ClaimAir

Claimair: Fighting For Air Passengers’ Rights

ClaimAir helps travelers fight the airlines for compensation, because fliers don’t have the time and resources to do it themselves.
It’s is an automated platform that handles the end-to-end process of claiming owed compensation for delays, baggage mishandling, etc. Did you know that the average compensation owed was over 300 Euros?

I sat down this week with Jakub Ladra, Founder and CEO of ClaimAir, one of our 2016 Startups. Here’s what he had to say about fighting for the rights of passengers all over the world:


Hi Jakub, tell us a bit about ClaimAir, and why you decided to fight for the rights of airline passengers.

Hi Lloyd, thanks for asking. Let me ask you a question: the last time you had a flight delay, or a lost bag, how much money did the airline give you in compensation?

Now, if you’re like most people, the answer is that you didn’t get anything, or maybe the airline gave you enough money for a meal at the airport. But what people don’t know is that the airlines routinely owe much more, often hundreds of euros per person, for a delay or mishandling of bags.

ClaimAir makes sure travelers get flight and baggage compensations when they are lawfully owed by the airlines. Since ClaimAir works as an automated platform which allows us to process claims in high volume, we can provide our service not only directly to the travelers but also to our business partners.

These partners are companies like flight booking platforms, travel agencies, travel itinerary management systems, etc. We believe that our service can help them improve customer relationships, loyalty and last but not least, it gives them a strong competitive advantage. On the other hand, these partnerships help us to overcome our biggest challenge, which is the fact that travelers are not well aware of their rights and airlines usually take advantage of it.

 

Jakub Ladra, Claimair

Jakub Ladra of ClaimAir. Jakub has extensive experience in the airline industry, and wants to fundamentally change the way airlines treat their customers.

Back to your second question, my journey with air passenger’s rights started at the university when it was the topic of my thesis. It was in 2007 and no surprise, the thesis ended up in a box – luckily, not forever. I went through a couple of aviation-related corporate jobs, but I always knew it wasn’t what I wanted. I love the startup environment and the feeling of freedom which, in combination with my knowledge, naturally led to ClaimAir.

Do you see your mission as more than just taking advantage of the laws and regulations?

For us it’s not just about taking advantage of the laws and regulations. We live in an experience economy where customer service should be a priority. Trouble with your flight just happens, and obviously brings a lot of stress and frustration into your life. So our goal is to make the rules around air passenger’s rights as clear as possible and make air travel an even more comfortable way of exploring the world. We also have some plans that don’t relate to the regulated stuff, but I can’t tell you more at the moment.

What are some of the most common mistakes that air travelers make when it comes to getting what is owed them for delays, disruptions, and lost bags?

I wouldn’t call them mistakes. Travelers simply don’t know they are owed compensation and that airlines are in fact legally obliged to pay them out. For instance, when your flight is delayed for more than 3 hours on arrival, you can get €600 paid in cash. Regarding the baggage, the compensation can be up to €1,500. These are pretty good sums that airlines wish to be kept secret. Moreover, when you complain by yourself, the airline usually responds by using complicated legal arguments that you have no chance to understand and work against. The average traveler feels powerless next to the airlines.

What does it take, legally, to get an airline to pay legal compensation? Why is it so hard?

Naturally, it’s a common practice of a majority of airlines to keep their compensation budgets low. Therefore, if you don’t know the rules precisely and if you are unable to submit a strong letter of complaint by using relevant legal arguments, your chances to success are close to zero. The airlines usually respond by using some tricky legal provisions that exempt them from liability, but most of them are taken out of context. Overall, the legislation is damn complex and contains many grey zones, so it’s just difficult for an ordinary traveler to cope with it.

Let’s talk a bit about the numbers. How many travelers a day could benefit from your service? What are some of the other important industry stats?

Although I’ve devoted my professional career to aviation, I’m always amazed about those daily numbers. There are more than 9 million travelers transported by air every day and approximately 800 thousand of them are affected by any kind of flight disruption or baggage mishandling. It’s also worth mentioning that the average compensation we got for our customers in 2015 was €320. There are also projections that air travel industry should double in next 20 years.

Your team is growing quickly. What do you see as your biggest challenge as a company in the near term? What keeps you up at night right now?

A: Extremely quickly! If everything goes well and in line with our plans, we should have more than 100 employees by the end of 2016, which is the thing that actually keeps me up at night these days. Have I mentioned that we are hiring? (laughs)



What kind of people are you looking for?

Anybody who speaks fluent English, has a passion to learn new things from the aviation industry and is willing to use the latest technology is more than welcome to reach out. We are currently based in Prague, but our goals are far beyond the borders of the local market. If any of your readers want to be a part of an international startup environment with a vision and strategy to create something big, I can’t wait to meet them.

Where do you plan for ClaimAir to be, as a company, in 5 years time? What will be your mission then?

We’re still an early stage startup so I primarily hope that we will still exist in 5 years. (laugh) But anyway, I have a clear vision of a perfectly seamless process of customer care that I would love to bring into life.

I would really like to have our service integrated with various travel solutions, so every time your flight goes wrong, we would automatically notify you about important facts and we would get you money without any intervention from your side. In other words, we would like to solve your traveling troubles in real time so you can feel secure, and as a bonus, the compensation will be automatically credited to your bank account.

Have any of the StartupYard mentors had an especially powerful impact on your trajectory as a company? How so?

jakub ladra, Claimair

Jakub talks with other 2016 founders at a StartupYard workshop


Not only mentors but all StartupYard team members, including you Lloyd, are extremely supportive and dedicated. I can’t thank you enough for allowing us to be here and for supporting our goals. I am sure that we wouldn’t make such a progress in just a few weeks otherwise. We’ve met more than 70 extremely experienced mentors yet and sorry, I can’t mention anyone in particular because I value all of them the same. They are busy professionals and they give us their precious free time to move our businesses forward. We got numerous valuable insights into our business as well as several important introductions to our potential business partners. I’d definitely recommend other early stage startups to do their best to make it into the next StartupYard’s batch.

This space has some active players already. Why is there room for ClaimAir in this market?

Of course, but I always find competitors as an important part of every industry. Their presence confirms that our business is viable and they also help us educate and evangelize the market. Why is there room for us? Remember the figures? 9 million travelers are transported by air every day. Moreover, we are the only ones who deal with baggage-related issues and I hope that our focus on a technology will quickly make us one of leading players.

Are you looking to raise investment right now?

Yes. In order to carry out our business plan, we are looking for an initial €300k investment.

Satismeter: Meet the Founders

SatisMeter is perfect for online businesses that lack qualitative feedback from their users.
It’s an in-app feedback platform, that collects NPS data based on specific usage patterns. Unlike a traditional email survey or various in-house solutions, SatisMeter is an easy to integrate, multi-platform solution, perfect for small startups with only a few customers, all the way up to enterprise scale clients.

