Viktor Fischer Named StartupYard Executive in Residence

We are pleased to be able to announce that Slovak entrepreneur Viktor Fischer, late of McKinsey & Company, and co-founder of Innovatrics, an industry leading biometrics company, will join StartupYard as 2016’s Executive in Residence. Viktor will follow 2015’s Executive in Residence Phillip Staehelin, who pioneered the role for StartupYard.

Viktor Fischer has been an active StartupYard mentor and workshop leader for the past 3 years. Viktor recently left McKinsey to found an innovative new club in Prague, and to focus his attention on mentoring and investing in Startups. He joins the StartupYard team as our second Executive in Residence, following the tenure of Philip Staehelin in 2015.

What is an Executive in Residence?

Viktor Fischer with fellow mentor Ondrej Bartos

Viktor Fischer with fellow mentor Ondrej Bartos

We see the role of Executive in Residence as a vital role in the acceleration process. The Executive in Residence is a StartupYard team member who is not directly involved with promoting or running the StartupYard program, and is therefore free to focus their attention solely on the startup founders, helping them to get the most out of 3 intense months of acceleration.

Viktor will serve both as a model of an executive for the startups that join the accelerator, showing them how his decision making process works, and also a supportive member of each team, providing feedback and advice on an ongoing basis. His role will be to compliment and enhance the mentorship that teams will receive throughout the program, and help the startups to follow through on their goals.

Having a trusted, close advisor can keep startups focused, improve their confidence, and give them the necessary backup to take on tough decisions, avoding the underthinking or overthinking of problems. It can help founders to absorb critcism and feedback, without feeling judged or isolated in the process.

StartupYard Managing Director Cedric Maloux had this to say on Fischer’s appointment to the position:

“Following on Phillip Staehelin’s very persuasive proof of concept for this role for StartupYard 2015, we expect Viktor to be exactly the kind of experienced, hands-on leader our startups need. The Executive in Residence should be a communicator, an advisor,  a mentor, and a general positive influence to keep our founders forward thinking and motivated during our program, and beyond.

Viktor is a hands-on, get-it-done leader, who knows how to listen and be a strengthening presence for others. That’s the kind of thing that our startups can emulate, and draw inspiration and confidence from. Startup founders need mentors they can rely on and trust to be honest with them, and to back them up. That’s what Viktor is going to excel at.”

On his appointment, Viktor stated:

“I’m impressed by the legacy that Philip and the team have created, and I am excited to take on the EiR role. Being an entrepreneur is not easy. The constant process of switching between big-picture thinking, and immediate urgency, requires ruthless prioritization, and the rollercoaster of good and not-so-good news requires nerves of steal, and an optimistic attitude.

Aside from helping startups bring structure and clarity on sorts of business issues (product/market fit, value proposition, pricing models, sales growth, raising capital), I will act as a moral support for “oh shit, what do I do next” moments. In addition, I will try to increase Startupyard’s reach and relevance internationally, bringing us closer to becoming the “Y-Combinator for CEE”.

StartupYard’s 2016 Open Call: Visualized

StartupYard’s 2016 open call has now closed, and we’ve collected over 300 applications to StartupYard.

300 applications represents a 30% increase over the application rate for last year’s program, and a 200% increase over the number of applications for StartupYard 2014, the first cohort which was run by our current Managing Director, Cedric Maloux, and the first time that StartupYard began focusing on startups with global ambitions.

Where are Applications Coming From?

For that 2014 cohort, the vast majority of applications to StartupYard came from the Czech Republic. But over the last two years, as the number of applications have increased, so has the geographic diversity of startups interested in acceleration. As before, the majority of our applicants come from the Czech Republic. Here is a visualization:


Interestingly, last year the Czech Republic and Slovakia represented a supermajority of all applicant countries. This year, the Czech Republic remained the majority, but Slovakia was surpassed by several others, including Russia, Poland, Romania, Italy, and Ukraine, among others. This was a surprise, but highlights the trend towards startups looking outside of their own ecosystems for accelerators and investors alike.

