Obvious Lessons from Accelerators Around the World
As part of SkyDeck’s mission to bring the worlds’ best startups to UC Berkeley, I’ve traveled and met with many of the best emerging accelerators and investors around the world.
And in many of these conversations, I’ve walked away with learnings that we’re applying to our program at Berkeley SkyDeck.
This isn’t meant to be exhaustive or a list of the “best”, but rather just a brief travelogue of the platforms which helped me better understand the global accelerator ecosystem. Am I missing any, especially any that should be a partner with Berkeley SkyDeck? Let me know!
Obvious Lesson 1: Solve Real Problems
Courtesy of The Bridge (Israel)
It’s no secret that Israel is a hot bed for startup innovation. After all… there are literally books written on the subject.
Spending a few days meeting some of the best accelerators in Israel merely reinforced that point. Israelis are highly-educated, well-prepared to be leaders (due to mandatory service in the IDF)…. and as citizens in an “island nation” of 7 million people, their startups are launched with the intent of tackling Western markets.
However, Israel has also become swamped by accelerators or incubators. By last count, there were apparently hundreds — many are backed or sponsored by government innovation funds. On a per-capita basis, this has to be the highest density anywhere in the world.
So, it’s with this context that the Bridge began to pivot — rather than describing itself as merely an “accelerator”, it’s defined itself as a commercialization platform.
In a society where startups are part of the common consciousness, founders don’t really need help building a pitch deck, or learning how to A/B test their go-to market campaigns — they get it!
Instead, the obstacle to success has moved downstream… the real problem founders face is accessing target customers / partners. They are looking for curated access to corporate partners, to large enterprises (like Coca-Cola) which increasingly look-to startups for inspiration, but aren’t structurally able to move quickly enough to engage with the typical early stage startup. And that’s the expertise that the Bridge has built, in order to resolve that precise mismatch.
For Berkeley SkyDeck — this is a lesson we are taking close to heart as well. Silicon Valley has no lack of competing accelerators, and founders are increasingly sophisticated entering into our cohort programs. At the same time, growing number of corporate venture funds are looking to engage in an effective way.
With that in mind, we’re consciously reducing some of the “startup 101” content in our program, and instead doubling down on curated access to corporate partners customers. On the one hand, that implies working closely with our industry partners to understand their internal innovation process; on the other hand, it means working closely with founders to mature their product to the point that it’s truly commercial ready for large enterprises to deploy in pilots.
We’re also blessed by a strong network of 500,000 living UC Berkeley alumni, many of whom are in senior leadership positions in every industry. When they find out the success of SkyDeck startups financially benefits campus, they’re extraordinarily generous with their time.
The bottom line: as the ecosystem evolves, as startup founders evolve, accelerators (and investors) must evolve to match.
Obvious Lesson 2: Do What You Know
Courtesy of Puente Labs (San Francisco / Latin America)
As I look around the halls at SkyDeck, an interesting demographic pops up. In the Spring 2018 cohort, the second most common language behind English is actually Spanish. We have startups in robotics (Kiwi), AI (MindsDB), biotech (Nextbiotics), and enterprise SaaS (SkyAlert), where the founding teams are at least in part from Mexico, Costa Rica, Peru, and Colombia. Many of these founders were graduate students at UC Berkeley, but there’s no mistaking their national origins.
As a long-time early stage investor, I have to admit I found this surprising initially— I’m color-blind when I look at any deal (I’m an engineer!), but I admit to having a racially-tinted, stereotyped preconceived notion of what a startup founder would look like. Quite frankly, Latin America has been off the beaten path for venture capital — VC firms have satellite teams in London, Israel, India, Singapore… but very few have established roots in Argentina, Chile, Brazil.
And I suspect that’s why there have been very few venture success stories out of Latin America — so far. (Happy to say I think that’ll change soon, as the four startups we’re accelerating out of SkyDeck will raise significant venture funding this summer.)
I’m happy to say that this close collaboration with Latin American startups at SkyDeck is likely to continue, in part due to our close partnership with Puente Labs in San Francisco. (And I’d be remiss to not mention other strong partners in this area, including SV LATAM!)
Run by a group of investors and executives based in Silicon Valley with strong ties to the region, Puente Labs has had a long time mission of helping Latin American startups succeed in Silicon Valley. They’re connected with a strong network of VC investors and accelerators, including organizations like Endeavor, Startup Chile, and more. They have tremendous visibility into the deal flow coming out of these countries — including recommending a very compelling Argentinian startup developing an optical communication system for LEO satellites.
And yet, Puente Labs also reached a bottleneck as they looked to help these teams localize and succeed in Silicon Valley. While they had remarkable insider access to many of these deals, and while they’ve provided a range of services for many… for the early stage seed/A round startups, landing in Silicon Valley remains remarkably different.
- The remarkable traction some of these startups have had at home are ignored; who knows whether American customers will react the same as customers in Mexico?