Satismeter’s current customers include BuzzSumo,  Udacity, Mention, Adroll, Dashlane,and MailJet. I sat down with the founders, brothers Jakub and Ondrej Sedlacek, to talk about Satismeter, and their unique team.

 

The Satismeter Brothers

The Satismeter Brothers, Jakub (left) and Ondrej (right)

You two are not only Co-Founders at SatisMeter, but brothers. Have you always worked well together, or was that a later development? Is it an advantage to work with a sibling as a co-founder?

Ondrej: Before SatisMeter neither of us thought our professional paths would ever meet.
Even though we are brothers, we are quite different.
Jakub is a technical person and a product guy with experience of leading GoodData front-end engineering for five years. I, on the other hand, am a sociable person with a background in IT sales, marketing and NGO fundraising.
Jakub: Being brothers has a great advantage, in that we know each other well and we can rely on each other in good and bad times. We share the same values and because we have different expertise we complement each other well.

Tell us a bit about how you came up with SatisMeter.

Jakub: I worked in the [Czech founded and Prague and San Francisco based] analytics company GoodData before and we struggled with the direction of our product and keeping focus on what our customers need. We started collecting customer feedback and it helped us tremendously with further product development. I was surprised there was no such service that would help automate the whole process. That’s where the idea for SatisMeter came from.

How can SatisMeter be used to improve how SaaS companies develop new features or improve retention of existing customers?

Jakub:  SaaS companies live off of customer subscriptions. They need to keep their customers as long as they possibly can. SatisMeter can be viewed as a churn reduction tool. We identify unsatisfied customers, and let SaaS companies work with these customers before they leave for the competition.

Ondrej: Also, most online businesses do not get enough user feedback. They optimize the whole user experience and new features based on analysing the behavior of users, but know very little about the actual needs behind this behaviour.
SatisMeter gathers this feedback directly inside web apps and shares it back to the right people in the organisation. Unlike most in-house solutions, SatisMeter can send the feedback not only to Support, but also to CRM, Analytics and Marketing tools, as well as other communication channels like Slack. This way the feedback doesn’t stay trapped in some helpdesk database, and the whole organization can see what their customers think.

You signed some very prominent clients pretty quickly, like Buzzsumo, MailJet, Mention, and AdRoll. What do you think got you this early traction?

Jakub:  We made the service very easy to start with and let the users see the value immediately. Also, unlike many surveys on the market, we really care about the experience of the end-user – Satismeter doesn’t block them from working and let them fill in our pop-up when they have time for it. This is why Satismeter has a 30% response rates on average.
Ondrej: Our first users came from partnership with customer data hub Segment.com. For example Mention’s Head of Growth found us on the Segment marketplace, and build their churn reduction process around our NPS platform. Later he even wrote a blogpost about this process, and the word of mouth started spreading. Satismeter have also been featured on ProductHunt, which helped as well.

Do you want to help Satismeter on their journey to the top? Click Below to Tweet about them now.

Have you seen any unexpected uses of SatisMeter since you launched? Something that surprised you?

Jakub: When we launched, we saw SatisMeter as a tool for Product Managers to help them build a product their customers need. It surprised us that most people interested in SatisMeter were marketers and growth hackers who wanted to optimize their growth metrics. We unlocked many creative uses by integrating with other platforms and letting our customers work with the collected data. We already took a lot these ideas and implemented them right into SatisMeter.

What’s the short term plan for Satismeter? Where do you want to be in 6 months to a year?

Ondrej: There are four areas where Satismeter will focus: new platforms, new markets, better understanding of user feedback and actionable advice. We want to cover all platforms where users are communicating with businesses and our mobile survey will be launched in March. We are working with several communication platforms to collect user feedback for their customers. Some of our customers collect tens of thousands of responses a month and we would like to give insight not only whether their users are satisfied, but why. Also we already know how to identify the customers with higher churn risk. We want to advise on how to work with them right inside SatisMeter.

Which players do you view as your biggest potential competitors in this market, and why?

Jakub: At the moment our biggest competition are companies that are collecting NPS using email surveys. A surprisingly large number of companies are still using email surveys, although it’s much less efficient than an in-app solution. There are also many platforms that are doing really nice survey widgets, but don’t work very well with the collected data. Satismeter is trying to focus on an easy to use solution that will help companies to dramatically improve customer retention.

Can you tell us some of the most common mistakes that SaaS companies make when surveying their customers?

Jakub: Common mistake is that they just survey users and don’t follow-up with them. It’s a great way to engage with your happy customers and opportunity to proactively resolve issues of the unhappy ones.

What are some of the most common misconceptions about how NPS is used, and how it works?

Ondrej: The most common misconception people make is to look at NPS score and ask “What does this number mean to my business”. The NPS score alone is an indicator of how satisfied and loyal your customers are, but every business segment, every culture and every country has different perceptions and thus different benchmarks. The right way is to watch the NPS trend, correlate it with product and service changes, and decide how these changes influenced your customers’ satisfaction.
Jakub: NPS can be also used in many other ways to improve your business, for example as tool for better conversion of trial users into paying customers, or a way for better targeted marketing campaigns.

Has StartupYard been a positive experience so far for the team? How has it affected your overall approach to the company so far?

Jakub: StartupYard is a combination of connections, knowledge and experience. This is invaluable for first-time entrepreneurs like us. The first month was intense but Satismeter moved miles ahead in vision of our product and company. We are really excited to see what’s coming next.

Introducing the StartupYard 2016 Startups

StartupYard 2016 has been underway for just over a month now. So it’s time to make it official. After an exhaustive application process, and over a month of mentoring, StartupYard is proud to announce 9 new startups, who will present themselves at StartupYard 2016’s Demo Day, on April 6th.

Satismeter: Know Your Customers

imgres

Czech Republic

SatisMeter is perfect for online businesses that lack qualitative feedback from their users.
It’s an in-app feedback platform, that collects NPS data based on specific usage patterns. Unlike a traditional email survey or various in-house solutions, SatisMeter is an easy to integrate, multi-platform solution, perfect for small startups with only a few customers, all the way up to enterprise scale clients.

Satismeter’s current customers include BuzzSumo,  Udacity, Mention, Adroll, Dashlane, and MailJet

 

ClaimAir: Know Your Rights. Get Paid.

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Czech Republic

ClaimAir helps travelers fight the airlines for compensation, because fliers don’t have the time and resources to do it themselves.
It’s is an automated platform that handles the end-to-end process of claiming owed compensation for delays, baggage mishandling, etc. Did you know that the average compensation owed was over 300 Euros?
Unlike travel agencies, ClaimAir is specialized in handling legal compensation claims in large volumes.

 

Neuron Software: Making Sense of Sound

NeuronSW_finalfor-web-01

Czech Republic

Neuron Software is a deep tech startup, exploring the use of self-teaching, constantly learning neural networks in a wide range of audio analysis and audio manipulation applications.
Imagine having a car mechanic in your pocket, able to diagnose a problem just by listening to it. Or being able to accurately document the emotions of your customers, every time anyone from your company talks to them.
Neuron Software’s technology will enable a broad range of new capabilities that are just starting to be explored.