Here are the applicants, without the Czech Republic:



For the first time, StartupYard had applications from Poland, Germany, Belgium, Spain, and France. We also saw applications from as far away as India and Hong Kong, as well as an increase in applicants from the East, including Russia, and Ukraine. Romania continued its trend of increasing applicants: we have taken Romanian startups in both of the previous two cohorts, and we have made three recruiting trips to Romania over the last year.

Which Country has the Biggest Appetite for Acceleration?

As with last year, StartupYard shared an application pool of over 700 startups with CEED Tech, a consortium of 5 accelerators in Central Europe. The syndicate garnered applications from every country in Central Europe and from most countries in Europe. Here is a visualization of the full application pool by country of origin:


Here, Slovakia does make a big appearance. Slovakia generated more applications for all the CEED Tech accelerators than any other country. But whereas last year, Slovak startups applying to StartupYard outnumbered all other countries combined, this year, the distribution was much more even.

Poland, Central Europe’s biggest country, did not account for many applications. Still, this is the first year that we have ever received applications from Poland at all. Our two trips to Poland this year to promote StartupYard supported the idea that the Polish ecosystem is somewhat insular, and startups in Poland are less likely to seek investment and acceleration elsewhere.

This is not necessarily surprising: Poland’s size as a market gives startups more local opportunities, and fewer reasons to launch startups globally, whereas smaller market startups like Estonia, the Czech Republic, and Slovakia are forced to be globally minded, because their home markets won’t support sustained growth.

What are Startups Interested In?

Our applications included a set of keywords for each startup, which represent their areas of interest generally. Here is a visualization of those keywords:


Mobile, data, education, media, and analytics make big impressions in this graphic. There is sustained interest among startups in pushing more use cases for mobile apps and smartphones, and this includes another big keyword: advertising.

While StartupYard doesn’t consider startups that are built on an advertising model (meaning ad-supported business models), we do see many applications for mobile optimization of advertising and marketing processes. As pressure has grown on media and communication companies to monetize their mobile users, ad-tech has become of increasing interest for startups.

There was also an increase in applications around the fields of health and wellness, as well as medicine, over previous years. We are seeing more startups who are interested in leveraging IOT devices and mobile interfaces to improve health and fitness, and promote wellness generally. While these companies have diverse approaches, they typically are being made possible by the pervasive nature of mobile computing and internet access now available.

Also, somewhat surprisingly to me, we saw a sharp decrease in the number of consumer SaaS products and social platforms coming from startups. Is there a feeling that the booming consumer app market has become saturated over the past few years? Certainly, the number of speculative social networking and dating apps decreased significantly in comparison with previous rounds. We received only a handful of such applications this year.

What Startups are Working On

This is not to say that startups are not still working on platforms and apps. The vast majority are still focusing their development on mobile solutions, but with a noticeably broader set of approaches to different markets. Startups are finding value propositions in supporting an already complex array of platforms and services currently available. Here is a breakdown of the words that appeared most often across all applications:



Clearly social, mobile, and apps remain important topics. But “platforms” now represent the most common piece of jargon for today’s startups. This is not surprising, and it’s a trend we’ve been observing over the past few years as well.

While talk was always about apps a few years ago, as cloud services and consumer access to smartphones and tablets has become nearly universal, startups generally have begun to see themselves as selling something more than software.

When app stores first premiered, the interest was in leveraging the technology that people had in their hands. What could a smartphone do? There were many exciting new applications.

But today, 8 years after the premier of the iPhone, leveraging a smartphone’s hardware is much less of a focus. In order to engage users and continue to provide them with value, startups are focusing on building platforms on which services can be integrated and extended to meet consumer needs continuously. Companies like Uber, AirBnb, WhatsApp, Dropbox and Facebook leverage mobile technology by building connections between people and services, people and information, and people to people. The value of smartphones has become their ubiquity, not their internal computing power.