- The technical expertise of founders are discounted; how many Silicon Valley VCs have been to Tec de Monterrey, and how technically proficient their graduates are?
This, of course, makes it the perfect partnership.
Puente Labs and other top Latin American partners will keep sending us their top startups; we plug them into the UC Berkeley community, combine them with the best talent best UC Berkeley has to offer — and end up producing a complete startup team ready to sell to Silicon Valley customers, and pitch to Silicon Valley investors.
The lesson here: do only the things that you know well, and look for partners to help with what you don’t know well.
Obvious Lesson 3: Location, Location, Location
Courtesy of Techstars Berlin (Germany)
Techstars is one of my favorite accelerators — I’m a mentor for a few of their programs, and I’m also a happy personal investor in their fund (as well as several Techstars graduates). The work they do around the world is remarkable, and that in part explains the tremendous momentum they’ve had as they scale globally. They’re doing an excellent job of taking the same, consistent, successful startup formula that was first piloted in Boulder, CO to every corner of the world.
One of the companies in the S2018 SkyDeck cohort (Keyword Hero) was also a graduate of the Techstars Berlin program. They had decided they wanted to join our program, even though they were revenue generating, and had already successfully raised a venture round while in Techstars Berlin.
Their explanation was simple — we want to quickly build a global business, and the only way to do that is in Silicon Valley.
These were the early days of SkyDeck, and I wasn’t quite convinced. Culturally and linguistically, these guys seemed like they would be able to land here and thrive immediately. What did they really need from us? I couldn’t help but be skeptical… surely there was something fundamentally wrong with their product that I was missing? Why does anyone need two accelerators with similar financing terms?
I was fortunate to be a personal investor in a different US-based startup founded by former Googlers, also working in a related Google Analytics / AdWords SaaS product (and that happened to be from Techstars!). I couldn’t think of a better person to run through their product and give me some feedback; after all, they were part of the same Techstars family, and there was enough overlap this might have even turned into an order.
The response on the reference check was positive, but with a caveat:
- loved the team,
- loved the SaaS product,
- sure, customers will totally find this useful!
But I asked my favorite due diligence reference check question, would you buy this product?
- … no… because… “well, they’re a German company”.
And that brought it home. Even in this day and age when the Internet has no borders, it still does have borders. Often subconsciously, we make many assumptions about a company based on external factors beyond the quality of the sales pitch.
Headquartered in SF? Great — if they’ve successfully carved out a market in Silicon Valley, it must be disruptive technology.
Headquartered in Europe? At least in the US markets, foreign founders have to do more convincing customers their product (and follow-on service) is reliable, dependable, and won’t simply disappear into the ether.
In other words: location, location, location.
Obvious Lesson 4: Hustle is universal
Courtesy of TomyK (Japan)
At SkyDeck, with our strong scientific community, we like tools that solve problems for scientists. The challenge for me as an investor, and for our evaluation committee as a whole, is that we lack the insight to gauge the value proposition for some of these deeply technical tools.
Our partner TomyK is an active angel investor / incubator working actively with Tokyo University spin-outs, and he referred a startup into our funnel that fit this category perfectly.
Founded by a Todai professor and a former UC Berkeley PhD, this team had built a flow cytometry device that heavily relied on machine learning to enable a new class of cell sorting, at very high speeds.
I could just barely follow the what of what they were doing, but I struggled with the why. What’s the pain point being solved here? Who are the users of this kind of scientific tool? Is it only for medical research (a tiny market), or could it be used in clinical diagnostics (a huge market) some day?
And even worse, what about the existing product that had dominated the space for 15 years, which while it lacked sorting had just about every other feature? Could these guys really compete with that, when they can’t even explain the merits of sorting? And being strongly technical founders early in the process, they just couldn’t explain their story effectively.
And just like that, they were on the edge of being cut from the application process. With over 600 companies applying for 20 spots, we can’t afford to be too merciful when evaluating companies — we need to make decisions, and move on.
But then, the hustle showed itself. An email arrived in my inbox from the founder:
“By the way, the former founder / CEO of our largest competitor has agreed to join our Board.”
Wait, wait, wait… what!? This was precisely the competitor that had dominated the space for 15 years, and the former CEO had joined this team?
Coincidentally, the former CEO happened to be in town (and also a Berkeley grad!), and we were able to get together and discuss the company in more detail. He was effusive in his compliments of the new solution, calling it the “holy grail” (if it ultimately works at scale!) that his own previous product never quite achieved.
And with that kind of a strong endorsement the company, of course we viewed the company in a totally different light.
But when I asked how the CEO had joined the board…? Where was the connection?
“These guys from Japan reached out to me completely unsolicited, flew up to Seattle just to meet me for coffee, showed me their plans, and brazenly asked me to get involved.”
That’s the definition of hustle, and that‘s the one attribute that defines success across all national borders.
Berkeley SkyDeck’s Spring 2018 cohort holds its Demo Day on May 15th; apply to attend.