 

Stream.Plus: The Last Video Platform You’ll Ever Need

stream_plus_logo-05_720

Czech Republic

Stream.Plus is the future of branded video distribution. Brands who have quality video content often lack control over the distribution and monetization of that content. Stream.Plus creates mobile and web apps for branded, interactive online TV channels that create a direct connection between consumers and brands.

 

NeuronAd: Ads for Everyone

neuron-ad-logo-final-_color_bw_wb_

Czech Republic

Online publishers rely heavily on advertising for revenue. But 20% or more of internet users now have adblockers installed. NeuronAd helps online publishers show relevant, unobtrusive ads to adblocked visitors, while maintaining the speed, security, and experience that led those visitors to employ adblockers.

 

Speedifly: When in Doubt, Travel

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Bulgaria

SpeediFly is for spontaneous travelers who want to get away last minute, but don’t know where they can go on a budget.
It’s a mobile travel discovery platform that locates the customer and finds the 15 cheapest flights departing from and returning to the nearest airport in the next 10 days. Unlike clunky old-fashioned search engines, SpeediFly combines social dimensions like group travel planning, with the ability to discover destinations based on activities and interests.

 

TotemInteractive: Make Ads People Love

toteminteractive-icon-square

Poland

TotemInteractive enables Digital Out of Home Advertising to become more than just a one-way brand-to-customer ad channel.
It’s a cloud based advertising platform that supports interactive content, like games and contests, by allowing people to control ads directly from their smartphones.
Drive real audience engagement with your live ads, by making ads people love, and love to play with.

 

Salutara: Your Health Matters

Salutara, Startupyard

Czech Republic

Salutara is a full-service online platform for medical travel. Every year, 11 Million people seek medical procedures that are not accessible or affordable in their home countries. With Salutara as a trusted advisor and intermediary, patients can search and compare clinics, arrange procedures, plan, book, and pay for a whole trip in one place. Travel for your health, with Salutara.

 

boatify: hop onboard (a boat!)

boatify

Switzerland

Boatify is for people who want to go on a boat ride, but don’t have easy and affordable access to a boat. It’s a web and mobile platform, where boat owners can earn money renting their boats directly.
Unlike typical boat rental services, boatify relies on a network of partner “officers,” who take responsibility for the end-to-end customer experience of each boat rental, making it a snap to safely rent and take a trip in a boat near you, anytime.

 

The Teams

partnerships

Build Real Partnerships as a Startup

Building real partnerships with the right companies is something we emphasize in the StartupYard program. But what is a “real partnership” are all about? Many startups aren’t too sure.

Partnerships and “Partnerships”

A startup in our 2016 cohort approached me this week, with a simple-sounding problem. Could they prioritize a meeting over StartupYard mentoring sessions, if the person couldn’t meet at a time when mentors weren’t here?

Yes, they could if it is was really important. But what was the meeting about?

The meeting was about a potential “partnership,” with the CEO of a company that provided a key piece of technology that this startup was going to need. This was not a huge company, which is why the founders got a meeting with the CEO. But it wasn’t a startup either.

What did they want to get out of the meeting?

“Well, we’re hoping that he will be willing to let us use it for free or for a discount.”

And why would he do that?

“Because we’re a startup.”

Partnerships in Name Only

In a way, startups have become trained to expect this kind of thing from bigger companies. They assume that companies are willing to sponsor them just because they’re a startup, and they’re not always wrong. Many of StartupYard’s partners do give an amazing value in services to startups for free.

But those are our partners. While we have real, and thriving partnerships with some of these companies, this is not because we get free stuff. It’s because our organizations share complementary goals. In this case, it’s getting early access to the best startups in Central Europe, and helping them grow (us as investors, our partners as future providers of a paid service).

But this level of partnership, which looks more like sponsorship than a real relationship between equals, is probably not what many smaller corporates and other startups have in mind when they agree to meet a startup.

Based in Mutual Interest

It’s very easy to agree to partnerships that don’t require a lot of work or follow through. So it’s tempting to do this whenever possible. Many partnerships boil down to two companies putting their logos on each other’s websites.

This happens because in the course of exploring a partnership, one or both of these companies comes to realize that they don’t share a real mutual interest.

This is why it’s so important to pursue partnerships in the same way you pursue your sales goals. Partnerships are a part of your sales strategy.

Partners should have the same sorts of customers you have, but not be directly competing with your offering. Ideally, your partnerships should make the offering of both companies stronger, so that a customer who uses one, gets even more value from using the other.

At the core, a business partnership is about both sides developing their indirect sales channels, sharing, and better serving your mutual clients. It is a force multiplier for sales, because in a true partnership, much of the sales activities that the two companies undertake support the sales funnels of both companies.

This finds its most pure form in online affiliate partnerships, which is essentially an “automated partnership.” But that is only one form of partnership. You can base your partnership on sharing know-how and technology, but ultimately a partnership that lasts is one that makes the two companies interdependent, and stronger as a result, and that means both companies having a stake in the same pool of clients.

What A Company Needs to Be a Good Partner

Again, agreeing to a partnership is relatively easy in theory. It doesn’t take all that much. But in order to be a good partner, a company needs to have a team (or at least one person), dedicated to building and maintaining partnerships.

SendGrid, a StartupYard partner, is a great example of this. Instead of sponsoring accelerators and events directly, they have a dedicated innovation team that travels around the world, meeting with and advising startups and accelerators on issues involving transactional and marketing email infrastructure.

Every company they meet with gets at least a year’s worth of service with SendGrid for free, which is an enormous value for startups. And for StartupYard, it’s of great value to have a skilled and knowledgeable mentor team visit and do a workshop with our startups too. That builds the value of the accelerator and gives our startups a greater chance of success down the road. Meanwhile, SendGrid gets access to potential clients who could be worth thousands of Euros a month in a few short years. Win, Win, WIn.

Companies that have strong partnership programs also know what to look for from startups, which isn’t always just another client. They may be interested in sharing data, or even investing in certain kinds of companies.

A good partnership manager bridges a gap between sales and marketing, and has the pull necessary to bring your company to the attention of executives, even as a prelude to an acquisition, or sharing clients. They aren’t incentivized the way a salesperson is, so they’re more flexible about what they’re willing to bring to the table- it’s not about the bottom line for that person, which frees them up to explore other ways of seeking mutual benefit.

Preparing For a Partnership

One of the key mistakes that startups make when they approach partners, aside from the “gimme gimme” attitude described above, is by trying to “sell” them. A partner isn’t necessarily a customer, and you can’t approach them in the same way. You have to sell them on the mutual benefit of working together, and on your ability to do that; not on your ability to sell your product to their clients.