Gone are the days in which startups thought of getting a million downloads, and serving ads to make money. Today, consumers are looking for a continuous value proposition from mobile products, and are more prepared to try different solutions. As markets have become more crowded, unintegrated one-off products have become less viable. Consumers are less willing to pay just for software, but want a product that will evolve with their own needs.

At What Stage are Startups Applying?

It’s quite difficult to precisely pin down a startup’s stage of development in a written application. Many are great at talking about their ambitions, but have little work actually done. Others have executed a lot of development, but are not very clear on the direction they will take as businesses.

We asked a simple question to try and gauge startups in terms of their general development:


What we found was that the majority of startups applying are not incorporated. This really demonstrates the value that accelerators can bring to young companies.

We don’t generate ideas or inspiration: we accelerate them. We help startups make themselves into real businesses, so it’s not a surprise that many who apply are not yet thinking of themselves as businesses at all. Making the leap from an idea, or a prototype, to a business is one you have to take with a running start- exactly what startups will get with StartupYard.

5 Questions To Ask Before Sending Any Marketing Email

Recently, one of our startups got a big boost of incoming users. I asked the founder, “what did you do to take advantage of the situation?” “We increased promotion in our channels,” came the reply.

Alright. Well, as we discussed recently, there is a big difference between user acquisition, and user retention. If you suddenly find yourself with a big group of new users on your hands, you have to be focused on retaining them. Andrew Chen pegs the most vital period for activating and retaining users at just 7 days from app install, for mobile apps.

Chen is right when he says that customer lifecycle emails are not the end-all for customer retention or activation. But they can play an important supporting role, particularly if your product has anything like a learning curve involved- that is, if it takes users some time to understand how they can really use it.

Customer retention can be aided even within the first visit, if the onboarding process establishes behaviors and patterns that can be activated again later on. You can show users what life will be like with your product, and get them to “buy in,” by doing a few things right away.

But once you have established a relationship with a user through the product, you will probably want to make use of some smartly timed email marketing to further activate and convert that new user.

After talking with the founder, and sharing some typical email activation and conversion strategies that I have picked up over the years (which I think I will write about more in another post), I thought it might be a good opportunity to pose some important questions that startups should ask themselves before sending any marketing email.

No matter what kind of email you’re sending, these questions can force you to examine the purpose, the content, the goal, and the timing of any marketing email. They are as follows:

1. What Is the Goal?

Before hitting send, ask yourself what you hope to get out of this email. Do it not just in the sense of what your ideal reaction to the email is, like “I want the user to know about a specific feature we have,” but in terms of what the campaign as a whole is meant to do.

Make sure that the email has a goal that is trackable. “Informing our users about a new feature,” is not an easily trackable goal. But it is trackable if, for example, you give those users a way to show they know about the new features, or if you track user behavior before and after the email is sent and read.

This should lead to a few more questions: do I have a success benchmark for this email? Open rate? CTR? Conversions? Hits on a landing page? Engagement with the product? Do I have an easy way for the users to react to this email? Is there a clear CTA (more on that later)?

Try as much as possible to tie the email to some real data points, and to have some expectations for what it will accomplish. If you meet those goals, you can use the experience to replicate the good results. If you don’t, you can look for specific problems, or ask someone else for their input on where it all went wrong.

2. What is your Claim?

Every marketing email -in fact every email- has a basic “claim,” and often more than one. A claim is a statement of fact, or values, which you hope will be received by the person who receives the email. A claim doesn’t have to be said in words, but it has to be felt. It has to come out of reading the email, that this is the reason you are communicating with the user.

Try and spot the claims in this fictional marketing email:

Dear Lloyd,

It’s that time of year again! The leaves are turning, and the snows are inbound! And here at XYZ Inc, we’ve been working on an exciting new way to keep you warm during the coldest months.

Check it out here. Get a special discount of 25% if you purchase before Nov. 30th!


