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.

Update! StartupYard FastLane: Pitch Us in one of 6 Cities in September

The time has come! Today, we kick off our 6 city tour of Central European capitals, visiting incubators and workspaces in the Czech Republic, Romania, Bulgaria, Kosovo, and Poland.

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Startups in these countries will have the unique opportunity to pitch StartupYard’s team in person, and jump ahead to the final rounds of selection for StartupYard 2016, kicking off in January.

After applications close November 1st, StartupYard will select up to 10 teams to join us at StartupYard 2016, where they will receive 30,000+ Euros in investment, and over 500,000 Euros in perks, as part of an intensive, 3 month mentorship based program with dozens of workshops, and meetings with scores of mentors. Our program has accelerated 35 startups since 2011.

StartupYard, Fastlane 2016

StartupYard is expecting hundreds of individual startup applications from about a dozen countries for our 2016 cohort. We work hard to make the application process as fair as possible, but that doesn’t mean that it’s a perfect process.

Through a written application, much less one of hundreds like it, it’s very difficult to judge the passion, excitement, intelligence, and flexibility of an unknown startuper.

StartupYard is forced every year to relegate the vast majority of applications we receive to the dustbin, usually without ever meeting or really getting to know the applicants. We have to make very difficult decisions about hundreds of startups, based on very little information.

We probably miss out on amazing startups every year, because we don’t have time to get to know them all.

And that’s a shame. We don’t believe that a startup’s success in our program and in growing globally is necessarily connected with their ability to make themselves sound good on paper.

The decision to accept a startup into our program can have a massive impact on their future, but paper applications can’t communicate passion, people skills, poise, and responsiveness to feedback. These are things we only learn about the relatively tiny number of startups we interview in our final selection rounds.

We owe the startup communities in the countries where we recruit a fair shot at getting our attention. So we’re coming to you.

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Pitch StartupYard in Person: In any of 6 Cities

There will be 7 events, all in the month of September.

  • Prague, Czech Republic, September 2nd at Node5
  • Pristina, Kosovo, September 17th, at Innovation Center Kosovo
  • Sofia, Bulgaria, September 22nd  at VivaCom
  • Bucharest, Romania, September 24th with HowToWeb
  • Krakow, Poland September 29th at HubRaum
  • Warsaw, Poland, October 14th at Reaktor

How to Sign Up

Startups interested in pitching us at any of these events should sign up using the form below. Once we have verified that you meet the basic requirements to pitch us (that you are in our field, and other details), we will share your info with our local partners, and choose which teams to invite to pitch.

Even if you are not invited to pitch on-stage, this does not mean that you can’t meet us and pitch us in person. Some startups just don’t sound good on paper. That’s ok! We want to meet you, and we still want you to pitch us.

We’ll be in each city for at least a full day, providing time for you to do just that. The StartupYard team will host open hours in each of the venues we visit to give startups a chance to meet with us in person.

How it Works

StartupYard will visit 6 cities and 6 tech hubs such as incubators and workspaces (plus hold one event in our own city of Prague), where we will make ourselves available for a full day of mentoring, pitch training, and finally listening to the pitches of any local startups who are interested in joining our program and getting funded in 2016.

Local startups can choose to meet with us for mentoring and introductions, or come to pitch their startups in person, and talk to us afterwards. We will be providing constructive, experienced based feedback, in cooperation with our local partners in each city. These are not competitions, and there is no grand prize. However, they serve as an opportunity to grab our attention, as well as the attention of local influencers and investors who will also attend these events,

Those teams that impress us during this series of events will be invited to move directly from an initial application to StartupYard, directly to our final selection rounds, bypassing hundreds of other applicants in the process.

This is your chance to show us who you are.

What We Look For When Screening Applications

 Though we receive a lot of applications at StartupYard (240 in our most recent round), that doesn’t mean that every application we receive is worth much of our time. In fact, more than half of all applications don’t make it past the first screening. 

Here, we’re going to talk about what makes applications to StartupYard successful, and what you can do to give yourself a better chance of reaching the final rounds of selection.

Completed Applications

 This seems easy enough, but it’s too much to ask of some applicants. Our first screening disqualifies any applications that are disorganized, incoherent, or incomplete. Do we ask for a team video? Did you provide one? No? Well, better luck elsewhere. The process is not that cumbersome. A disciplined person can get through our application in a short afternoon. There are no trick questions.

Global Solutions

Aside from the completeness of an application, our first screening also disqualifies projects that ignore our open call guidelines in other ways. Most often, these projects are local in nature, or they are not really “startups.”
Sometimes, we get applications from digital agencies, or people looking to found a small business, like a shop or a local service. Those may be profitable ideas run by smart people, but that’s not what StartupYard is looking for.
 

It’s not that we don’t believe in small and traditional businesses. But StartupYard, our roster of mentors, and our program is designed to benefit startups that have a global potential, and are scalable on the world market. What advice and support can we give to someone who wants to open a shared workspace, or a local flower delivery company? Can our mentors help you get the best local delivery partners in a small town in Slovakia? Probably not.

And besides being accelerated at StartupYard would be a bad deal for a small business. If you want to open a shop, make up a business plan and get a bank loan like everyone else. You don’t have to run it like a startup.

Platforms Enabling New Businesses

The type of businesses we are looking for, our “bread and butter,” as we’ve put it in our open call announcement, are platforms that enable new businesses to thrive.

What does that mean, really?

Platforms like Gjirafa, BrandEmbassy, Shoptsie,  TeskaLabs, and TrendLucid, among many others, are platforms that allow individuals and businesses to accomplish things they would never be able to do otherwise. They provide more than just a service. They enable entirely new ways of doing business.

Platforms have the potential to grow into new, as yet undeveloped markets- providing technologies that people don’t know they need yet. And platforms also have more potential to adapt and grow in parallel with new markets. A game or a cool tech toy are nice, but they get old, and they are hard to revitalize once the novelty is gone.

One-off tech products are more likely to be victims of change, rather than its agents, but platforms can adapt to an evolving world.

Deep Tech, Visionaries

Maybe 15 years ago, startups were about being first. That’s not really true today. Most of the pitches we hear now are for ideas that have either been tried before, or have already become big industries.

A lot of entrepreneurs think that success is “discovering” something no-one has ever thought of before. But that’s just not reflected in the history of technology. Great entrepreneurs don’t discover entirely new things. They build things no-one has ever tried to build.

On the other hand, a surprisingly small number of inventors ever capitalize on their discoveries directly. Guttenberg, Goodyear, Turing, Whitney, Tesla, and Meucci are names most of us know. But they all died poor, seeing their inventions benefit others.

We aren’t looking for inventors. We are looking for visionaries. Visionaries see the potential in new ideas, and instinctively see how to take advantage of them.

Ford didn’t invent the automobile, he invented a new process for making them. Steve Jobs didn’t invent the phone, it invented a new way of using them. Gates didn’t invent software- he invented the market for software. Facebook didn’t invent social networks, and Google didn’t invent search.

The ideas behind those companies and their successes can’t be written down in two sentences. They are ideas about doing things differently, and doing them better. This is about ambition as much as inventiveness.  This is what “disruption,” is really all about, and it’s the ethos that will make a good idea into a great startup. 

When we say we focus on “deep tech,” we mean that we look not just for a catchy idea, or something that sells, but for the drive and discipline and depth required to execute it in a way not tried before. We look for companies that are interested not just in being in a hot market, but in doing more with their technology than anyone has done before.

This is the reason that we bet on Gjirafa, a search engine for the Albanian web, in a world where Google dominates almost every market on the planet. And why we picked TeskaLabs, even though the Czech Republic alone has two giant security companies who are working on similar technology.

 Big companies can’t move fast enough to out-think and out-innovate scrappy startups, and so great technological advances can come from unexpected and unlikely places. Those insights are the ones we are looking for.

We are interested in businesses that use technology as their unfair advantage, and can outwit bigger competitors with their mobility and flexibility, and their willingness to risk it all with a new approach.

