Last week, we made the final stop on our 6 city, 5 country FastLane tour, meeting over 50 startups from The Czech Republic, Poland, Bulgaria, Romania, and Kosovo. In Warsaw, we FastLaned two more startups, giving them the chance to get ahead of hundreds of other applicants. In total, we FastLaned twenty companies.
Highlights from Poland
We had been hearing about the active Polish startup scene for forever, but Reaktor, run by Borys Musielak, was our first real chance of seeing it up close. Over 150 people packed into a house that is strongly reminiscent of an American college fraternity for their monthly OpenReaktor event, where 4 startups pitched to us, and 2 were FastLaned.
What do I have to have to get into StartupYard?
We heard this question a lot from Polish startups in particular, but it’s something many startups or entrepreneurs ask us when we’re on the road. Do I need a prototype? Do I need users? Revenue?
But this is really approaching the question the wrong way around. We don’t establish a minimum cutoff for the progress or stage of the startups we take, because every startups has a different path to take. We look at startups as potential partners. In our partnerships, it’s important that the accelerator can provide value. If we can’t, then there’s no reason for a startup to join us, or to let other startups know that we can help them too.
It so happens that we can most often help companies that are just about to or have already launched a beta product of some kind, and who have a few users or customers to boot. But we have also gone as far as to take a company with only an idea of what they want to do, as well as companies who already have a steady stream of paying customers.
Team and Traction
A really interesting female entrepreneur from India pitched us in Warsaw. She had approached us about pitching, but warned us that she had no product, no team, and no code. Just an idea, and a will to make it happen. She also had set up an MVP without any coding. And despite her having none of these things, she was so convincing, that we decided to FastLane her anyway.
So she asked me: “Thanks for that, but really, at what stage can this be something you’ll consider?” I answered that she had a month to show us how she can execute on her idea.
“But I can’t get a product done in a month!” she said. Well, of course not. And we wouldn’t expect that. But what we would expect to see, if we were to consider her for the accelerator, is some form of traction. People usually confuse traction for user growth and revenue. That’s not the whole picture for us.
Traction means evolution and progress. Where are you today, and where were you a month ago? If you’re the type of person who gets stuck, and doesn’t move forward because something is blocking them, then you probably won’t do well at an accelerator. You have to be willing to move where you can; to flow in the direction of what is possible, and deal with what isn’t yet possible as soon as possible.
How can a non-coder make progress on a technology project in a month? Well, she has to move in the direction of what’s possible. She can spend that time finding and convincing team members to join the project. At the same time, she can begin working on recruiting users for the day when she will have a beta product available. As I often tell startups: you do not need a final product in order to start delivering value to someone today.
If she can convince a team to join her on her quest, and she can convince future users that there is a great product on the horizon, and that they should be the first to use it, then she can earn a place at StartupYard on the strength of her personality alone. When we say it’s all about the founders, we mean it.
We wouldn’t exclude a team that didn’t have a line of code to show us, if the founder could go from an idea, to a team and a list of users in a month.
A flip side to this equation is probably the worst breed of startup out there: the Professional Startup.
These startups look great on paper. They can talk about their ideas, and they have a sexy concept, probably good UI, and a slick website. Maybe they have a few clients.
But there’s one tiny problem. They’ve been at that stage for years, and they’ve attended every incubator, accelerator, and startup challenge that would take them in that time. In our scouting for startups in the Central European region, we can spot these startups most of the time by their website’s emphasis on these “credentials.” One website had a timeline of programs and contests the startup had done, going back over 3 years.
The company had no feedback from actual customers. That should not inspire confidence.
This is most often what you’d call “fake traction.” It’s easier to talk to other startup people about your startup idea, than it is to talk to customers and sell your product. It’s sexier and more ego-boosting to talk to investors than to woo users and write content for your website. And I think many of these startups have the idea that the goal in startup life is to get scooped up by some magical acquisition before ever having to deal with the dirty business of doing actual business.
Or worse, they’ve been hoping all this time that the accelerators and incubators were going to do the work for them. No thanks.
But here’s a little secret: acquisitions of companies that don’t have any customers is rare. It happens, but it’s not a realistic goal for any startup. And anyway, if you’re acquired before you even get any customers, there’s not much chance that you’ll be acquired for very much- certainly it will be for less than if you get your hands dirty, and actually prove that you have some product market fit.
So what would we rather take? A 3 year old company with a sexy idea, a crack team, a nice website, and no customers to show for it? Or a woman who has never run a company before, but can pitch like crazy, and convince a couple of guys to help her get it off the ground in a month for no pay? We’ll take the newbie, thanks. That’s somebody we can really help.