A good partner in indirect sales offers a few things. One is added value for shared clients, and another is defense against competitors. If you can make a partner’s offering to its clients stronger than its competitors, and if your partners (and competitors) know this, they will be willing to work hard to keep you as a partner, rather than see you support someone else’s sales pipeline.

So when you meet with partners, you need to ask questions. What do your customers need that you can’t provide? Why do customers choose competitors over you? What would make more of your clients stay with you? These can all open up opportunities for you to partner with that company, and those opportunities will be based on what that company needs, not only on what you need from them.

mentors engaged with founders

How Smart Startups Keep Mentors Engaged

The smartest startups keep mentors engaged as much as possible. With our next cohort set to kick off their 3-month stay with us next week, we’d like to share some tips on how to do just that.

Why You Need Engaged Mentors

It should hopefully come as no surprise to our startups that they will be getting advice from some of the very best business minds in Central Europe, and around the world. But that advice is only so valuable. A startup team’s ability to execute on every piece of advice they receive, particularly during an accelerator program, is limited. A person only has so much bandwidth, and the scheduling demands that the program imposes, leaves little time for reflection.

A typical comment we get from founders, around the end of the mentoring period, is “I keep hearing the same thing… I just want to fix it now!”

That’s ok. Part of the value of the mentoring period, in the first month of the program, is “shock and awe.” It is a trial by fire for a startup’s ideas, and for their ability to communicate those ideas clearly. It’s meant to shake them up, and wear down their bad habits, eliminating any lazy or wishful thinking.

To some extent, startups do long to go back into “builder mode,” and focus solely on executing all the advice they’ve been given. And they do usually still have a lot of building to do. But one common mistake; something we see every single year, is that startups will treat mentors as the source of individual ideas or advice, but not as a wellspring of continuing support.

I can’t say how many times great mentors, who have had big impacts on the teams they have worked with, have come to me asking for updates about those teams. These mentors would probably be flattered to hear what an effect they’ve had on their favorite startups, but the startups often don’t tell them. And the mentors, not knowing whether they’ve been listened to, don’t press the issue either.

And so time and again, mentors who are ready to offer support, further contacts, and more, are simply left with the impression that the startup isn’t doing anything, much less anything they recommended or hoped the startup would try.

Mentors who aren’t engaged with a startup’s activities won’t mention them to colleagues and friends. They won’t brag about progress they don’t know about, and they won’t think of the startup the next time they meet someone who would be an interesting contact for the founders.

How to Keep Mentors Engaged

This isn’t terribly complicated stuff. Many startupers fear at first that “spamming” or “networking,” is the act of the desperate and the unloved. If their ideas are brilliant and their products genius, then surely success will simply find them. Alas, it doesn’t work that way at all. Our mentors, along with investors and partners, usually appreciate “hustle,” or the appearance that startups are making a special effort to maintain contact, and further relationships.

As always, there are a few simple best practices to follow.

A Mentor Newsletter

Two of StartupYard’s best Alumni, Gjirafa and TeskaLabs, provide regular “Mentor Update” newsletters. These letters can follow a few different formats, but the important things are these: be consistent in format, and update regularly. Ales Teska, TeskaLab’s founder, sends a weekly update to all mentors and advisors.

In the email, he has 4 major sections. Here they are with explanations of the purpose of each:

Introduction

Here you give a personal account of how things are going. You can mention personal news, or news about the team, offices, team activities, and other minutiae. This is a good place to tell small stories that may be interesting to your mentors, and will help them to feel they know you better. Did a member of the team become a parent? Tell it here. Did you travel to Dubai on business? Give a quick account of the trip.

Ask

This is one section which I love about Ales’s emails. I always scroll down to the “ask” section, and read it right away. Here, Ales comes up with a new request for his mentors every single week. It can be something simple like: “we really need a good coffee provider for the office,” to something bigger, like “we are looking for an allstar security-focused salesman with 10 years experience.” Whatever it is, he engages his mentors to answer the questions they know, by replying directly to the email. This way, he can gauge who is reading the emails, and he can very quickly get great answers to important questions or requests.

Wins

Here, Ales usually shares any good news he has about the company. This section is invaluable, because it reminds mentors that the company is moving forward, and making gains. A win can be anything positive. You can say that a win was hiring a great new developer, or finally getting the perfect offices. Or it can be an investment or a new client contact. These show mentors that you are working hard, and that you are making progress and experiencing some form of traction. You’d be surprised how many mentors simply assume that a startup that isn’t talking about any successes, must have already failed.

KPIs

Here Ales shares a consistent set of Key Performance Indicators. In his case, it is about the company’s sales pipeline, but for other companies, it might be slightly different items, such as “time on site,” or “number of daily logins,” or “mentions in media.” Whatever KPIs are most important to your growth as a company, these should be shared proactively with your mentors.

If the news isn’t positive, then explain why. You can also have a little fun with this, and include silly KPIs like: “pizza consumed,” or “bugs found.” This exercise shows mentors that you are keeping track of what is important, and gives them a reliable and repeatable overview of what you’re experiencing in any given week.

Don’t Be Alone

We find this mentor email to be such an important practice, that we will be recommending its use to all of our startups going forward. Ales Teska agrees, and told me that the email had already led to some big wins for TeskaLabs. Not bad for 10 minutes of work a week.

But more importantly, whether you regularly update mentors or not, don’t waste the opportunity that StartupYard provides in making connections. If a mentor doesn’t reach out to you, reach out to them. If you can’t think of anything to say to them, just find something to ask them. The key is: talk to them, and don’t let them fall out of your orbit. The mentors and advisors you have interested in you, the greater your chances that a breakthrough will come when you need it most.

mentors engaged with founders

Dealing with Mentor WhipLash

Startups in any mentorship-based accelerator program should, obviously, meet a lot of mentors, investors, and advisors over the course of the program. Even outside of an accelerator program, early-stage startups tend to seek a lot of advice, and should try to meet with and listen to a broad range of people with different opinions.

Hard Questions

Something that we notice happening with our startups toward the end of StartupYard’s “mentor month,” is that founders start to get a bit tired of meeting with new people. This is, overall, a good sign. Frustration with mentorship means that they are starting to notice a consistent theme in the feedback they are getting, and they are probably ready to start executing on the feedback they’ve received so far.

This is why we do virtually all of our mentoring in such a compressed period of time. And It is time consuming. Every startup we’ve accelerated has given us the same feedback: “this is really taking a lot of time and energy!” It does, but if it’s used effectively, it will be worth it.

Common objections to a startup’s idea, to its plans, to its approach and view of the market, tend to become quite obvious when a founder hears them many times in quick succession. A period of organized mentoring can allow a founder to develop strategies for answering the most common objections, and it can reveal objections to which their answers aren’t good enough yet.

If you aren’t tired of mentoring, you haven’t done it enough.

