My name is Max Roebuck and I’m the founder of a new London based IOT start-up called Crowder. This is my second instalment of what it’s like for a UK founder to go through a Silicon Valley Accelerator.
Those of you that read my first guest post will have gained an understanding of the motivations behind taking part in a US Accelerator, the type of exposure and opportunities to learn that you can expect to receive, and an overall feeling for how the US differs from the UK in terms of investment mindset and business opportunity.
As I’m now over two thirds of the way through the programme, I wanted to recap on how things have developed and give you an idea of what it’s like:
The first month was heavily focused on drilling down into your offering; not only from a value proposition perspective, but also from a logistical stand point. Many founders, myself included, believe the concept that has been bouncing around in their head is the product of months of validation, testing, re-evaluating, pivoting, tweaking and more testing (if it’s not, it should be). Therefore, when someone asks the simple question “Why would someone buy your product”, you’d be forgiven for thinking your feature-loaded, customer journey-laden response is the correct rebuttal.
What the accelerator has taught me is to always think deeper. “Why would someone buy your product” – “Because it offers X, Y and Z.” That may be true, but what does this mean to your customer? Answering this requires you to get right to the source of their need or interest.
For instance, it might be something like, yes - that Task Manager app helps you organise your day, but what it really does is free up more time for you to spend with your kids… Once you understand the TRUE value of your product or service – that basic human need or instinct it’s servicing - it can often result in you looking at your business from a completely different perspective. Ultimately, it allows you to create a far richer, more valuable offering or experience.
Why choose an Accelerator?
Of course, you can do this without an accelerator. However, where an Accelerator excels in this regard is by surrounding you with a broad spectrum of quality people, whose job it is to really drill into your business. It’s as if you’re sitting in the ‘Bluesky department’ of your business and bouncing ideas around with great people who genuinely care about your success.
As a start-up, it’s highly unlikely that you’d be able to get in front of so many experts and mentors at once and in such a short period of time. Even if you could, you probably couldn’t afford their time – with an accelerator, you can. So as long as you keep an open mind and listen to the feedback you receive - despite turning your business model on its head - then chances are you’ll come out of the process a more enlightened founder with a stronger value proposition.
Optimising your value proposition starts from day one, and is an ongoing exercise. As the Accelerator begins to get a better idea of where your strengths and weaknesses lie, both as a business and an entrepreneur, you begin to be introduced to people who can help fill in the gaps.
You get the opportunity to meet people from across the business spectrum, such as HR, PR, Marketing, Operations & Logistics, Manufacturing, Accounting, Mergers & Acquisitions, Technology and, of course, VC’s, Angels and Entrepreneurs who have been there and done that. This is all done with a view to broadening your skillset, knowledge base and, most importantly, your mind.
Progressing your business
Ok, so you’re learning lots of great stuff, meeting lots of interesting people and becoming a more professional founder… but what about actually progressing your business?
Many people I have spoken with believe that once you’ve been accepted onto an Accelerator, you simply step on, buckle up and enjoy the ride; that your experience will end in a predetermined location (Demo Day) with a predetermined result (Financed Raised).
This is not the case. You are still the captain of your ship; whilst the Accelerator helps you navigate and can even plug some leaks, ultimately it is you that controls the wheel. It is up to you whether you reach your destination or run aground.
You still need to sniff out clients, introductions, partnerships and investors, as no-one understands your business better than you do. However, now you have a support ecosystem that you can leverage and a value proposition that is even stronger than what you went in with.
Part of leveraging that ecosystem is knowing who to talk to, so you must take the opportunity to get to know everyone in the office, learn what they do, who they know and where they can help. I know most of us despise ‘office politics,’ but think about this more as networking. I assure you: good command of the ‘office environment’ will result in more connections, introductions and business opportunities.
Defining your expectations
I should say at this point that many start-ups will be defining their value proposition and building their product right up to where I am currently (2+ months in) and even right up to Demo Day. Depending on your business’ stage and needs, your experience may differ. Many go into the Accelerator expecting to build a product for the majority of the programme, whilst others go into it with a tried-and-tested offering and the sole aim of raising money. So know what you want out of the programme before you go in, but keep an open mind as you go through it.