 B2C, or B2B

Much of the experience of the StartupYard team is in B2C SaaS products, but about half of the startups in our last cohort were in fact B2B businesses.

What startups will find in our program, is a focus on positioning and growing a company that is customer focused, and has a strong focus on design, user experience, and marketing, as well as agile development and plans for global growth.

While it’s easier in some ways to grow a B2C startup on the global market, where the needs of customers are broader, more flexible, and less specific than in the corporate world, that doesn’t mean a great B2B idea doesn’t have a chance at explosive growth. While the skills necessary to run a B2C company are different in detail from B2B, the general principles are the same, and many if not most of the skills overlap.

Our roster of mentors includes many veterans of B2B startups, and corporate environments, and our B2B startups have benefited just as much from our focus on communication and marketing as have our B2C companies. 

Transactional and Subscription Models

We don’t often say what we aren’t interested in. But one thing we can do without is advertising based businesses.

Can they work? Yes. Many successful startups get a leg up from advertising, or survive on it. But advertising is a fickle beast, and unless you are able to generate millions of pages impressions per day, you’re unlikely to be interest us.

We are looking for businesses that are making something people are willing to pay for directly, through subscription or transactional fees. If your idea isn’t worth 9 Euros a month (or even .99 cents), to someone out there, then it may not be worth our time.

On the other hand, if you are building a platform that can leverage a network of advertisers, then we’re in business.

 

9 Ways to Make Pitching Easier On Yourself

For some who join us at StartupYard, pitching before an audience of 300 is as natural as brushing their teeth. Some people do have a knack for public speaking that can’t exactly be explained. Others have to work at it. This post is for those people- the majority of us, to whom pitching and selling our ideas in front of a bunch of people feels about as unnatural as reciting Shakespeare.

Don’t Overestimate the Role of Talent

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Certain people are naturally good speakers. But most great speakers have to work at it. The chances are that if you hear someone who’s great at public speaking, that ability is the result of many years of practice.

On the flip side, many people with genuine talent are unwilling to put the work in, and really use their talents to full effect. I don’t worry about the worst speakers we have at StartupYard- I worry about the talented ones. Those are the ones most likely to slack when it comes to preparing their pitches and really putting in the work. They are used to coasting on their natural abilities, and they often under-prepare for the overwhelming experience of pitching to a big audience.

When the real talents put in the work, we have magical moments. But more often, the best pitches come from the entrepreneurs who thought they couldn’t even do the pitch.

Be the Biggest, Loudest Person in the Room

This also has to do with natural inclination, but also experience. As a result of meeting so many people in the technology field, I’ve come to be able to spot certain things about people that I couldn’t before. For example, Jan Mayer, Founder and CEO of 2015’s TrendLucid, is a lecturer at Masaryk University. When we first met, and when he pitched StartupYard at our final selection rounds last year, I asked him if he was a teacher.

“How did you know that?” he asked, surprised. It was his ability to project his voice, as I like to say, to about 130% of the available space, and to appear larger than the space he occupied. If you watch teachers teaching, they command attention by speaking in a voice which is slightly louder than it needs to be, and addressed to what seems to be a group which is slightly larger than the actual group they are speaking to.

This “4/3s” voice allows the teacher to command the attention of the audience (often unruly teenagers), in a way that a normal speaking voice could not. By giving the appearance of size and energy that is slightly larger than the room, the teacher makes the audience feel as if they are smaller than they truly are.

So be big. Be bigger than the room.

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Don’t Pitch or Present. Explain and Share

There is a positive example that you can take from Steve Jobs, and more recently Jony Ive or Tim Cook. The best “pitches,” are really not a sales pitch, but a narrative of events, trends, and technologies that explains why a product is the way it is, and why that makes sense.

In best pitches I hear, the emphasis is not on the fact that something can be done cheaper, or that money can be saved or earned- nor do they lay heavy emphasis on the size of the market (a classic rookie mistake is claiming you’re in a “Gazillion Dollar Industry,” as if that means something).

Pitches that tell me a company will be hugely profitable are at best eye-rollers. If you’re a startup, then that’s not a claim anybody should put much faith in. And anyway, the most important thing is the reason your new idea or business model is revolutionary, not exactly how much money it’s going to make. Those predictions will be useless in 6 months. So focus on what you can control, which is the execution of your vision.

Instead, the best pitches tell a story, which is something we work on at StartupYard quite intensively. The story is shared, and the processes involved are explained. If you approach your pitch with this perspective in mind, then you can relieve yourself of much of the burden that many entrepreneurs place on themselves of “selling,” with something much more organic- something that they do every day with employees, friends and family.

Investors and partners want to see that you can clearly explain and share your vision, so make your pitch about that- not about your ability to sell. This is in many ways easier, because it demands that you stick to your strengths, rather than

Remember, then Talk. Not the Other Way Around

When we’re engaged in normal conversation, sometimes we start a sentence without really being sure where it’s going to end.

Here’s a fascinating exercise- record yourself talking about something casually, and then write it down exactly as you spoke it aloud. What you’ll find, typically, is that it makes almost no sense at all. It will be full of runon sentences that lead nowhere, and ad-hoc phrases that only make grammatical sense if you cross your eyes.

Nobody talks the way they write. But often, founders doing their first pitch will write it, expecting themselves to be able to say it out loud. Well, your mouth and your brain are not accustomed to actually speaking the language that we recognize in writing. That’s just not the way people talk.

Find Your “Beats”

When working with our startups, I constantly harp on the idea of “beats,” in their pitches. A beat is a moment of particular emphasis. It is a phrase or a word, or a particular idea that is central to your narrative. It needs to be remembered.

Great pitches have a clear sequence of important points, or beats, which are memorable. For an example of this, it’s useful to look at someone like Tim Cook, revealing the Apple Watch (go to exactly 1:00:00 in the video.

Cook organizes his beats in a very simple pattern. When he needs to emphasize a point, he says it as a slide appears with the same words and an image behind him. Simple, and elegant. If you’ll notice, he only uses words on the screen when he is making a specific, memorable point. At no other time are there any words on screen.

A common mistake for founders is to make their “big point,” or “ahah moment,” a part of a slide that is so complex and full of information, that the audience is busy looking at it instead of listening to what is said. Your “beats,” have to be moments where nothing else gets the attention but one simple idea.

So Nice, You Said it Twice

I’ve talked in previous posts about repeating the name of your company during your pitch (by the way, repeat the name of your company in your pitch). But this piece of advice is simpler. If something is really important in your pitch, don’t be afraid to repeat it.

Repetition is a powerful way to emphasize what is being said. A very powerful way.

You see? People frequently repeat things when they’re speaking, but they rarely do so in writing- which can make a pitch feel pretty stilted when you haven’t rehearsed it enough.  

Your Slides Are the Plan, Not the Pitch

Our Managing Director Cedric Maloux repeats this same piece of advice to every startup we accelerate: “Your slides are cues, not content.” When we write our presentations, the tendency is to try and accomplish communication with slides that can’t be done verbally. That’s a mistake, because it leads founders most often to try and pack slides with too much information.

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Here’s a good general principle: if you can’t say it 10 words, it’s too much information for a slide. Your slides should be nothing more than a framework for what you want to say. Nobody wants to go to a pitch and spend their time reading your slides. They want to hear from you.

German Field Marshal Helmuth von Moltke famously wrote: “no plan survives contact with the enemy.” As I’ve pointed out, one of the downsides of planning a pitch, is that what you end up with is a plan. Whether that’s a plan of exactly what you’ll say, or exactly what you’ll show the audience, that plan is not what is going to happen.

As I often tell my startups, the trick is not to say what you want, but to avoid saying what you don’t want. So be clear, be precise, and don’t over-write your pitch. Organize it into simple chunks.

Use Real Numbers

When I say “real numbers,” I’m going a bit beyond the “big numbers on the screen,” sense of the word “real.” I see plenty of pitches that are full of impressive numbers that, when you actually consider them, don’t say anything about the startup that’s actually pitching.