The best startup mentors are not necessarily those who just give startups clear instructions on what to do next. The best mentors ask the hardest questions. “How do you know that?” “What proof do you have for this assumption?” Good, searching questions can reveal to founders how weak the foundations of their thinking can at times be. When startup founders tend to rest their hopes on these assumptions, good mentors seek to poke holes in the theory of a startup, in order to make it stronger.

As mentoring goes on, there are fewer “ahah” moments for founders, and it becomes easier for them to answer tough questions that insightful mentors bring up. They start to be better at handling common objections, and identifying objections that do really demand more work on their part. They start, in short, to grow a pretty thick skin for new feedback, and they become less questioning of themselves, and more questioning of the mentors.

I can spot founders who have had good mentors by the way they deal with my questions: they’ve heard them all before, and they have answers that make sense, and that don’t ignore the question, or attempt to change the subject. They don’t dismiss the objections: they answer them convincingly and easily.

That growing confidence is double edged of course– too much mentoring can make founders immune to hearing new ideas over time– but just as importantly, it can make them more immune to what prominent VC Fred Wilson calls “mentor whiplash.”

Mentor Whiplash

Every startup has at least a handful of these experiences in our program, and in every accelerator program in the world. Mentors often leap to radically different conclusions, and offer radically different advice to startups.

When one expert tells you that you absolutely have to do X, and another equally experienced mentor tells you that Y is absolutely, without a doubt, the way to go, and X and Y are mutually exclusive, what do you do? You may not know who to believe at this point.

The fault isn’t with the mentors. Mentoring can be difficult for both sides of the equation. I sometimes feel like my advice roles off startups like water off a duck’s back. It takes a long time, and a lot of effort, to make certain ideas stick. So I become quite forceful with my opinion. That’s a natural tendency for a mentor to have. Suggestions become commandments to be followed.

What startup founders learn over time, is that clearly two mentors with opposing views can’t both be right, but that both mentors may not necessarily be wrong. In the aggregate, over many sessions with many different people, a path will emerge. The founder’s job is to synthesize all that input into a plan that makes sense.

There will always be smart people who don’t buy your ideas, or who think you’re doing everything wrong. But if there were someone who knew exactly what you should do in all circumstances, then that person would surely be the richest person who ever lived.

Sounds Smart Vs. Is Smart

Really engaged mentors and advisors get to be fans of their chosen startups. We root for them, and we start thinking we know what’s best for them all the time.

Like being a fan of a sports team: it’s all the feeling of accomplishment, without having balls kicked at them at high speed.

It’s easy to spend 30 minutes with a startup, and give them the impression that you know your stuff. It’s much, much harder to do the work that startups do, which involves making something out of nothing. Mentors are domain experts, but not always startup founders themselves. They know their domains and they know their own jobs, but they won’t really appreciate the responsibilities of the person sitting across from them. How could they?

Sounding smart takes only experience. You can make an idea sound appealing if you know how to sell it. But being smart involves trial and error. An idea isn’t smart until it actually works, and this is largely in the execution, which can change over time. The work always ends up being worth more than the inspiration.

Keep Your Compass On You

We work hard to make sure our investor mentors aren’t seagulls (the kind who shit on an idea to make themselves feel more important, and then fly off). And we also work to make sure our mentors are focused on the needs of startups, rather than the needs of ego.

But one inherent danger, especially in a formalized mentorship setting, is that mentors never have the same motivations as startups. They can try to put themselves in the place of the founders, and sympathize with their experiences. The best mentors do this well, and continue to do it long after the first meeting.

However, mentors have things that they also believe in, and a way of seeing the world that they don’t necessarily share with a startup founder. Mentors can push a startup to think about things from their own perspective, which is fine, but they can also forget that their perspective is unique to them.

If a mentor is a VC, they may complain to a startup that they aren’t thinking big enough. If the mentor is a marketer, they may push the startup to think in terms of their own experiences.

This is all necessary input for startups, if they keep in mind that mentors speak for themselves, and about themselves, as much as they do about the startups they are counseling. A mentor has to dig into their own history, to offer startups the benefit of their experience. It is still the founder’s job to make sense of that experience for themselves.

A mentor’s experience and their opinion are separate things, which is important to remember. A mentor may have failed at what a founder is trying to do, or may have seen others fail. The founder can learn from that experience without heeding all the mentor’s advice; advice like: “don’t do it, it won’t work!”

Make A Mentorship Map

Effective mentors accelerate the growth of your ideas, but also, just as importantly, the growth of your personal network. They can give you contacts and directions to explore, and it becomes a complex undertaking to follow up on and use all the input and contacts you get.

One of the single biggest failings that early stage startups have, is that they don’t adequately follow up on the contacts offered to them by mentors. Every startup is guilty of that to a degree, which is unavoidable. Still, our most successful startups have been those who have pursued contacts relentlessly, both during and after our program.

Fred Wilson recommends that startups keep a feedback spreadsheet for input and contacts from mentors. That’s sound advice, and it’s something we require our startups to do. But I would also suggest a slightly more creative approach, that might work better for startups who are getting a lot of mentor whiplash: a mind map for feedback.

Your mindmap might look very different from this one, but here’s a possible example using MindMeister.com:

Mindmap General

You could go into much more depth, and create a mindmap for each general category, employing each one for each different type of mentor, with a mindmap for Marketing, another for Investment, one for partnerships, etc. Or you could create a mindmap for each mentor individually.

It takes a bit of time to get used to mindmapping, but it’s a good skill to have when you need to have a reliable way of processing a lot of input from many different sources. Over time, you can customize your map to show your own priorities and the frequency of certain types of feedback as well.

8 Reasons Not to Join an Accelerator

Yes, yes. We’re always trying to convince people that accelerators are generally a good idea. And they are, for a lot of you out there. But not for all of you.

Here are 8 reasons not to join an accelerator. If any of these speak to you, consider very carefully whether going to one won’t be a frustrating waste of your time and energy.

1. You Need the Money

Time and again, we meet with startups who only have questions about the money and terms we offer to startups. If you’re joining an accelerator for the money it provides, think twice.

First of all, it isn’t a lot of money, really. 30,000 Euros might seem like a lot  -older accelerators like Y-C give up to $120,000- and more in follow on financing. But if your idea is really workable as a business, you can find that money somewhere else. And when you do, it’s likely you wouldn’t have to give up a sizable stake in your company for it.

The money-for-equity equation doesn’t make sense by itself, but the accelerator model makes sense when you look at the results. StartupYard companies are at least 3 times more likely to survive their first year than companies who don’t join an accelerator, and our vested interest is in every one of our companies becoming a success, and fetching a high priced exit. The funding we provide couldn’t accomplish this. It would be a poor investment. But the connections, guidance, and support we provide can make the difference between a company falling off the map in a year or two, or getting seriously funded, and having a shot at real success.

2. An Accelerator Means Instant Growth and Recognition

Sorry, it won’t work that way. DropBox, Twitch, Stripe, AirBnB, Softlayer, and SendGrid (all companies that went through accelerators), did not become successes just because they were in accelerators. Quite the opposite: these companies made Y-Combinator and TechStars famous.

