Now that Techstars NYC is ramping up for the fall 2015 class and accepting applications through June 28th, startup founders must be asking the question: Will TSNYC'15 (.5) actually help my company #domorefaster?
Probably. It all depends on the stage of your company and what you want / need to get out of the program. Techstars, and other similar accelerators, will help you in some ways but might set you back in others. In our case at IrisVR and in my case personally, going through the class and being a part of the community was (and still is) an incredible experience; #domorefaster doesn't even begin to describe what a kickstart Techstars gave to IrisVR. I am grateful for the help and mentorship, I feel like I am a part of the Techstars family, and I will carry forward the knowledge and lessons learned over the course of those three months for the lifespan of my current company and through every possible future endeavor. If you are considering Techstars or another accelerator program for yourself and your company, it's important to know what you are getting into before you start. Below are a few of the highlights from my experience. You should also get smart by reading Alex Iskold's blog, particularly his post on joining an accelerator, and talking to other startup founders, before you take the plunge into accelerator chaos.
This are the things that make accelerators great. They help during and after the program.
This is what everyone talks about - awesome mentorship. In the first few weeks of the Techstars program (and probably other accelerators as well), you essentially speed-date the entire network in your city, and many mentors around the world. Mentors are experienced folks who are there to help; they have seen some iteration of your story unfold in the past and will offer their advice, open up their network, and find or offer other resources to help you and your company grow. As a founder, you get this for free; it's amazing and it feels like cheating; awesome people doing awesome things for other Techstars founders without expecting anything in return besides a thank-you is truly what makes the mentor network great. It is also what inspires founders to pay it forward and become mentors for others, making the whole give first mentality sustainable.
As you may have heard, mentor advice can be conflicting (as is typical of advice, right?). As a result, founders experience what they call "mentor whiplash" almost universally. Know yourself, your product, and your company; be confident, but be open to feedback and use each conversation to explore other viewpoints, possibilities, and company trajectories. At the very least, mentor madness will build your network and is a great exercise to either inspire you to make small adjustments, big pivots, or increase your confidence in your company and path forward. You will meet a lot of people who might be enthusiastic or cynical at times, but they are all passionate and genuine. Mentor madness weeks at Techstars are a chaotic gift of time to talk a lot, listen carefully, and think hard.
Almost more important than the mentor network is the ongoing network of Techstars founders who's family you are a part of long after you graduate from the program. These founders all have an incredible drive and #givefirst attitude. For the most part, they aren't there to roll up their sleeves on your behalf as much as someone in the mentor network, but they provide a system of support, information, and instant feedback. Whether you are looking to find a tool or person to help solve a specific problem, someone to commiserate over tax woes or sleep deprivation, or some feedback as you tackle a tough challenge, it's likely that someone in the network can step in and step up to help. It's also likely that you have a connection, skill, or idea that will contribute significantly to someone else's success, too.
Startup accelerators attract people who want to go fast. Everyone affiliated with the program feels some internal pressure (in a good way) to keep building awesome stuff themselves. They love contributing to help other people do more faster. Everyone is of the same ilk - driven, compassionate, determined, and eager to help each other out. It's exciting and it's contagious.
How much is your company worth? How do you fundraise? Who is your competition? What are the big tech trends that you should be aware of before you build that new product, feature, or service? What is your market size or potential? How much equity should you give a cofounder? How about a new employee? How can you even start those conversations?
There are lots of questions with answers that are hard to find outside of the startup / venture capital ecosystem. Books written about venture funding are quickly outdated as the market shifts, companies are constantly reinventing how they recruit, hire, and sell, and the real beat on the street can't be read in the news. In an accelerator, you work alongside a cohort of other companies at similar stages, facing similar problems, gaining a window into inside operations and market trends. As a founder in the Techstars program, your advisors, mentors, friends, program directors, and colleagues all have their finger on the pulse of the startup ecosystem and collectively, they know the answers (or can guide you to discover the answer on your own) to many of the questions above. Easy access to this kind of insider information is so invaluable and saves endless research time allowing you to focus on what's important.
Angel funding and venture capital helps companies get off the ground and then grow way faster than if the founders built the company organically and on revenue alone. It's risky, but worth it for the right companies in the right situations. Most accelerator companies fall into this category and will need to fundraise at some point. People and firms with capital to invest, personal or institutional, frequently look to Techstars and other programs with proven track records when sourcing leads. This shouldn't be the main reason you join an accelerator, but it is a factor to consider.
Speaking of proven track records, Techstars is pretty selective. There is a rigorous application process and because Techstars succeeds when their companies succeed, they have incentive (economic and otherwise) to foster the growth of dedicated and promising teams and products. The validation of being in the program means that your company has, to a certain extent, been pre-vetted. To be candid, it's like coming from a brand-name university - whether it's fair or not is debatable and is a topic for another post - you typically have an advantage getting your first interview. From there, it's up to you, but the initial leg-up unquestionably helps.
In a sea of tech startups, in what is most definitely a technology bubble, getting the word out about yours can be a serious challenge. Even if you have your marketing nailed down and can reach customers easily, how do you get your company name out there into the tech world and connect with industry partners, potential employees, investors, and mentors (outside of the TS network)?
Accelerators are today's epicenters of tech entrepreneurship. Although you might see some accelerators as having an inflated sense of self-importance, and that might be true, I don't think it is a stretch to say that these hubs of the tech economy are good sources of news for up-and-coming tech trends. They are important players in the industry and being a part of one of these established programs will help you and your company make a splash in the ecosystem.
Home Away from Home
Y-Combinator is legendary for its sleep-deprived founders who sacrifice everything for their companies. Techstars is no different. Making sacrifices is part of the deal when you start a company, but it can be taken too far, especially when you are in an environment day and night with people who won't stop or can't stop.
The Techstars office in NYC has a completely open floor plan. You work literally next to and across from a dozen other chaotic companies with their own crises and successes. While this leads to collaboration, it can be totally draining. This is where you are going to work, and basically live, for three months.
Thrive in this environment and use it to your advantage, but don't forget to take breaks. Work from a coffee shop around the corner for an afternoon, hang out at home for a day on the weekends if you can, or go for a run during the middle of the day in Central Park. This will keep you sane and capable of flourishing amidst the chaos.
Product on the Back Burner?
Build product before you get to Techstars. For three months, you are going to be selling, pitching, and life will be reactive as much as proactive. Yes, you will have time to work on product, especially if you have a larger team. At the same time, as a founder you will be frequently distracted and have few extended periods of time to deep-dive into product development. Accept that you will benefit from this learning in the long run and even though it feels like pushing back that next software release is the end of the world at the time, it won't set you back in the long run.
Accelerators are not incubators. They are more focused on growth than initial development. The more you have to work with when you get there, the more you'll get out of the program
It's a Small World
The startup community is small, the tech entrepreneurship community is smaller, and the Techstars network is a subset thereof. It can be insular and news travels fast. This can be a serious advantage, as I mentioned previously, because complete strangers can step up and help out at the drop of a hat. On the other hand, the game of telephone can spiral out of control and the latest speed bump can turn into a drama. At the end of the day, humans will be human - just be transparent and you can avoid the pitfalls of being embedded in any bubble.
Terms and Conditions
I can't say this enough: Know what you are getting into. Make sure you read and understand how much of your equity you are giving to Techstars as a fee for the program and what you get in return. It's steep. Is it worth that much equity? In my case and in the case of IrisVR, it certainly was. Absolutely. Everyone and every company is different and you need to make up your own mind. The terms are really straightforward - just read them.