Worse, I often see pitches that include the numbers of competitors- as if the startup is just going to magically carve out a slice of the pie in their industry just because they showed up at the table. It doesn’t work that way, and investors know that. Even worse than that, I have heard pitches that included the valuation of companies in the same market. Now we’re in La La Land for sure.

Do Vocal Exercises

It’s silly. It’s embarrassing. It really, really works. For the past 2 years, StartupYard has engaged coaches leading up to Demo Day to work on voice training. The impact, over and over, has been startling- and not just for those founders who began as novices in public speaking.

Your voice is like anything else- an instrument of coordination that you use to do certain things. We are all accustomed to talking. But like the difference between walking a kilometer, and doing a pole vault, the body is not accustomed to the feats of energy and strength that we do not practice long and hard.

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For those without extensive practice and training, public speaking is surprisingly exhausting. It takes an unexpected amount of strength to use your voice to address more than a handful of people, and adrenaline causes your heart to beat faster and consume more oxygen, meaning you need to breath more deeply and quickly. This all causes a person to expend more energy, to sweat, to be out of breath, and to feel exhausted, even after only a few minutes.

Bonus: Don’t Forget to Smile

This isn’t part of my 9 tips, but it’s important. Smile! And you’ll get smiles back. That’s reassuring, and will make you feel better about what you’re doing.

Co-working: the Future of Work? Our Interview with Prague’s Node5

StartupYard’s connection with Node5 dates back to the founding of both, in 2011. Born as an incubator/accelerator program, Node5 and StartupYard quickly split into two separate programs, with separate investors.

Node5, founded by Lukas Hudecek (an original co-founder of StartupYard) became an open co-working space, with a mix of public and private offices which companies and freelancers, as well as startups, share. The space offers a dynamic and social workplace for people who would otherwise be working in small teams without large offices, and is a cost-efficient solution for small companies who would like to offset and share some of the costs of running an office, including reception, food and drinks, meeting spaces, security, cleaning, and other services.
Last year, StartupYard returned to Node5, launching a new partnership, and making some of the accelerator’s resources available to members of the Node5 community.

Node5 is conveniently located near Andel, in Smichov, part of Prague’s “Silicon Valley” district to the west of the city center.

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You can read about Node5 on their website, or tweet to them @TheNode5

Hi Petra and Lucas! First, give me some background on yourselves. How did you come to work together?

Petra: I’ve stood on my own feet since the age of 13 and the rough struggle of everyday survival made quite an “iron lady” out of me. I learnt to go and achieve anything in any profession, and make money for the next day under any circumstances. This heartless method helped me quite a bit  when I decided to set aside my university studies and enter the tough world of PR, marketing and sales in which I founded a company, later sold it and used the money to move to Amsterdam to finally pursue further self-development.

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Petra Koncelikova managers Node5, and a team of between 5 and 8

Time spent in Holland was quite therapeutic, and an eye opener. I created a local business- a leisure programme for hard working women which kept me financially independent. But more importantly, it taught me to love and respect myself as I grew alongside my business.

I met Lukas through a friend of mine while still living in Amsterdam. Meeting a businessman who cares more about helping others than making money was in my world just as much Sci-Fi as flying a rocket to Mars to shop at a Bio market. We had a couple of discussions and after a while it turned out we complemented each other in many ways. Particularly in business matters.

We found each other pitching in where the other got stuck. His philanthropy and my rigid attitude proved to balance out perfectly and after just a couple of months, real results showed and it’s kept rolling ever since. We make money and do good at the same time.

Lukas: Being thrown into world of entrepreneurship since the early stages of life, I had my ups and downs starting a couple of companies.

 

Lukas Hudecek, founder and owner at Node5

Lukas Hudecek, founder and owner at Node5

I started a computer hardware store and B2B platform for local computer shops, a creative agency making websites in FrontPage 97, a hardware manufacturer of heavy-duty wifi routers for rural areas and finally, a retail shop for home automatization systems. I raised capital for future endeavors by employing myself in companies as a developer, one of which happened to be Skype.

After a while I thought it would be great to share my experiences with others, and so I started to support younger entrepreneurs by organizing events and hackathons. Those efforts turned into founding StartupYard, where I had the amazing chance as CEO to put our first batch of eight companies through the 3 month program. I founded Node5 soon after.

The two most significant events in the existence of Node5 were when we became break-even in February 2014, and when I decided to hire Petra and make her my General Manager. She proved yourself ever since, and as an extra bonus I’ve gotten a couple of lessons on how not shoot myself in a foot.

What problem did you originally hope to solve by opening Node5?

Lukas: When I was with StartupYard, companies were missing two things especially. A venue and community. Node5 was exactly this, just without the acceleration program. When we started, we thought using London’s TechHub franchise was the way to go, but later we decided to stay independent. It looked like a crazy decision back then, but worth it because now we have the venue, community and accelerator under one roof with complete independence.

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This is simply something neither Node5 nor StartupYard would have been able to achieve on it’s own at this scale. And that infrastructure was something I’d originally been hoping to solve for companies like we use to be in the beginning. The time is now.

Was there a model that you followed when you founded Node5? How have the space and business diverged from your original vision?

Lukas: As we were in close talks with TechHub during the early stages of Node5, we knew some of the essentials. We knew some basics about community and real estate business around this type of work. Even though the purchasing power in London and Prague differ greatly, we saw an opportunity in combining community and real estate in a nearly non-profit business to engage talent in an equity-based program, to slingshot ready made entrepreneurs out to the world.

But I was thinking about Node5 from the wrong angle at that point. Very soon we realized we are unable to pay for Node5’s operations costs with equity, so we started looking for stronger monthly revenues. In Feb 2014 after a long hard 2 years, we became break-even strictly on the real estate and space rental business side.

At that point, we had something of an appetite to crank up the old acceleration program too, but then StartupYard fortuitously returned [StartupYard was located elsewhere from 2012 to 2014] and did a fantastic job on the last batch. I would say that this helped us to properly realize Node5’s original vision for the first time.

On the business side, what has proved to be the hardest part of running a co-working space? Has anything surprised you?

Petra: Running a co-working space of this size and form proved to be slightly schizophrenic, because you are internally dealing with different types of businesses and professions in a team of 3 – 8 people max. A thousand square meters require constant maintenance. We keep that space up and tidy 24/7. There’s always something going wrong, somewhere. You have to do not just your promotion but also promote your partners. You’re a salesperson, project manager, event coordinator and HR, all at the same time having only 24 hours in a day.

You have to deal with smaller unreliable service providers since we don’t reach wholesale quotes. Its hard to describe the hustle we arein when we have to find an alternative so our clients won’t spot the difference. Fair usage policy is NEVER fair enough. You always step on someone’s toes and your good intentions usually interest no one.

Sometimes we help enthusiasts to throw their own gig to support their community, while planning events 6 months ahead in the background just to try hold still on a tight schedule. We have this policy to do our best and always walk the extra mile for our clients. But we can’t fit it all in all the time, and there’s always something we miss. It can be pretty frustrating!

Lukas: I’ve been surprised by the diversity of core tasks that are essential to running a coworking space. On a daily basis, we bounce between being a catering firm, an event production company, and real estate and business consultancy agencies. Each of these functions require a great deal of brain cycles on its own, so it’s hard to keep them profitable and running.

It’s like running four companies simultaneously, and that is really the hardest part. I wouldn’t be able to handle it without the great team Petra has put together. Running a coworking space isn’t exactly the easiest job ever, but what is?

Are there some success stories from Node5 that you’re particularly proud of?

Node5 and StartupYard cooperated last month on PragueHacks- including over 80 local programmers.

Node5 and StartupYard cooperated last month on PragueHacks- including over 80 local programmers.

Lukas: I think that I am speaking for my whole crew when I say that there are many successes our members achieved over the time we’ve been here, but I’d rather spotlight something else I am proud of. That’s the current state of our startup infrastructure and its ambitions. I am proud of all those 2-4 year old companies that still push forward like crazy! I am amazed how many failures were forgotten over the past months and years. I am sure that if there is anything like the Czech Startup community, it has never been better. I am proud of what we have achieved together over these last couple of years.