I had a fairly solid idea of what my business was about, and had undergone a lot of market validation and testing prior to joining the Accelerator. As a result, my main objective is to tighten the bolts on the ship and raise our initial seed round. So aside from all the learning and blue-sky thinking that we’ve done over the past few months, I have also focused on finding a technical Co-founder, building our advisory board, further business development and meeting with investors.
Where the Accelerator can help with regards to team building and advisory board allocation is by providing both local knowledge and a quality assurance layer. Some of the potential co-founders I have interviewed have also been interviewed by the Accelerator, resulting in a few different perspectives and therefore a better chance of making the right hire.
As for the advisory board, not only can the Accelerator suggest people who could potentially be interested and a good fit, but they also serve as local knowledge. So where you might look at someone’s credentials and think “great, they could fill a knowledge gap and their employer portfolio adds clout,” the Accelerator can tell you “yeah, but they’re also well known for drinking a double scotch before breakfast.” This gives a certain level of protection for companies that aren’t as familiar with the local start-up scene.
Making the right connections
When focusing on business development and meeting investors, you should get into the habit of checking their LinkedIn connections, to see if there is anyone on the Accelerator who can introduce you before reaching out.
The Valley is very incestuous; more often than not, there will be someone you have met or know from the office that can make the introduction to someone you hope to talk to. Out here, most meetings are the result of a mutual contact. Your chances of success when going in cold are very low, hence the value in the Accelerator – it’s their job to know people and make these connections on your behalf.
The Accelerator makes talking to investors infinitely easier. Firstly, they help you get a solid idea of the type of investors you intend to attract for your round (VC’s, Angels, Strategics etc). Then, you compile a list of the ones most likely to be interested in your company, before sitting down with the Accelerator team to figure out whom you know that could facilitate an introduction.
Once you begin lining up investor discussions, it’s important to remember one thing. In the UK, there is a perception amongst some that if you are speaking with an investor the result will be a win or lose situation. You’ll progress discussions and receive a yes or no, then you won’t be able to come back to the table. Out here, they teach you to look at the whole thing as an ongoing process.
Ultimately, the job of an investor is to put their money into a business that will make them more money in the mid- to long-term, which they can then invest into another business. They want - no, NEED - to put their money into a business! Even when the market is all doom and gloom, more often than not, fund economics demands that they continue to invest in new companies, or they could risk destabilising their entire portfolio. That’s how they survive as a fund!
When going through the process of investor discussions, some will really like your idea; some will not; some will sit on the fence - but don’t be disheartened. The most valuable discussions (aside from those that result in funding) are the ones where you are turned down. Why? It’s simple. If investors say no, then it’s not because they don’t like investing, it’s because there is a problem in your value proposition or business model. You need to ask them what that problem is; if you get the same answer from enough people, you must address that problem.
Once addressed, the problem will no longer be a consideration, and you can focus on the next problem and so on. Eventually, you will have addressed all of the problems, and investors will no longer have any reason to say no. That, my friends, is when you get to open the mini bottle of prosecco (if you think you’re buying a bottle of champagne on their dime, you’re very much mistaken).
Early bird catches the worm
Ultimately, when you’re on the Accelerator you should start talking to investors as soon as possible, because if you’re too early or there’s a problem in the model, they will tell you. It won’t mean you can’t come back to them in the future; it’ll just serve as a way for you to improve your business. When you do eventually come back, having addressed their concerns, you’ll come across as a far more capable, trustworthy and responsible founder.
The earlier you start speaking to investors, the more likely you are to secure funding in the long term, off the back of an established relationship of trust. This is much better than trying to make your business perfect, then speaking with investors only to find they say no because of X, Y, Z, as you’ll need to go back a few steps.
The Accelerator can help with this, by structuring the initial discussions as informal meetups, so you get a foot in the door, start to understand what they like and what they don’t, and begin the process of knocking down their concerns in preparation for raising the round come Demo Day.
I’ve rambled on for long enough, but to summarise you can expect the first two months of an Accelerator to be about giving you the information you need to build a better business, and facilitating that development through structured introductions to potential partners, clients and investors. It’s a lot of fun and a fantastic experience!
The next and final month is all about preparing for Demo Day, with the goal of closing the round in the following weeks. So stay tuned to learn what the final days of the Accelerator experience are all about, and keep your fingers and toes crossed that I’ll be writing about what it’s like to close a round!