XYZ Inc Team

Wow, well I’m definitely intrigued here. So what’s the claim? I can spot a few candidates:

1. You need this product for the winter.

2. We are a cool innovative company.

3. Our products are affordable.

All that was accomplished without directly saying any of those things. But these are very clearly communicated claims.

The claim can be many things. It can be something really simple, like “we care about you.” Or it can be “this new feature will make your experience better,” or “we understand you and your problems.” It can be very direct: “you have 6 days left before your plan expires.” It doesn’t ask users to do anything- that’s for later. Instead, it is simply the broader message of the email.

Try, as an exercise with yourself, to put your claim into clear and specific words, in your own thinking, before you send the email. Ask someone else to review the claim, and tell you what they think it is.

When we are writing community emails to mentors, teams and our community, StartupYard Director Cedric Maloux and I often start with that question: “What are we claiming here?” Then we make a bullet point list of claims we could be making, and we choose the one that is most clear and true to us. Then we make sure that our communication centers around that claim in some way.

So, what is your claim? Force yourself to answer that question clearly.

3. Where is the CTA?

The CTA, or Call To Action, is the thing you will ask your user to do, once they have seen your claim. There is a clear CTA in virtually every email I write- even personal emails. Marketing tricks are, after all, just systems for thinking about normal means of communication.

A CTA is usually directly tied to the goal of the email. What do you want the user to do now? Do you give them a foolproof way of doing it?

I don’t want to speak in absolutes, but it’s difficult to imagine an effective marketing email that doesn’t contain some kind of CTA. A CTA doesn’t strictly have to be a button or a link either. You can have a CTA that doesn’t even lead to your product or site (although the results of such a CTA are harder to track).

A common mistake is for a CTA to be too vague, or to be too complicated. “Please share this on Facebook.” Ok, but where’s the share button? Where’s a link to let me do that?

And another common mistake is to not inform the user of what will happen when the CTA is followed. This is a common reason why people don’t follow CTAs- because they don’t really understand what is being asked of them. Emails come in, and because the author was concentrated on getting the CTA out there, it appears at the top, possibly with several exclamation points:

“Dear User,

Click here right now it’s amazing!!!

Not only is this a pretty good way of getting yourself caught in a spam filter, it also just doesn’t really work. People want to know what they’re really being asked to do before they decide to do it.

You need to set up a CTA with some context, and possibly follow it with some reassurance:

“Dear User,

You may be interested to know that we just added a really cool feature we think you’ll like!

Click here to check it out. It’s a way of sciencing your tech using tech science. Cool right? “

Very cool. I’ll check that out, because I know what I’m being asked to look at.

4. What Time Are you Sending this?

This is as much about understanding your own users, as following any specific rules. Will your users get your email at work or at home? How old are they? How late do they stay up? How early do they rise? What time of day are they likely to follow the CTA you send?

Anyone who’s ever received pornography and viagra spam emails knows that they come at night, because that’s when spammers think you’re just loose enough to give them a look. Well, they do that because it probably works.

So take a look at your user’s behaviors, engagement times with your product, and the data you’ve gathered in the past in order to time your emails to maximum effect. Don’t be afraid to experiment! There’s no rule about this. It’s whatever works.

5. Who are you sending this to?

Just as important as what, and when, is who. A really common problem with startups that are growing their marketing efforts via email is that they don’t pay enough attention to grouping and categorizing their users, and sending emails that are likely to have the highest impact for those user groups.

For example, do you ever wonder why so many online services ask for your birthday, despite the fact that there is no conceivable reason why they should need to know it?

Recently i was suggesting to one of our startups that they try a “Birthday Campaign,” which is an old favorite of email marketers, and it goes like this: On the user’s birthday, you send the user a limited time discount offer to upgrade/extend/buy your product, but only within the next 24-72 hours (the details depend on what your goal is, and how long it should take a person to make a buying decision).

It turned out the founder I was talking to was not collecting birthdays in his onboarding process. Too bad! He should start doing that, and see if he can do something with it.

