective.
Our first Idea Hack had panellists from Bayer, RNIB, Aston University, and a blind disabilities campaigner. They explained the challenges they address across a very broad spectrum. We had 60 attendees, ranging from entrepreneurs through medics, to investors and corporates. Diversity is essential for innovative ideation.
Getting people to work together in small teams also breaks down all the social barriers of sector and hierarchy. The event is an anti-conference; instead of listening to panels, attendees get immersed in the ideas by idea hacking together. Instead of networking during a coffee break, the attendees roll up their sleeves and thrash out ideas together, and the panellists move around the groups effectively meeting everyone. We feel this is more effective than a conference.
Idea Hacks are our ecosystem building tool. We will travel around the locations our accelerator will run in and round up all the people active and interested in eye-care for Idea Hacks first. We advocate for our topic, engage locally, and find new startups and entrepreneurs this way.
You can watch short videos about our Idea Hacks here:
The program will therefore run over 6–8 months with a series of Idea Hacks, followed by a series of Accelerator activities, in a number of key cities. The focus will be on building a strong innovation ecosystem around eye-care, leaving the sector better connected as a result. We will partner with other ecosystem builders in eye-care and aim to act as the bridge between these different networks, creating a greater set of outcomes for everyone as a result.
Although it’s not a location based program, or conventional looking accelerator, this is still an accelerator because:
1. It is a program with a start and end date
2. It has a defined cohort of companies
3. It focuses on mentoring
4. It will provide some funding to the startups