Do you see this or other alternative work spaces as a viable path for a larger part of the workforce in the future? If so, what are its main advantages and disadvantages?

Petra:  Well as a former freelancer I’ve tried it all. I worked in a co-working space back in my early days, and I didn’t find it that awesome. But it was still better than being at home, where I either worked too much or not at all. Efficiency was quite arguable.

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The open workspace at Node5

When I founded a PR agency with 10 employees, renting A-class office space in the city center, it was great at first. But every time we got stuck on something we had no one to turn our heads to. No doors to knock on. If there had been something like co-working for marketing agencies back in the days, I’d probably let the nice office go at least in a first 1-2 years of our life. Having like-minded people around means having opponents for your ideas all the time. It’s resources you could often use when you’re short handed or worse, when you have too many people. Just a simple coffee at the bar could save you hours of work. I see Node5 members get together everyday and I see them creating things, companies and values, helping and supporting each other. I find it simply priceless.

Lukas: There was a study by DeskWanted in 2013 saying that demand for shared workspace rises by 89% as the independent workforce hits 1 billion. There’s no current number of how many coworking spaces are there but back in the 2013 the number was 2.500 coworking spaces around the world. There are activities such as remoteyear.com showing us, that people like to work not just independently, but also remotely. The same signal we’re getting from big corporations who sends their small teams to work from Node5 remotely and independently from the rest of the company departments. Working in shared workspace isn’t for everybody, except it is 🙂

What’s in Node5’s plans for the next year or so?

Petra: We were working extra hard in the past four months on event production to earn some extra bucks that will allow us to refurbish our residential area, to provide much better working conditions for our residents and bring back a high level of comfort. Other than that, we are also working on a couple of business deals that will provide our members certain perks, that’s something we’ll be releasing soon so you have to wait for that!

Lukas: Recently, we faced a hard decision whether to expand to upper floors to ramp up our revenues, or improve the comfort in the current setup. We’ve chosen improvement and are currently undergoing reconstruction in the residential space. This will provide our members with more privacy for salespeople, more meeting rooms, leisure room, various options of privacy in coworking space and more.

Additionally, what we might be looking at from the longer-term perspective is a program for further support of companies after graduating from acceleration programs, and on growing the real-estate in size and level of quality, as well as range of provided services . We hope our team will help us to build it up for an interview next year.

StartupYard seeks Graphic and Web Design Intern in Prague, January 2016

Are you a self-starter looking for real, hands-on experience in graphic and web design, working with a diverse group of startups? We have a job for you. We are seeking a graphic and web design intern to join us in Prague for 3 months in 2016. 

Last year, StartupYard welcomed Ian Abildskou, from Denmark, as our in-house graphic design intern. Whatever Ian lacked in experience, he made up for in his enthusiasm, his willingness to try new things, and a very positive attitude. He made a lasting impact on StartupYard, and all the projects that he worked on with us.

Ian (right) with Exec in Residence Phillip.

Ian (right) with Exec in Residence Phillip.

Over the course of 4 months, in which he spent several days a week at the StartupYard offices, first working with the StartupYard team, and then our 2015 startups, Ian designed our new logo, and a presentation on the Czech tech ecosystem that was among the most popular content we have generated all year. In addition, Ian contributed to the designs of almost all of the 2015 startups’ logos, and to many of their websites and other marketing materials as well.

Dates:  January 2016 – April 2016

The Job

We are looking for someone like Ian, who wants to gain some professional experience working on real startups, with real users and real products. The designs that this person works on will be seen by potentially millions of people who use the products and services our startups create.

The candidate should be familiar with basic visual effects software such as Photoshop, visual design software like Fireworks, as well as basic website design tools like Dreamweaver. The candidate doesn’t need to be a photoshop wizard or a total ace when it comes to website design and CSS, but they have to be willing to learn, and interested in receiving guidance and feedback.

A “good eye” is essential. Someone interested in photography and drawing, with some experience in those areas, will have an advantage.

The internship will be what this person makes it. Whether they choose to come in just a few times a week, or to devote themselves more fully to the learning opportunity we offer, this person will have the chance to work with up to 10 new companies, all of whom will be looking for help designing logos, making web pages, crafting email templates, and making ads for social media, among many other creative tasks.

They will experience the day-to-day challenges of working with startups, including having to deal with unclear or incomplete ideas and requests, and having to tweak and re-work designs and ideas many times, until a consensus can be reached. Startups learn by doing, so the candidate will have to be prepared for shifting objectives and shifting focus. If you are willing to hear: “I love it… but we need to completely change it,” then this is the place for you.

The candidate must also be willing to have and to share their opinions and ideas. Startups don’t always know when they need help, so the ideal candidate will speak up when they think something needs doing. Startups also don’t always know what works best, so a great intern isn’t afraid to disagree, and to fight for their ideas.

Language

As StartupYard’s program is conducted entirely in English, good communications skills in English are essential to this position. Czech language skills will not be factored into the selection of candidates, so Czechs or non-Czechs should not hesitate to apply.

The Benefits

Aside from small perks like free lunches (the first month of the program), and free coffee and other snacks while working, the intern will have the opportunity to meet and interact with many of StartupYard’s influential and interesting mentors, many of whom run successful businesses, and may provide valuable contacts for work and professional development.

During the second month of the program, StartupYard hosts dozens of challenging and informative workshops, which the intern will be encouraged to take advantage of. This will give the person an opportunity to learn about working in startups, picking up valuable knowledge about marketing, sales, UX/UI design, and other fields related to their work. We don’t want an intern just to put them to work- we want to help this person in their professional development, and the StartupYard team will spare time for guidance, direction, and encouragement when needed.

Over the course of the program, the intern will have a chance to build an impressive portfolio, and the bragging rights that go along with having their work featured by real, working businesses. The intern will have many opportunities to showcase their work to people who may be hiring, such as at StartupYard’s Demo Day, and StartupYard will reward hard work with strong recommendations and other help landing a job after the internship is up.

In addition, there will be startups leaving our program with the need for graphic and web designers. The candidate may have the opportunity for further paid work with those companies following the program.

Logistics

As this is an unpaid internship, the ideal candidate is a student or young professional who will be in Prague during the internship period, and will provide for their own accommodations and living expenses during that period. We would expect the intern to spend a minimum of 10-12 hours a week at the accelerator, and any effort above and beyond that amount would be welcome and encouraged.

Join Us

If you’re a student or a young professional looking for a leg-up in the startup business, and real, hands-on experience in design, then StartupYard is offering you an unmatched opportunity.

In order to apply, please click on the button below and submit a CV, along with a portfolio or a few representative samples of your work. If you have a personal webpage, or a LinkedIn profile,  please provide a link to that as well.

Don’t Be in the “Startup” Industry

This week, Cedric, our Managing Director, asked my opinion on an article that appeared on Medium last month by Arthur Attwell. Attwell shut down Paperight recently, and it’s an emotional post about some of the mistakes he thinks he’s made, but also on the industry he has chosen to inhabit. He’s not done with startups, but he’s done with “the startup thing.” The conferences, the competitions, the startup media, and the accompanying apparatus that is designed to funnel investor money through startups, into the hands of people in the know.

“What do you have to say to that? It reminds me of some of your opinions as well- maybe there’s an article there?” Indeed Cedric, there is an article there.

The Startup Industry

Attwell makes reference to the “startup industry.” That is the endless and sometimes bemusing list of events, conferences, competitions, breakfasts, lunches, brunches, innovation slams, hackathons, and every other possible flavor of sponsored, packaged, pre-digested infotainment that startups are sold as steps on the ladder to success.

My own feelings on this subject are mixed. I’ve been to a lot of conferences. Cedric’s are much stronger- maybe because I still feel I have a lot more to learn about the industry in general. But I often wonder what startups are doing there, particularly when they’ve already been funded, and when their customers are not the event’s audience.