But that’s not the only way to go about it. Companies collect birthday info because they know that people spend more on or around their birthdays and, crucially, they ask people for things they want. Parents give kids money on their birthdays, as do grandparents, and spouses drop hints to each other about what they might like.

And there are lots of personal details that can be taken into account. Should your Christmas campaign really include customers in Israel? Should your back to school discount reach users in their 30s? Should your valentine’s day campaign go to single people? You don’t have to collect an extensive survey on your users in order to learn at least a few things about them, but those valuable bits that you do know can make the difference between a successful campaign, and a flop.

Patrick Riley, of the GAN, visits StartupYard

Last week, in a private meeting with StartupYard mentors and team members, Patrick “Pat” Riley, CEO of the GAN (Global Accelerator Network), hosted a Q and A, and presented GAN’s vision of the current and future landscape for tech accelerators worldwide.


Riley presents to StartupYard Mentors

Riley, who began his startup career at a startup helping hospitals and medical centers to provide affordable medication to underserved communities, joined TechStars as Director of Business Development in 2011, launching the GAN the same year. Today, the GAN spans 6 continents, and includes over 70 selected accelerators in over 100 cities. The GAN is a selective network of accelerators, including the top 3-4% of accelerators worldwide, that together have accelerated 2500 companies in 4 years, together raising nearly $1 Billion in financing, and creating over 11,000 new jobs.

Gan_infographic copy

Pat visited StartupYard’s homebase at Node5 Thursday, meeting with half a dozen StartupYard startups.


Here’s what he had to say about central Europe as a whole, and about the startups he met:

“Central European startups are incredibly unique. They have very strong technical skills, the wherewithal to think about other markets on Day 1, and a laser focus on building products that solve a personal problem. We’re also seeing groups like Microsoft set up their development shops in Central Europe because of how inexpensive salaries are in the area – and startups are taking advantage of that as well.  Because of all of this, we’re seeing the Central European startup scene evolve and develop in very positive ways.

At the same time, there are headwinds facing these startups. First of all, capital is scarce. In the entire Czech Republic there are just a few early stage venture capital firms [ 2 of which, Credo Ventures and Rockaway, are both StartupYard investors]. For a country of 10.5 million people, there is a giant opportunity for greater funding sources.

Secondly, cultural, linguistic, legal and market differences plague many Central European startups. Starting in another neighboring market isn’t anywhere as easy as doing business in another state in the United States. That neighboring market in Europe is a completely different country with different currencies and regulations – making it very difficult to set up shop easily.

Third, while not all Central Europeans are this way, many are missing the “sales” side of their business. I heard over and over again how a customer’s problem was going to be solved technically – when in reality the tech is amazing– it’s the presentation that is lacking.

What many European startups are missing is the ability to sell their product well. During my meetings with startups, I asked many of them what was the vision for their startup, with the answer typically being around how the product has some cool feature. To sell investors, customers and partners, Central European startups need a vision about how they’re going to change the world – and why anyone should care about their startup – because unless you sell me on your vision, no one else is going to.”


The Need for More Institutional Investors

During his presentation at Node5, Riley mentioned the increasing role that accelerators have played in recent years as drivers of investment. Considering that startups have an average lifespan, according to Riley, of a little less than 8 months, early stage investment is one of the most common points of failure for startups across the board.

Former SY Executive in Resident Phillip Staehelin

Former SY Executive in Resident Phillip Staehelin

Riley discussed efforts that other accelerators, like Y-Combinator and Techstars, have made to bridge this gap in early financing, either by increasing the availability of convertible notes for companies who attend their programs, or by creating follow-on funds for their own startups.

Shifting Roles of Accelerators

Riley also discussed the shifting roles of accelerators on an east to west axis. Accelerators in Eastern and Central Europe continue to function much as those in California and Western Europe have for over a decade, as nurturing environments for entrepreneurs to grow their networks and experience level, as they test out and perfect their products and go to market plans.