No, they became successes because they had dedicated founders who made the right decisions and just as importantly, worked hard. We can’t make you work hard, but we can help you make the right decisions, and forge important connections. That’s it. It’s hardly rocket science (though some of our alums are rocket scientists).

Every startup, to some degree, has to be in the right place at the right time. An accelerator can help you be in that right place, and help you determine whether it is the right time. We can be a firewall against your worst impulses, but we cannot do any of it for you. If you expect that an accelerator will make you famous and win you funding, don’t be so sure. You’ll be the one doing the work.

3. You’re a Solo Act

You’re a lone wolf, who plays by her own rules. You don’t need a co-founder, because that person would just get in your way. The glory will be yours alone.

That’s all fine, except we’re not interested. A single founder can become a bottleneck for new ideas and input. He or she can also become a blocker for needed action. A single person with too much control over a startup will find it easier and more tempting to resist doubts, and to avoid stopping to reconsider strategy. Beyond that, a single founder usually just can’t handle all the demands of attending an accelerator and running a company at the same time.

Anybody who has ever watched a police drama knows the dynamic. A partner is somebody who can play good cop to your bad cop, and can back you up when you’re in trouble. They’re someone who can tell you you’re crazy, or can confirm that you’re really onto something. Nobody wants to approach a lone wolf, so get a partner you can trust.

4. Your Ideas Are Perfect

You don’t tolerate criticism. Why should you? You’ve been successful all your life, and this situation is no different. You will just make your company work, no matter what, doing what you had it in mind to do.

My advice is, go for it. If it’s a perfect idea, then it really will all work out without you having to question it. But if you’re coming to an accelerator thinking that even the basic idea behind your company can’t change, then don’t come. Stay home.

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Accelerators are for failure as much as they are for success. Better to fail early on, and in a controlled way, than to build an empire on sand. We will push you to falsify all your notions of what will work, and what won’t. Most startups discover basic, critical flaws in their concepts while attending our program, which is exactly when they should discover them.

5. You’re a Tourist

Like a weekend wine-taster in Napa (or maybe Moravia), you’re just dipping your toes in the water to see what this whole startup thing is about. You’re not about to buy a winery and start mashing your own grapes, unless somebody can convince you it’s a good idea.

We don’t have the energy or the heart to sell your own startup to you. If you’re not sure it’s something you want to dedicate your life to working on for at least several years, then don’t join an accelerator. You’ll save everyone, yourself included, a lot of grief.

On the same token, don’t join an accelerator expecting to pick and choose what you’ll get out of it. “I just need the mentors, I don’t need the workshops.” I can’t say how many times I’ve heard words to this effect. And yet, these are usually the founders who need our input the most. But if a founder isn’t open minded and open hearted, there isn’t much we can do to change that.

6. You’re Not a Startup

That sounds a bit silly, but it’s a real thing. Part of the problem is something we’ve discussed a lot, which is that tech companies today seem to think they have to be “startups.”

Startups are companies that need to scale quickly in order to survive. They are companies that are innovating a new technology or business idea or process that hasn’t been tried before in just that way.

But every year, we get applications from game companies, digital agencies, and e-commerce providers who want to tap into the “startup mojo,” and experience hyper growth without having a hyper-growth product.

The line between a traditional business and a startup can be unclear at times- sometimes their products do essentially the same things, but in radically different ways. Make sure your path forward involves rapid growth, and global reach, and that it isn’t, in the parlance of Y-Combinator, a “lifestyle business,” set up to make a small profit over many years of steady business.

7. You’re Looking to Cash Out

Your results may differ.

I wouldn’t compare running a startup to gambling, but there is one parallel that is inescapable. When you go to a casino, the best practice is to give yourself a limit, and expect to lose all the money you’ve committed to gambling. If that’s an amount of money you’d be comfortable simply setting on fire and walking away, then it’s ok to play a little blackjack. Otherwise, don’t play.

So it has to be with running a startup. If you’re not comfortable with existential risks to your business, then you should probably be in a different field. And if you’re drawn to running a startup because you know that some startups get large payouts in the form of acquisitions, then it’s unlikely that you also have enough affinity for the idea behind your startup, to stick with it even when things look bad. And they will, at some point, look bad.

8. You Want to Be Famous

Let us not dwell on this. Just, no.

Central Europe Accelerator

One Month Left To Apply to StartupYard

The cutoff for applications to StartupYard 2016 is now less than a month away, on November 11th.

Over the past few months, StartupYard director Cedric Maloux and I have travelled all around Central Europe, meeting startups and entrepreneurs eager to take the next step, and accelerate their businesses. It’s been quite a ride so far, that’s taken us to 6 cities, where we’ve met scores of people with talent, energy, and great ideas.

What Are We Looking For?

Why do we do all this work to reach out to startups? Finding a gem among hundreds of new and untested ideas is a tricky business. We never know what the next big idea is going to be. If we did, we wouldn’t be running an accelerator!

We are looking for startups who can convince us that their idea may just be the next big idea in the areas of Mobile, Data, Anaytics, and IOT.

We are looking for talented engineers, but also dedicated and tireless advocates for a new way of doing business, a new way of thinking about an old problem, or even something entirely new and untested.

Above all, we are looking for teams that we can believe in, and who are ready to use our knowledge, connections, and experience to grow on a global scale.

Demo Day

Why You Should Apply to StartupYard

You shouldn’t think of StartupYard as a menu of things you’ll get when you join.

Of course, we provide 30,000 Euros in funding, and up to 250,000 Euros in follow on financing. We also provide over 500,000 Euros in perks exclusive to members of GAN, the global accelerator network. We also provide workspace, resources, training, and our extensive business network. And who could forget the pizza? We hope you like pizza.

But we are not looking for startups that view us as a source of funding, or a stepping stone they are obligated to use. An accelerator is not a box you need to check off your startup to-do list. At least StartupYard isn’t.

We cannot do anything for a startup that it is not willing to do for itself. But what we can do, is put a startup in the best possible position to succeed. We can’t create relationships for you, but we can provide connections to an unbeatable network of mentors and investors, and the context for building relationships and building trust.

We can facilitate, encourage, and act as a safety net and a sounding board for startups that are willing to take leaps of faith and of imagination. We can push startups -and provide them with the right tools- to improve their communication abilities, refine their business models, sharpen their customer focus, and hone their pitching skills until they can speak convincingly about their ideas in their sleep.

In short, we can be there every day with startups, making sure they have no excuses for failure.

We are often asked what our relationship to our startups is. Are we investors? Are we teachers? Are we consultants? None of these descriptions is right.

We are partners in the plainest sense. We neither lead nor follow, and we don’t profit from our startups until they are successful in the real world. Our interest lies entirely in helping you to succeed, and we accompany our startups on every step toward becoming a real, thriving business.

In short, we live and die with you.