Either a rave or the Slush conference in Helsinki

Either a rave or the Slush conference in Helsinki

Worse still can be pitching competitions, where again, startups are not necessarily pitching to an audience that is as interested in their products or them, as they are in seeing whether that person will fail on stage. Admittedly, I have rooted for startups to fail at pitching competitions, either because I didn’t like the idea, didn’t like the person, or for some other reason. I have never been inspired to help that startup achieve anything.

And while prizes are often involved in competitions, the terms involved in those prizes are rarely that attractive. A $500,000 “prize,” especially for a startup that can actually win that prize (meaning they’re good enough to beat up to a hundred others at the same competition), is not necessarily something that a good startup wants, particularly when there are better investment offers already in the offing.

At Slush 2014, for example, one of the finalists for the half-million euro prize stated flatly, when asked how he would use the prize money, that he wouldn’t take the prize, because the terms weren’t favorable enough, and he had better offers. That’s not that uncommon.

That’s the same sort of strange logic that Hollywood stars or famous musicians sometimes talk about: once you’re rich and successful, everyone wants to give you things for free. If you’re good enough to win a 6 figure pitch competition, you can probably land a far better private investment already. So what’s the game really about?

The TechCrunch Bump and the Trough of Sorrow

Andrew Chen famously wrote about the phenomenon of the TechCrunch Bump and the Trough of Sorrow. Namely, that the publicity associated with the “startup media” and acclaim in the “startup industry,” doesn’t actually translate to real success. It can help you land a few early investors, maybe, but it won’t actually make your product anything that your target users want to actually use, much less pay more. However, as Chen points out, far too many startup CEOs think that the name of the game is to become successful at being a startup, and so follow all the wrong signposts on the route to that goal.

Used for educational purposes: you can find the original at Andrewchen.co

Used for educational purposes: you can find the original at Andrewchen.co

And that route is expensive. There is unquestionably an industry of bells and whistles that is selling things to startups that they should, if they’re competent, confident, and energetic enough, never actually have to pay for.

The whole structure of startup conferences is weird. And the structure reveals the primary motivations. Conferences that charge startup founders to attend, while letting the press in for free, make it clear where their priorities lie, and it isn’t in helping startups.

While investor passes are often more expensive than entry-level tickets for entrepreneurs, the money is in up-selling the startups to tables, booths, and other “opportunities,” that are of questionable value, while the investor passes will in reality find their way into the hands of investors who get deep discounts off the sticker price.

If you are a non-funded startup struggling to survive, you should not have to pay to attend a startup conference. Full stop.

We Can Be a Part of the Problem

And we’re a part of this as well. Recently I was invited to speak at a local event where Startups from this region will pay up to 160 Euros to hear me and a list of interesting people speak. I know that part of what they’re paying for is the opportunity to meet me (and people like me), and pitch me their ideas. Which is a shame, because if any of those people emailed me, I would gladly meet with them for free.

All the truly valuable partners, investors, and friends of our organization that I’ve met and seen at conferences would do the same.

The thing is, I’m creating value for this event by being there, and making it possible for the organizers to profit from my presence without paying me- and the money is coming from startups who can probably ill-afford to waste money on hearing me talk about anything.

Meanwhile, I’m getting a lot of value out of this event for free. I’m speaking, which means I’m helping the StartupYard brand, and I’m getting a look at all the startups in attendance. I am the real customer for this event- everything has been tailored to suit my needs.

There’s the notion that you’ll “network,” at such events, and like Attwell, I’ve had limited success in doing this. If networking is about building relationships with people who have a common interest, then success would be defined by the number of working relationships that have come out of conferences. I have made a few of these, and I value them, so I credit the allure of conferences in allowing that to happen. It’s not a lost cause.

But again, the people who I’ve gone onto having a very productive relationship with from conferences were at the conferences looking for me, just like I was looking for them. So the conference was a *really* expensive way of meeting them, considering our shared interests.

I still see some value in a certain type of tech conference, particularly ones like this Sofia’s Bulgaria Web Summit, which is run by StartupYard Mentor Bogo Shopov. There, the startups paid a nominal fee, there was little window dressing, and the speakers were by and large not investors, but real thought leaders and passionate advocates for new types of ideas.

Likewise, I attended Howtoweb in Bucharest in 2014, and was delighted by the fact that the organizers brought mentors in to do actual mentoring with real startups- all of whom paid very little to attend. Mentors were not there for their own ego-stroking purposes, but to meet and engage with interesting young people. I loved it. So good conferences are certainly possible.

Things have also changed for the good in other ways. The famous flap over Demo, for example. In 2008, disgusted with Demo’s practice of charging startups up to $2500 to pitch their startups on stage at their popular events, TechCrunch founder Michael Arrington scheduled TechCrunch 50 at exactly the same time, and offered startups the opportunity to pitch for free. TechCrunch would charge investors to attend the event. One needn’t now ask which side won that argument- TechCrunch now possibly runs the biggest startup pitching events in the world.

The Moth Trap

Cedric describes the “startup industry” as a “moth trap.” You know those lamps that lure moths to them in order to zap the life out of them? That’s a bit harsh, but it can be accurate.

With so many attending startup events hoping to make breakthroughs with their startups in terms of investment, hiring, or partnerships, the expectation levels are often over-hyped. It takes a lot of work to turn even 2 or 3 contacts from a conference into something that might eventually move the needle at your startup. It takes a lot of false starts and false friends to find those people who are really going to make a difference for you.

Worse yet, startups show up at these conferences with unreal expectations about what they’re going to get out of it- to the point that they ignore real opportunities when they’re presented. I’ve talked to more than one interesting startup that has paid for a small space at a large conference, that has not been funded, and invited them just to apply to StartupYard, even if they don’t see themselves moving to Prague.

For an application that takes maybe an hour of a startup’s time, we offer the option of real funding, and a real direction for a young startup. Few apply, and the more they’ve paid to be a part of the conference, the less likely they are to apply. It’s as if when I mention that we offer funding and a program that’s designed to help them make real progress, they have been conditioned not to believe me.

It’s as if they think that because they have a few pieces of swag, t-shirts, and a rollup so that they look like a startup, and have had conversations with investors (and only conversations), that they would be taking a major step down to consider submitting themselves to anything resembling a reassessment of their priorities.

They have been conditioned to believe that their goal in life is to land a big funding round, and that giving up 10% of their company (which is worth exactly nothing until someone invests in it or it makes a profit), in exchange for real, tangible help in moving forward will be a hinderance when it comes to future negotiations, rather than a net gain.

As I’ve mentioned previously, and as has never failed to amaze me, I have heard from startup founders who have never raised money, that our terms are too steep, because “a VC told me that we could get a valuation of X Million Euros.” You could, if that VC invested in your startup. But they haven’t. And the notion that you’re going to get an investor at that valuation at a startup conference might be a little unrealistic.

In fact, I know a few VCs who might look down on the fact that you’ve paid for swag and a conference booth without signing a real live customer. These people are smart, and their job is making money. They will be looking at your traction, not your logo.

But still, the conference environment is like the California gold rush of 1849. The people who made money then weren’t the prospectors (the startups), by and large, though a few of them got filthy rich. The people who made the steady money in the gold rush were selling the shovels and the whiskey. Or in today’s terms, the metal water bottles and the keychains.

In that environment, we sometimes feel like the guys who walk around offering to lend the prospectors our heavy excavation equipment, and help them dig for gold, and being told that 10% of the loot is too high a price to ask, given what treasures might await. Keep shoveling.

Attwell blames himself for being a moth to that flame- falling for the adulation of the “TechCrunch Bump” rather than focusing on his startup. He’s right to blame himself, but he’s also right to blame the industry for perpetuating the myths it does in order to sell the show, and perpetuate its own legends.