StartupYard mentor Amit Paunikar

StartupYard mentor Amit Paunikar

But as accelerators in the West have matured, and competition has become more fierce not only between startups, but also between accelerators (as well as now between accelerators and other early stage investors), they have also continually provided more funding, been more selective, and offered less and less in terms of the kind of support that accelerators had been known for offering. Workshops, training, and team building have been reduced in favor of more intensive mentoring, and more focus on pitching and business planning.

This confirmed the experiences that Ales Teska of TeskaLabs, one of our startups from 2015, described in making the transition between StartupYard, and TechStars London. Riley pointed out that in countries with fewer institutional investors, and less “startup IQ,” awareness of how to work with and deal with startups is still a major roadblock to success, for which more “hands on” accelerator programs are still needed.

The Role of Mentors

According to data the GAN collects, up to 90% of startups accepted at accelerators are recommended by members of the accelerator community, particularly by active mentors. This again confirms our experience at StartupYard, where many, but certainly not all of the standout applications have come from personal referrals.

Knowing Your Numbers

Startups are all about numbers. Churn, burn, runway, ROI, CPC, ARPU, CAC, LTV, DAU, MAU, and so on.

There are a lot of metrics and KPIs that startup founders are expected to have at the tip of their tongue, every time they talk about their startups. But there’s a good reason. These numbers are meant to give you an unbiased view of your business. If you don’t know what they are at this exact second, well, don’t panic!

Here we won’t so much cover which numbers are most important. Each team, and each member of a team, should have their own metrics to watch. This post is going to be about how to keep and use your numbers in as productive and non-misleading a way as possible.

Focusing on the Right Numbers

Startups can easily fall into the habit of deceiving themselves, and inevitably others, with their own data, by only focusing on the data that sounds positive, and on positive ways of presenting it.

Startup founders will tend to hone in on the metrics that they know are improving over time, and ones that sound impressive without much thought or context. For example, I’ve seen startups ignore monthly active user numbers, but constantly talk about the number of their downloads in the app store or on Google play.

And no surprise- the cumulative number of downloads never goes down, so it always paints a sunny picture- even if that picture doesn’t mean anything. Savvy investors know this very well, and they’ll see through it in an instant.

So beware of vanity metrics: number of downloads, visits to your website, number of followers, number of likes, etc. These numbers rarely if ever go down, and they don’t give any useful information about present conditions. Much better are numbers that can change quickly.

First Things First

You have to focus on numbers that you can actually improve, and you should focus on improving one KPI at a time. Overall, there are really only a few indicators that matter most in the life of a young startup, and they are linked: user acquisition, user retention, and conversion.

If you don’t have a handle on these numbers, then fiddling with other metrics will make far less of a difference over time.

Acquisition -> Retention -> Conversion

When a VC or angel investor asks for your “traction,” while they might be interested in several data points, these are three numbers they’re definitely interested in first. How many users find your product (acquisition), how long do your users stay with your product (retention), and how many of the total users are willing to pay for it (conversion)?

Why in that order? First, the sales funnel starts with user acquisition. You need users in order to begin thinking about retention and conversion.

You can’t optimize your sales funnel without having some users in it already, so while acquisition comes first, it can’t be the first focus. Early user acquisition doesn’t have to be expensive. It can be organic and relatively low cost. You shouldn’t invest lots of money in a non-optimized sales funnel anyway.

Early users are often early adopters, or those who can reach in your own network. But over time, you will be looking for a wider market, and you may have to spend more at some points to get users.

Once you have users, you have to focus first on what you *can* optimize, which is your user retention. How many people leave your product after the first month? If they stay a month, how much longer are they likely to stay? Your retention rate has a huge impact on your ability to grow your userbase, and eventually revenue. 

User retention, more than conversion, is key to building an audience for your products that really lasts, and knowing these numbers in intricate detail is vital in making your case to investors. If user retention is very low, then the work of acquiring new users will not only never get easier, it will continually get more expensive.

Why? Because if you want to scale and grow your revenue, you’ll have to continually spend more and more to acquire new users, all while fresh users become rarer. Investors want to see the opposite trend: as your userbase grows, user acquisition, on average, should get cheaper and easier.