StartupYard’s Viktor Fischer on Quitting Your Job, and Overcoming Fear

Hi Viktor. You’ve had a really interesting career, co-founding Innovatrics a decade ago, and most recently becoming a junior partner with McKinsey and Company. Can you tell us your personal story as an entrepreneur?

Hi Lloyd – sure, thanks for having me.

When we founded Innovatrics in 2004, I had no clue how to build a business. We created a software development kit around a fingerprint algorithm, put it online and waited to see who would buy it. When after 2 weeks no-one replied, we started to think about who might be the customer, what were their needs, what was the right product, what was the right pricing, and how we would sell it.

Early on we copied competition (copying is good), and negotiated licensing deals with major biometrics players such as Bioscrypt and CrossMatch – to survive. Over the next several years we found our niche: high-speed AFIS (Automated Fingerprint Identification Systems), defined the target customer segment. We fine-tuned the pricing and focused on the most efficient marketing & sales channels. Last year Innovatrics won Deloitte Top 50 in 2014 for its 344% revenue growth and last week was designated IT firm of the year in Slovakia. I am congratulating the team for those fantastic achievements.

After 5 years at Innovatrics, I decided to pursue an international MBA to grow my network and then entered McKinsey. Surprisingly, although McKinsey works for corporates, it follows a very entrepreneurial way of working. Projects (called “engagements”) are delivered by small teams (2 to 3 people full-time supported by experts and senior leaders), who work by quick iterations with the end product in mind (similar to “scrum methodology”). There is flat hierarchy and even junior members are encouraged to disagree with the most senior partners.

Aside from consulting, you are also an active angel investor. How do you pick your investments?

I only have 3 criteria: First, would I be a user of that product, and would I be excited to use it? This is my way of validating the value proposition.

Second, I need to know the management team, and have them be introduced by a person I trust.

Third, I need to have the knowledge I can use to help the startup. In broader terms, anything commercial, and in narrower terms, anything related to defining value proposition, validating product/market fit, modeling financial plan, raising funds, orchestrating B2B sales, or expanding internationally.

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Fischer chats with fellow StartupYard mentor Ondrej Bartos at a StartupYard event

Have you ever broken one of those rules? If so, what was the result?

Yes, sometimes an edge in 1 or 2 criteria can balance-out the 3rd criteria. For example, recently I invested in MPower Financing via Angel.co. MPower provides loans to US university students coming from ethnic minorities.

Although I would not be a user of such a product, I like the mission of the company: I believe funding should not be a barrier to education. And I know the founders really really well (both CEO and CTO are my MBA classmates).

You recently left McKinsey to open your own club/bar, and focus on startups. What motivated the move? What will your club be like?

:Laughs: how much time do you have? I can talk for hours about this.

I think we do our best job when we do something we love (call it passion). There is one way that really worked for me to find that out: Think that tomorrow is the last day of your life. Really. Then imagine:  If that was the case, what would you truly like to do today?

My answers were: A) go for a drink to a nice place with friends, and B) help startups grow. So I left the corporate job and bought an old but legendary nightclub called Meloun. The idea is to create an ultra-lounge like we all miss here in Prague. An exclusive place with great drinks and great music for a fantastic night out. It will be kind of a secret place so I cannot say more about it at this stage – sorry!

To help the startups, I am becoming more engaged with the teams, helping where necessary depending on the stage of the company, and more engaged with the local entrepreneurship community (including Startupyard).

Can you tell us the story of your favorite investment, and, if you have one, your biggest investment mistake or failure?

I don’t have a favorite investment – all my startups, those I invest in or simply advise are like children – no one is preferred.

Failure? Probably those I decided to pass on (yes, I’m thinking Gjirafa), or those where I miss the team’s engagement. There is nothing more demotivating than a non-motivated team. There are two mindsets with which a company is created: either to be a lifestyle business, or to build a company changing the world. There is nothing wrong with either of those. But it needs to be clear from the beginning to the team, the investors and the advisors.

You are an active StartupYard mentor, and you hosted a workshop with us this year. What motivates you to work with startups in your free time?

My sole motivator is to help startups avoiding mistakes I made. Whether it is in their value proposition, defining a target customer, pricing structure, international expansion, or even personal work-life-balance and facilitating discussions between shareholders. I have scars on my back in all these areas. I want to help people avoid getting a divorce, arguing with business partners or putting thousands of work hours into a feature that is not needed.

Do you believe that successful Czech entrepreneurs like yourself are giving enough back to the startup ecosystem in terms of attention, mentoring, and investment?

First of all, I am Slovak. Just kidding, I miss Czechoslovakia and I believe the countries together could again reach the 10th place in industrial production they had in 1938 – although in different industries :laughs:.

It will not happen however without the government’s support. When founding Innovatrics, we received around 150 thousand Euro from the French government to get us up and running. Although there is a risk to receiving government funds (often startups use that funding to delay product introduction to the market), there is an improvement in Government funding: the Czech government spends ~2% on GPD on R&D and Slovak government spends ~1% on R&D versus the US ~3%.

I know I am not answering your question, but I don’t know yet whether local entrepreneurs are helping enough. I know some of them invest through [prominent venture firms] Credo and Rockaway, or directly, and they mentor via Startupyard. But I don’t have a benchmark. It would be great to compare for example the amount of Czech angel and VC funding to overall angel and VC investments in the UK, and US, but I don’t think there’s a clear benchmark.

What is a piece of advice you find yourself giving over and over again to startups? What is the hardest piece of advice for startups to really listen to?

Overcome fear. Often I see startup entrepreneurs doing what is easy: sitting behind a computer developing the next feature set.

Call a prospective buyer or an expert to get early feedback. Find an expert via LinkedIn. Send the deck or a link to the demo and set-up a call. There are plenty of people out there who would help you. Doing it you have nothing to lose. Not doing it, you lose the opportunity to score your first customer or a future team member.

Sometimes it feels  the hardest part for startups is to listen. Whether the founders are really able to listen, hear, reflect and incorporate the advice is what I am looking for during interviews.

Your career has been split between The Czech Republic, Slovakia, France, and recently Switzerland. How do you view the development of startup culture and investments in these different regions in recent years?

I cannot compare yet. But what I really like about the investment culture in other countries is the humility with which the investors and advisors help the entrepreneur. An entrepreneur is the shit, and our only mission is to help her succeed while increasing her self-confidence. Not the other way around (ie beat her idea and her self-confidence to death).

Are there things that bigger economies like France could learn from the startup and investing cultures in Slovakia or the Czech Republic?

I like how some of the local VCs really help the entrepreneurs think about the business during the investment process. They help to define and validate the value proposition, set up pricing, create financial model, key KPIs and develop a first 100-day plan. This process is beneficial to both parties and if I were the entrepreneur, I would embrace it fully.

Andrej Kiska recently told me in an interview that Czech (or Central European) investors are not as conservative as their reputations suggest. Do you agree with him?