Breakthroughs are not magic, and they don’t happen accidentally. And it was with not a little irony, I thought, that the speaker line-up for last year’s LeWeb conference in Paris was a parade of people who all said more or less the same thing, to the point of it being a sort of idée fixe for the whole conference: “this is not magic.”

There were more presentations about failure at LeWeb last year than there were about success- at least that was my impression at the time. There was an overtone of exasperation with the magical thinking that has been associated with startup culture in recent years, and this manifested as a pragmatic appeal to the people in the audience to be a little more grounded, and to understand their own limitations.

Summing it Up

In a brilliant essay, Paul Graham (of Y-Combinator) wrote last year about the problem of “startups,” with respect to our education system, and our business culture. He points out that education teaches young people to fulfill adult expectations, not to fulfill their own passions. Education and work is a game with rules, and can be won if you know how to game the system. In the same way, we teach young people to “do startups,” according to a paint-by-numbers system, rather than encouraging them to follow their passions in any way that might work: “It’s not surprising that after being trained for their whole lives to play such games, young founders’ first impulse on starting a startup is to try to figure out the tricks for winning at this new game.”

He goes on: “Since fundraising appears to be the measure of success for startups (another classic noob mistake), they always want to know what the tricks are for convincing investors. We tell them the best way to convince investors is to make a startup that’s actually doing well, meaning growing fast, and then simply tell investors so. Then they want to know what the tricks are for growing fast. And we have to tell them the best way to do that is simply to make something people want.”

We can see in this a horrifying regressive cycle. Successful startups all make the same “noob” mistakes that unsuccessful startups also make. Only when they become successful, the lessons of their failures are always forgotten. They had swag, so you have to have swag. They won disrupt, so you have to win disrupt.

Karl Marx once wrote of something said by Hegel: “all great world-historic facts and personages appear, so to speak, twice.” Marx comments: “He forgot to add: the first time as tragedy, the second time as farce.”

The axiom has often be applied to geopolitics or to cults of personality (Marx was applying it to Napoleon and his nephew Napoleon III). But it can as easily be applied to generational differences.

Every generation makes its own unique mistakes; generating its own unique tragedies. But there were reasons to make these mistakes- they were made in the process of trying to accomplish something new and different. The next generation repeats the same mistakes again, but this time only as a matter of form; only because that is what is expected of them, with no sense of the purpose behind them. Tragedy becomes farce.

That’s why we exist- just like Y-Combinator. That’s what keeps us relevant. Because at a good accelerator, and we try to be the best accelerator we possibly can be, with the best and most engaged mentors we can find, mistakes are things you learn from. And they don’t have be your mistakes- they can be someone else’s. They can be ours.

Failures are productive. We are here to make sure that our startups are not slaves to fashion, but are remaining true to themselves as they grow. That they are being realistic, and honest with themselves.

We naturally want to be like the people who we idealize as models for success. But people are very bad at recognizing what matters when it comes to repeating that success. So you get entrepreneurs who dress like Steve Jobs, or think that the habits and peculiarities of successful role models are the “trick” to being as successful as they were- rather than the more common sense reasons like hard work and some good luck.

You make life about becoming something, rather than accomplishing something, and no matter what else you teach people, they’ll focus on the appearance rather than the reality. In our attempts to be the things we think we need to be: “entrepreneur,” “startuper,” “winner,” we end up betraying the things we care about. Or worse- we don’t even pay attention to the things we actually care about, because they don’t have the caché necessary to turn us into something others will recognize and respect.

An unfortunate part of this business, and we’ve seen our share of this at StartupYard, is that many of us are pretenders. That’s not a bad thing. That’s nobody’s fault. A person can be a pretender, and find their true passion later, when they’ve exhausted themselves or gotten wise to the game and stopped playing it. That people pretend is a sign also that they are seeking something they recognize as valuable.

I would in fact posit that the existence of the StartupLand circus and the attendant conferences, seminars, events, and other time-wasters, is an indication that there are enough really passionate people circulating in the tech community to sustain such high numbers of pretenders and play-actors. If there wasn’t anything real, the whole thing would eventually collapse under its own weight. It still might, but at the core, I see more genuine innovation, energy, and passion now than I did when I started working with startups.

And while I see a self-adjustment in StartupLand may be in the air- a common feeling that the game has gotten old- I also see that most of the startups we work with recognize the real work that remains to be done.

StartupYard Demo Day 2015, in Tweets and Pics

The Big Day

For the StartupYard team, this day has been 8 long months in the making. For StartupYard’s teams, in most cases, it’s been years of hard work.

Last night, before an audience of nearly 200 local investors, professionals, startupers, and members of the media, StartupYard’s 6 startups premiered to rave reviews.

Of course, our mentors were never without their opinions.


After 3 months of gruelling work with mentors, advisors and workshop runners, and 2 weeks of sheer panic and excitement as they formulated and rehearsed their pitches, our 6 startups exceeded our expectations for this Demo Day in every way.

The Startups

Here are a few shots of the teams warming up before the event:

The Community

Last night, we were reminded once again of what makes Demo Day so important.  Over 40 of our active mentors were present, and many commented on the incredible progress the startups had made in just 3 months. Mergim Cahani, of Gjirafa (a 2014 member of Startupyard), was in attendance with some exciting news of his own. We hope to share that with you soon on this blog.

The Event

Not only is Demo Day a chance for a great startup with a worthwhile idea to get noticed, and funded, both locally and internationally, but it is also the moment when our startups become “real.” The moment when they transform from something that few people have heard of our thought about, to something on the market and in the air, interesting, dangerous, even possibly inevitable.

Following opening remarks from our Director Cedric Maloux, Michael Jackson, of Mangrove Capital Partners, the VC fund, delivered an amazing keynote address, which aligned perfectly with our own mission:

 

Then it was time for our 6 startups to take the stage. They blew us away.

The Pitches

It’s a thrill to share that experience with our Startups, and to take a moment to see how far they’ve all come from those first meetings way back in January, when they pitched us the barest seeds of amazing ideas.

The conversation and discussion reached well into the night, with many of the guests staying to talk with startups until the small hours.

What’s Next

StartupYard can take a nap today. But it won’t last long. In addition to hosting Prague’s biggest ever open-data hackathon in just 2 weeks, we’ll be opening applications for StartupYard 2016, kicking off in January of next year, within the next week.

 

Meet the StartupYard 2015 Startups: Testomato, a watch dog for your website.

When Testomato joined our program, it was with the understanding that they would be hiring a CEO to lead their team. Over the past 3 months, as we’ve gotten to know the Testomato team, and their new CEO Marcel Valo, we’ve become even more excited about the potential of this idea, and confident in their ability to bring it to a larger audience.

Testomato actively monitors and tests websites for errors and other issues that may interfere with normal operation, letting the site owner know almost instantly when an issue occurs. Simple tests can be set up and run continuously, ensuring that mission critical sites and services never go down unexpectedly. Testomato aims to be the leading watchdog for websites- a must-have tool for any revenue generating site.

Hi guys, tell us a bit about Testomato. What does the service do? Who is it for?

slack-imgs-1.com

Marcel Valo, Ceo of Testomato

Marcel: In short, it’s a monitoring service for websites. It tells you when your website has a problem that may interrupt service or access for your visitors. It does a lot more than just monitor websites of course, but this is the core functionality: making sure your website is up and running properly at all times.

Testomato is for people like myself. In my corporate career, I have been responsible for marketing communications and for company websites, and I always had lots of problems to solve with those websites. Google analytics codes missing, time-outs, meta-tags just disappearing— there’s always something potentially wrong. And it took a lot of time to even notice a problem, much less correct it. Now with Testomato, I would be able to set up a simple automatic test, and know about any problem that arises within five minutes. That’s incredibly valuable when you have a mission critical website to maintain.

Where did the idea for Testomato first come from? How did the company get started?

Jan "Honza" Prachar, Co-Founder of Testomato

Jan “Honza” Prachar, Co-Founder of Testomato

Honza: It was originally an idea from one of the founders- Michal Illich [StartupYard investor and founder of Wikidi]. We were struggling with setting up Selenium to test a few projects. We wanted something that would quickly and easily verify that a site, and all its components, were online and working.

