StartupYard FastLanes two Startups from Krakow

We visited HubRaum in Krakow last week, and “FastLaned” two very interesting startups while we were there. This was the penultimate stop in our tour of 6 cities, including Pristina, Sofia, Bucharest, Prague, and next week, Warsaw.

While it was tougher to generate interest from Polish startups in StartupYard, we had expected this. StartupYard has never accelerated a Polish startup, and part of the reason is that Polish startups are a bit more spoiled for choice than their counterparts in Central and Eastern Europe.

But we encountered the same kinds of issues in Polish startups as we do all over Central Europe. Just like Romanian, Bulgarian, and Kosovan startups we’ve met, as well as our own Czech startups, communication and positioning of global tech products remains a failure point for Polish startups as well.

According to several of the mentors I talked to a HubRaum, the situation is not always helped by the fact that Polish startups are in a much bigger market than their Czech counterparts, meaning that they can avoid the problems of international competition for longer.

Accepting the Premise of the Question

One trend that I’ve noticed throughout our roadshow, and which was on particular display in Krakow, was founders’ generally being unequipped to answer doubts or hostile questions from the audience. We often call this a “non-question question,” and it usually consists of an audience member’s opinion –always hostile to the general idea or area of the startup– followed by a sort of “what do you think about that,” phrase to make it look like a legitimate question, rather than a statement.

For example, we had one pitch where a startup was working on a live-streaming social application for events. The question came like this: “Don’t you know that there are serious privacy and copyright concerns when it comes to live streaming? Don’t you worry that you’ll be sued?” This is marginally a question, but it was obvious that the person asking it was down on the idea, and wanted to point out a “fatal flaw” she had discovered. This is often the case: a doubter seizes on one issue surrounding the technology or the business, and seems to declare that therefore it will never work.

There are two ways to answer a question like this, but most startups don’t know them. First, you can accept the premise of the question, meaning that you agree that the problem does exist as described, and then talk about how and why that problem can be overcome. This is a difficult way to answer a non-question, because it acknowledges that the doubter is correct, and then takes an uphill route to show why this doesn’t matter as much as they think.

In my example above, the founder could state that while there are privacy concerns, the app would somehow have privacy protections built in, or would not be allowed to be used in such a way as to disrupt anyone’s privacy. A similar answer might be found for copyright concerns– perhaps there is a legal reason why livestreaming events is considered legally ok, or perhaps there is another solution.

Don’t Accept the Premise

The second way, which is much safer but less often practiced by startups, is to not accept the premise, and answer the question on your own terms. That answer looks like this: “this is a new area of technology, and concepts of privacy and copyright are quickly evolving. Clearly livestreaming will be an important area of innovation in the future, and we are working on the best and most responsible ways of bringing that technology to our users safely and legally.”

This is a non-answer for a non-question, but it is also generally the best answer. Just as the questioner does not know what the legal or social situation will be in a few years, neither do you. If technologists and inventors let themselves be stopped by the possibility that what they’re doing may lead to some legal wrangling in the future, then they really shouldn’t be working on new technologies at all. Disruption is exactly what it sounds like- it doesn’t go with the flow.

“Nobody Will Notice”

This is probably the worst possible answer to a non-question, but it’s one we’ve now heard at least twice from founders pitching on stage. We hear it even more in private meetings with founders. The founder accepts the premise and accepts the outcome suggested by the non-question. There is nowhere else to go, so the founder simply says that for whatever reason, nobody will notice, and everything will be fine.

Obviously this doesn’t inspire much confidence. The founder is basically saying that their technology is non-disruptive, and will never be interesting or popular enough to bother anyone. If it is a live-streaming app, it will never have a lot of fans or make a lot of money, meaning that anyone with copyright or privacy concerns won’t have much to worry about.

That’s obviously not the road you want to go down when pitching your ideas. So go with option two, and don’t accept the premise of the question in the first place.

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.