I agree that the mindset is changing. That’s good. From my experience however, even as recently as the Webexpo couple of weeks ago, I noticed some investors using traction as their investment criteria (quote “For us to invest, you need to have customers. At least one.”) I think people should be the first criteria of choice and overseas that is understood.

What about StartupYard makes you keep coming back? How do you hope to have an impact on us as and our program?

This comes to my 2nd passion: helping startups grow. StartupYard is the largest local accelerator. Still however, some people do not know it. David Semerad from STRV mentioned during his talk at Webexpo that “YCombinator is like StartupYard but million times bigger”. I would like to help StartupYard bridge that gap, by making connections to  the international market stronger and by voraciously helping startups export. If we’re Czech only, we will not be successful and our startups will not be successful.

Are Startup Accelerators Useful?

This is an abstract of the talk I gave during the last WebExpo Prague on how startup accelerators can be useful for entrepreneurs.

I have an idea!

This is how it always starts. You’re alone at the terrace of a cafe gazing into the void, thinking. You’re having a conversation with some friends or acquaintances. You’re reading an article about a current state of affairs and suddenly, out of nowhere, it hits you. Hard. You’ve just had the-best-idea-in-the-world. Ever.

This is going to make you rich and famous! How come nobody before you had thought about this? The more you think about it, the more excited you become and the more in awe you are of your own awesomeness. Congratulations. You’ve just joined the horde of entrepreneurs who have had that moment of grace… but what should you do first?

Forget about it.

You know the statistics: more than 80% of new companies fail in the first 12 months. Some might even argue that up to 95% of startups fail in the first 2 years. In other words, you have almost no chance of success.

Therefore, when that genius idea hits you, the first thing you need to do is to kill it. Convince yourself it is a bad idea. Yes this is hard. Obviously you’re a smart person, so it’s not like you expected to come up with a bad idea. Try harder.

If you really can’t convince yourself that your idea is a bad idea, then talk to your friends and beg them to convince you it is a bad idea. Don’t be defensive; on the contrary, listen to all their objections meticulously.

If you can’t convince yourself it’s a bad idea; if your friends can’t convince you it’s a bad idea; if your grandmother can’t convince you it’s a bad idea, then and only then, act on it. Obviously you don’t want to spend the next 5 to 10 years of your life pursuing a bad idea. That would be a total waste of your time and talent.

Positioning, Positioning, Positioning.

Now that the world is waiting to see your idea become reality, you are going to have to convince a few people (co-founders, first hires, investors), by explaining to them the why’s and who’s and how’s of your venture. You need to be able at any moment, under any circumstances, sober or drunk, to position your raison d’etre. The best way to do that is to spend some time working and polishing your product positioning statement. Make sure it flows and can only generate Wow’s in your audience’s mouth.

Should I apply for a startup accelerator?

At some stage, you’re going to have to ask yourself this question. Accelerators have now been around for 10 years and it’s very likely you will find one in a large metro area not far from where you are. Is it worth it? Should you apply to one of them, a few of them, all of them? I get asked this question often, and so far my answer has always been the same:

Should I maximise my chances of success?

Remember the statistics: you are more likely going to fail than succeed. Therefore instead of wondering if you should apply for an accelerator, try to figure out a strategy on how to beat the odds of going under. One of the ways is indeed to go through an acceleration program like the one we run here at StartupYard. So far 60% of the companies we have accelerated in 5 years are still running. Compare this with the previous statistic on failure.

So put that arrogant, know-it-all attitude away for a moment and think about what you would need to make your startup a success. As it turns out, your chances of success are much higher is you are accepted to an accelerator.

Nothing replaces experience.

Participating in an accelerator is not like attending a school. You won’t be treated like a kid- quite the opposite. By joining a mentor-driven accelerator like StartupYard, you will, in a very short time, meet with an impressive number of other entrepreneurs, corporate people, and professionals who not only are going to be excited about what you are doing (this is why they are mentoring you), but will also help you a lot by digging into their own experience. You can learn a lot by yourself, but you can apply more focused knowledge by relying on the experience other people have. For that an accelerator is extremely useful.

Nothing replaces personal contacts

Whether you will be looking for clients, partners, or investors, you are more likely going to succeed in meeting them if you are referred by someone else. Here again, an accelerator, armed with its network of partners and mentors, will help you meet the right person in the right organisation in less time than it takes to send a cold email. For that an accelerator is unbeatable.

We’re not called an accelerator for no reason

Ask any alumnus of a world-class accelerator, and they will tell you how invaluable the new contacts and knowledge they have gained in such a limited time are. 3 months is very short, but during these 3 months, you will be more exposed to the market than you could be when going it alone. This will help you to either fail faster, because if you are going to fail you better fail fast, or reach new KPIs faster. For that, an accelerator is where you should be.

Money is irrelevant.

Some startups I meet with are in the market for accelerators, comparing them based on the amount of funding they offer. This is probably the biggest mistake a startup can make when deciding on an accelerator, because the value of such a program is not in the amount of money they will give you. In fact, some of the best accelerators offer less cash than the less famous ones.

The value is in the network, the management team, and the calibre of the mentors, but certainly not in the tens of thousands of euros you will receive. Anyway, if your project and team are right, and the accelerator is doing its job, you’ll get the funding you need after the program. If you are only looking for cash for a few months, then an accelerator is not useful.

Married until the end.

In exchange for your participation in the program, you will most probably be asked to give up a small percentage (usually up to 10%) of your company. This is actually a good thing! Don’t view this as a loss. Making the accelerator a minority shareholder means that they now have a vested interest in your success. That’s not negligible.

In turn, this vested interest means they will probably do whatever is in their power to help you after the program is over. Down the line, they might be able to unblock a situation when you are stuck on a business deal, for example, and it’s in their best interest to do so. The success of early stage startups can depend on the influence of its investors. For that an accelerator is extremely useful even after the end of the program.

Don’t live in regrets.

“We would not be where we are now if it was not for StartupYard”. This is the typical feedback we hear from our most successful startups, and this could also be you. But don’t fool yourself. It is actually pretty hard to be accepted in an accelerator. Less than 3% of companies who apply are selected and, at a time when everybody wants to hear about your traction, being accepted to an accelerator is a clear sign of traction.

I meet tons of smart, seemingly ambitious entrepreneurs, with great ideas. Sometimes I invite them to apply to StartupYard. I even encourage them to join any accelerator, because I know what it can do for them and their young company. But when I hear “well, I’m just not sure right now,” I back off. I can’t sell a startup on its own chances of success. The drive to succeed, and the willingness to take a risk is a necessary part of your success as a startup. We can’t give you that, and we won’t try.

But I can tell you this: I’ve run successful (and unsuccessful), startups for 20 years, and I did it in a time when accelerators weren’t a thing. I would have killed for a chance to join one back then, so my advice to all those young Cedrics out there is this: go for it. As a founder, you will have a lot to lose (sleep, reputation, money, hair) but your startup has everything to gain.