It took a lot of time to configure and maintain, and many false alerts were reported. The time invested was really not worth the problems we experienced. But we still needed this kind of monitoring, so we came up with a simple solution for monitoring and supervising our other projects.

Marcel: My business partner Michal Illich wanted a very easy to use, but also complex and in-depth tool for monitoring his company projects. Testomato was the result of that. While it ran as a sort of side project for Illich and Wikidi for about a year, it became moderately popular among a group of web developers. While a lot of people had signed up and were using the service, Testomato still struggled to find a paying audience or a way to monetize properly. I was brought on board quite recently- only after Testomato joined StartupYard, and together we’ve been working on shifting our business model towards e-commerce, helping online retailers to make sure they aren’t losing business due to site outages and other problems.

Is this a competitive space already? What are some alternatives to using Testomato for website monitoring and testing?

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Marcel: There are a number of alternatives on the market. But they’re all either too simple, making them useless for monitoring a high value site, or too complicated to use. Some of the existing solutons allow you to monitor and control whatever you want, but they’re so time consuming, that nobody buy an IT specialist or a developer would bother with them. We are developing a tool that many different stakeholders can use effectively, from marketing, to IT, to QA departments, to ensure that they aren’t missing major site failures.

You’ve made some significant changes to your business model since joining StartupYard, can you tell us more about your current direction?

The Testomato Team

Roman Ozana, Co-Founder of Testomato

 

Roman:  One of the realizations we’ve made is that business owners like to use Testomato as a quick and simple tool keep track of the work of their developers. There are so many things to potentially keep track of on a site, that it can be impossible to do it manually.

Marcel: Well, we’ve made a lot of changes, as I’ve mentioned. A lot of changes still lie ahead.

Our target group has shifted from developers, to people with online businesses, and e-commerce sites. Testomato could be used by a marketing head to track campaigns, for example, or by an IT department to alert them to failures in a high-value site, like an e-shop with hundreds of transactions an hour. When your business depends on your website being reliable, 24/7, and processing hundreds of transactions, a simple error can cost you thousands of euros.

A site like that can’t afford a lot of unscheduled downtime- nor can any high-traffic site or page that generates revenue. We had to shift our pricing accordingly, because this new target group has different needs and expectations. We find that this group needs more comprehensive testing on just a few sites, which means much more work on our end, coupled with a very straightforward and intuitive user interface.

What are some of the functionalities and services you plan to offer in the near future?

Marcel: Right now we are talking about locations. Because Testomato monitors, checks and tests your website from the outside, we can also play the role of a test user. How does a site work from a particular location? Is it fast enough? Is it properly localized or not? Do all the plugins work in all locations?

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We currently have two regions – Europe and the USA, and as a customer you cannot pick-up one, we still do it automatically.  But this is something we plan to change. Many more sites and services now have to be location aware, and they have to function differently according to how users access them. Many site owners aren’t aware of how their services are functioning in different regions, and if they need to do more localization work. So that’s a key functionality we’d like to expand on.

Honza: Also we want to make design changes to help bigger customers configure their checks and projects more quickly. There is room for a lot of improvement, and we have a lot of feedback to work with. Making Testomato work well with a big website is a new challenge.

Tell us a bit about the Testomato team.

Marcel: We are a pretty happy team. We’re pretty quiet, compared to some of the other teams at StartupYard, but we’re happy too. Not many people right now – 2 developers, Roman and Honza, Monika, our product lead, and our lovely copywriter and social media specialist Elle. We have Irena, the link-builder, and me, the new CEO.

I should be leading the whole team, but because I’ve been with Testomato for just a few weeks, sometimes they are leading me. Thank you guys!

Honza: Marcel joined us a month ago and he is doing really great. He has already made several big decisions, so we could start implementing them and move fast. Many impasses were eliminated thanks to his experience.

I would say, and feedback from StartupYard and the mentors also confirmed this, that our team was not really ready to make the big decisions on our own. As developers, we just weren’t used to that kind of thinking, and we needed some help with direction. Since Marcel joined us, he has pushed us to move forward, and that’s really helped.

How do you plan to grow in the next year? What markets will you focus on in the near-term? 

Marcel: We want to be  a world-wide service, with strong added value for online businesses. For example, e-shops, banks or insurance companies could deploy Testomato on an ongoing basis, and save money consistently by spotting site failures as they occur.

But we’re also interested in web services and media agencies, because we can help them with many issues. If a web agency or media company knows about an issue before the client, that’s a good thing! Growth in total users might be slow for the near term, as we’re changing our focus, but we expect to grow our paying user-base substantially within the next year, and focusing on adding value for that group will help us get there.

Long term, what do you see as Testomato’s vision for the next 5 years?

Honza: We want to be even more active in searching for critical issues on a website. This means that Testomato won’t just test and monitor according to user requests, but also notify the user about possible security issues, problems with site ranking, even things like design and speed of loading for different locations and devices. There are a lot of points of failure for big websites, and they’re too many for any one person to monitor consistently. We want Testomato to be a much smarter and more engaging tool as well. Site testing can be boring, so it’s important that users see the value they’re being given.

Roman: Our ultimate goal is let you know about harmful issues on your website before customers even notice. We want to be a website watchdog, something like a security guard or a babysitter for your website.

Marcel: Testomato should start to be a synonym for monitoring and testing websites. It should be a “must-have,” like health insurance for the web. Something everybody knows about, and anybody who cares about their website will naturally use. That is my vision for the next 5 years.

 

Give Testomato a Try Today: Test Your Site in Seconds

Follow Testomato on Twitter at @Testomatocom

Meet the 2015 Startups: BudgetBakers, Stress Free Mobile Finance

BudgetBakers came to StartupYard with a unique problem. With a popular and highly rated app on the GooglePlay store, in many ways, they’d already won the “Game of Startups.” But like many startups, the growth hadn’t translated to profitability yet, and the popularity of their app, then called Wallet, hadn’t translated to the number of paying users they’d need to keep growing as a business.

Honza and Martin at StartupYard

BudgetBakers Co-Founders Honza and Martin at StartupYard

Beautifully designed and expertly constructed, the software immediately caught our attention. The team too, co-founders Jan Muller Martin Jiricka, were eager to take the next steps. Here’s Jan “Honza” Muller talking a bit about the BudgetBakers journey, before and during StartupYard:


Q: Hi Honza, tell us about BudgetBakers. Why did you choose to tackle the problem of personal finance and budgeting?

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A: Well, it all started 5 years ago. I just wanted to learn how to develop for Android- at that time it was a really new platform.

Also, I wanted to make an application for my personal use, to track my finances. I called that original application Wallet. Through the years, the application has become more and more popular, and more complex. It’s coming soon to iOS and a web app, and is already on android (the Android app is still called Wallet for now).

As BudgetBakers has grown, I’ve changed as well. Since I founded BudgetBakers,  I’ve started a family myself and become a dad. I’ve come to really understand the need for smart daily money management. When I quit my job late last year to work on BudgetBakers full time, that only reinforced my need for solid money management. That’s quite a motivator to get BudgetBakers right!

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Honza with his partner and daughter.

As an entrepreneur working for myself, knowing how much I have to spend, and how much I should spend on everything my family needs is really important- for me and for my partner. We need a smart way to make smart decisions as a family.

People are afraid to think about their budgets and the money they spend every day. But we find that once they get going, that sense of control and security is really addictive. It certainly is for me!

When we’re growing our families and our careers, we can come to let money concerns dominate our thinking. But we don’t think rationally or effectively about our money- we just worry about it uselessly and inefficiently. I’ve come to see what we do as a way of saving people from that trap.

So that’s how BudgetBakers grew into what it is today- more than an expense tracker, it’s your personal finance assistant. It thinks about every little penny, so you don’t have to.

Q: What makes BudgetBakers different from competitors like YouNeedABudget or Spendee? Why should people use BudgetBakers?

