Saturday Jan 18th 2014 was the first Hy! Demo day, gathering accelerators from around Europe. The format was each accelerator introducing themselves and showcasing their best 3 startups, each with a 3 minute pitch. The wacky Berlin location (disused swimming baths) was overwhelmed with 800 people showing up.
The Tech.eu blogger Robin Wauters kicked off the day with some research about the European accelerator ecosystem. He said:
Entrepreneurs don’t care where they are based. They will move to the best location.
Re: the debate about whether there are too many or too few accelerators: everyone has an opinion, but accelerators themselves say there should be more (but keep the quality high). It’s like saying “can there be too many angel investors?”
What makes a successful accelerator? The possible criteria for judging it are: exits, investment raised, follow on valuations, job creation, IP created…. Exits and valuations provide the strongest justification of a viable ecosystem, however, the ecosystem is still too young to have generated these figures. Even in the US, Y Combinator is an outlier.
Its the mentors who really make the difference. The rest (eg. office space, a bit of investment, etc.) are low barriers.
The culture of the city doesn’t matter. But start-ups should move to where’s best.
Back on the quality vs quantity question. Nobody can judge it. However, the more accelerators, the fewer great start-ups who fall through the net. Poaching does go on between accelerators.
(I ducked in and out of the presentations as there were other networking areas, so this list of accelerators present is incomplete)
Techstars talked about their experience in London: 1,500 applications for 10 places. David Cohen started Techstars (in the US) because being an angel is hard: drinking lots of coffee, reading lots of bad pitches, crossing your fingers…Creating an accelerator was a better solution.
Techstars thought that Europe would be different. It’s not: Techstars US start-ups raise on average $1.5m each – Techstars UK is similar.
Corporates are frightened. A corporate can take 90 days to organize a strategy meeting. In the same 90 days a start-up can go through an entire accelerator program and come out with a viable product. This is why Barclays has built a fintech accelerator in London (and committed to 6 programs over 3 years) – the corporates know that they themselves can’t innovate at this speed.
Adam Wiggins from Heroku talked aobut his experience at Ycombinator in 2006. He said “Ycombinator really took us up a level”.
Helsinki Startup Sauna. We are getting the brightest people in. We are 3 years old, no big exits yet. Finland had a big-corporate culture: now this has changed.
Y Combinator took 6 years before getting exits.
One of the main benefits of an accelerator is as a support group for entrepreneurs. If you realise you’re not going to make it then you can fold into a more successful startup.
Deutsche Telecom’ accelerator is called hub:raum and offers financing (100-300k equity), Co-working, Mentoring, Leveraging, Helping by promoting (mobile) apps on their network.
Startup sauna (Finland) runs a 5 week program, then silicon valley, then demo day. 8 batches so far. Non-profit, takes no equity, for free, invests 10k + 30k government money
Axel Springer’s accelerator is a joint venture with plug & play from the US.
Pro7Sat1 accelerator offers EUR 25K, 3 months on campus. 1 wildcard for EUR 7M of TV advertising. All for 5% equity.
Not just mobile apps
Berlin hardware accelerator Hardware.co was present and one of the other accelerators had a robotic startup.
The relevance of all this to Switzerland
We shouldn’t try and hold on to every start-up – they should go to where makes sense. Many will come back, or at least ‘build bridges’.
We should have our own accelerators focused on what we do best: think medtech, micro-technology… and attract the best startups in these domains from all over Europe.
A great start-up pitch is not “here’s our idea”. Instead, it’s “we’ve cracked it: we have the best product, the right team and we’ve found our market”.
Comparing what I learnt from these 3 minute pitches vs. what I know about eg. the early stage startups at la Forge at PSE I don’t think Switzerland has a problem generating ideas which are good enough.
Obviously there’s still a discussion on accelerators vs. incubators or one-to-one coaching/mentoring. But its clear that there’s a lot of momentum towards accelerators: I’ve mentioned several corporates in this blog post who are taking it seriously and articles about this ‘revolution’ are appearing in the serious business press http://www.economist.com/news/special-report/21593592-biggest-professional-training-system-you-have-never-heard-getting-up-speed.
Thanks to Go Beyond for a free ticket.