A: First of all, BudgetBakers is not just a mobile application.

We are constructing a fully integrated platform where people can learn how to get control of their personal finances, and gain peace of mind for today, and the future.

More than that, we want to go further than just helping people to track their individual expenses and manage their budgets.

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Managing money is an important family priority as well, and one that people have a hard time with, especially when they’re just starting their careers, and thinking about saving for a house, maybe a car, or that vacation over the summer.

You get your paycheck one day, and the next day it seems like everything disappeared. Where did it go? That can cause a lot of stress.

A lot of families aren’t on the same page when it comes to their finances- they don’t know how much they can reasonable expect to spend every month, much less how much to save for the long term.

So we’re not only perfecting personal finance via a fully integrated web-based, and mobile platform, but we’re also building in tools to encourage couples and families to begin cooperating to manage their money more effectively.

I don’t think you need to have a lot of money to be happy, but I do know that you need to have enough. That’s where BudgetBakers comes in- our platform helps people to understand what enough looks like. Are you sure you can afford that trip to the movies on Saturday? With BudgetBakers, you will be sure.

Q: A big hurdle for BudgetBakers so far has been gaining traction with users. What are the unique challenges you face in getting people to commit to your approach and platform?

A: We have 4.4 star rating on GooglePay, and we get about 1000 new users a day. We use the UserVoice platform to keep in touch with our users, and we’ve also recently hired a new team member to help with community management, blogging, and marketing.

That said, we’ve found from the beginning that our users need a lot of convincing to really start using BudgetBakers to the fullest. It seems like a big commitment, and it seems more complicated than it is. Part of the learning curve for us, especially at StartupYard, was to see how many opportunities we truly had to convince users to stick with the program, and we weren’t converting as many as we could have.

With the help of some awesome mentors and workshops, like Bogo Shopov on GrowthHacking, and Fiodor Tonti on UX/UI, we’ve had our eyes really opened to the opportunities we’ve been missing, and we’ve seen that we have a lot more room to grow and understand our users even more. That’s very exciting.

Right now, we are working on expanding our efforts in content marketing, and community building, to find new ways that BudgetBakers can reach out to its community and offer them tips, advice, and above all encouragement to make the right financial and spending decisions. There are a lot of people out there who need a little encouragement, and we want to be the ones to provide that.

Q: What do you think are the major blockers for most people when it comes to getting their finances under control? How can BudgetBakers fix that?

As I said, I think one of the biggest obstacles we have when it comes to getting people to take control of their finances is fear. People are afraid that once they open up their finances and take a look, they’ll be shocked at what they see. Sometimes they really are!
But we find that as people use BudgetBakers, they get comfortable, and they start to really enjoy the control they have over their spending. The stress in little spending decisions can start to go away, because they have a very good sense of what they should be doing with their money.

Maybe there’s a little extra in the restaurant budget this month. Great! Order a pizza, or take your girlfriend/boyfriend to a nice dinner somewhere. That’s a wonderful feeling, to know you aren’t cheating yourself when you do that. Control of your finances can make you feel virtuous and proud, and it makes you want to do better, and set better goals for yourself in the future, to hang on to that good feeling.

People have to “rewire” a little bit to make this transition, and that isn’t easy. They have to stop being so emotional about their money, and be a little more analytical- stop worrying and start thinking. BudgetBakers helps with that switch, but it can still take a big effort.

Q: Ease of use is also a major concern for any budgeting software. How are you planning to make BudgetBakers more intuitive and less work intensive?

A: We have a lot of plans on how to make our users more comfortable, and make the daily habit of budgeting and expense control simpler and more rewarding.

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Today we have a smart watch application which allows users to enter transactions even without taking their phones from their pockets. Also we have automatic bank statement parsing which works with a few Czech banks so far. We are working towards expanding that ability.

In the future, it’s important that we offer our users ways to integrate directly with their banks, making expense tracking practically automatic.

It’s a balance. With BudgetBakers, the value is in the peace of mind that it gives you about your finances- it reminds you to control your spending, and it keeps you honest about what you can afford, and what the best decisions for you really are. You need to engage with your budget on a daily basis, but you don’t want that to be too much work or too much stress.

There are ways that we would like to make things easier, and entering, sorting, and tracking transaction information automatically will play a big part in that.

Q: What’s your near-term strategy for growing BudgetBakers’ user-base, and how do you plan to keep new users as they join the platform?

A: Budgetbakers has already been downloaded over 800,000 times on the GooglePlay store. When we release our iOS version very soon, along with a substantial rebuild of the BudgetBakers platform, we look forward to adding a whole new group of users.

A lot of users is a great thing to brag about.

But as I said before, one of the things we really want to focus on is making budgeting and financial planning a daily routine for as many of our existing users as we can. We can still do a lot better in that area, and as new users discover the platform, they’ll also benefit from this work. If you do anything for 3 months, it can become a habit, and that 3 month metric is something we’ve been focusing on much more. Can we keep people engaged with their budgeting and financial planning for 3 months? If we can do that, the rewards to our users will extend to potentially their whole lives. We can do a lot of good with some very small, simple changes to the way they engage with BudgetBakers.

For example, a big takeaway from the StartupYard workshops, particularly with Fiodor Tonti and Bogo Shopov [ workshops on UX/UI and growthhacking], was that BudgetBakers needs to utilize the data we collect from our users, and make that part of our overall value proposition. People want to feel a part of a community, and be rewarded for meeting their financial and savings goals. Gamifying the platform and rewarding users with insights and advice is a big part of how we will improve our user retention, and help people to be more financially secure and independent.

Q: You’re based in the Czech Republic. What about the region represents a unique opportunity for BudgetBakers? What challenges does location present for the company?

A: BudgetBakers works anywhere- it works with any currency, and in about 25 languages so far. We have users all over the planet. Of course, because we’re based in Central Europe, this is where we are exploring our first corporate partnerships with banks, telecom providers, and others who can help us add more value for our daily users.

We have a large userbase in the Czech Republic, and that’s partly because of good word of mouth. It’s also because this region doesn’t have access to some of the largest competing platforms, like Mint.com, and because the market here is more fragmented, with more localized apps and platforms, tailored to specific markets.

In addition, banking and financial services are also more fragmented, meaning that building larger partnerships is a slower process than in places like the US. However we count that as an opportunity, to be the first to spread in a way that less ambitious projects haven’t managed to do.

There is no market leader in this category yet, particularly in Europe, so there is a lot of room for growth. Banks and telecoms are desperate for ways to add value for their clients, many of whom are choosing lower-cost, more mobile solutions. We are exploring these types of partnerships that add the value that people are looking for from their financial institutions, but are not yet receiving.

A lot of people (including StartupYard mentors) have challenged us on how “new” and “innovative” BudgetBakers is. There are a lot of expense trackers out there, and budgeting software is as old as spreadsheets. But you have to remember, that the mobile and financial technology that really adds value for end-users is still really new. In the context of business and government, legacy methods are fine, but users today want mobility, interconnectivity, and always-on functionalities. They want their software to work with them, not just for them. So it’s not a new idea, but it is a new way of looking at budgeting for many people.

Q: Tell me about your experience so far at StartupYard. How has BudgetBakers grown during your time here? How have your plans changed?

A:  By entering SY we had to slow down development of the new version of BudgetBakers and start focusing more on management, finances and defining the strategy that will bring us to next level.

At the beginning it was very unusual for me, because i was used to spending my whole day programming. I had to turn towards management, and that was a challenge for me. But now I have to say, it helped me to crystallize my vision in term of growth and success.

I’ve come to realize that our priority has to be our customer experience and our market strategy, instead of just building an ever richer feature set. There’s no use in creating the world’s most amazing software, if nobody is ready to use that software to make a positive impact in their lives. So we’ve had to adjust our attitude towards development, and grow up as a company and a team. That’s been an amazing experience for us, and we’re really glad we decided to do it.

Learn More at www.budgetbakers.com

Follow BudgetBakers On Twitter @BudgetBakers