Keeping more of the users you acquire will, over time, provide a larger population of users to convert to paid products, or cross-sell to other products, or any other of a hundred monetization strategies.
Plus, with a higher population of users, you can find ways of driving down acquisition costs, and can achieve more positive word of mouth, better search ranking, more visibility on social media, and many other advantages.

Once you have optimized user retention, and you are keeping as many of your incoming users as you can, you can start working on both ends of your sales funnel, bring more users in, and converting more of them to paid products, like subscriptions.

But focusing on converting users, when your retention numbers are low, will yield few results, and over time, those results will diminish without strong retention numbers.

For a lot more on this kind of problem, you can check out AARRR by Dave McClure, which is an insightful and hilarious collection of tips on what metrics to look at, how to track them, and how to think about them in a startup.

Here is the core AARRR acronym he uses:


Staying On Top of Things

I encourage startups to build a small “dashboard” of their basic metrics using Google sheets or charts, and keep it constantly updated. Over time, new metrics can be plugged in as they become a point of focus. An early stage startup might worry about user retention, whereas later on, the user engagement figures might be more important. It’s important to put an emphasis on the numbers you can actively improve, and to contextualize your work based on the numbers.

Don’t start tracking things only *after* you’ve made a change. Start tracking it before the change occurs. Progressions are far more important than numbers without any context: what was that number last month, compared to this month? How has it changed? What is the growth curve? Is it static? Is it dynamic? Those are things investors will want to know, and things you need to know to be sure that what you’re doing is having any effect at all.

And by keeping all your KPIs in one place, you can get a reasonable overview of the business whenever you need it, or whenever someone asks you a question about any particular KPI.

In the hierarchy of bad answers to investor questions “I don’t know,” is not the worst. You can’t know everything all at once. But once you give that answer more than once, consider making it a part of your overview from then on. There’s nothing more frustrating for an investor or a mentor than to ask a startup about the same metric over and over, and have the answer always be the same. If they’re asking, it’s probably important information for you too.

Giving Your Work Meaning

Focusing on how numbers change over time can affect the way you work. It can make you aware of weaknesses, and it can alert you to hidden strengths.

For example, a startup at StartupYard was planning to completely re-work the onboarding process for their mobile app. They planned to introduce a mandatory trial period for the product, and were trying to improve the conversion rate to their paid product.

So I asked the founders: “What have been the current conversion rates over the last few months?” Silence. Then, “well, they will be different once we introduce the new onboarding, so we’ll track the improvement from then.”

These are smart guys, definitely. But they were so focused on building the thing that was going to convert more users, that they didn’t even bother to check whether it actually would accomplish that goal.

But once they took a look at the data, they were able to see a clear, measurable improvement in the numbers they were targeting. When this startup’s team did start focusing on the conversion numbers, they used that focus to steadily improve their conversion rate over a longer period. Last we spoke to them, the conversion rate (and therefore revenue) was significantly higher than they had originally hoped- and that owed to how much focused work they had put into improving that metric.

I believe that if they hadn’t been focused on the conversion metric, they would have implemented those changes and moved on to something else. If their conversion rate had improved then, it would have been no better than a coincidence. But their focus on the numbers motivated them to keep improving over time.

Central Europe Accelerator

The 4 Ways Applications to StartupYard Fail, and How to Avoid Them

With just 9 days left for Startups to apply to StartupYard 2016, we’re going to share a little secret with you.

One of the questions we often get from would-be applicants is: “what do you focus on in the application? What is going to make me stand out?” The answer is of course: “the team, and the problem you’re solving for customers.” That encompasses most of what we care about when looking at written applications to StartupYard.

Aside from that, we’re looking for your sense of awareness. Who are your real competitors? Where could you be in a few years time? What is the grand design?

And here comes the secret: virtually *any* idea with a technology component and a global market could pass the first 3 rounds of our 7 round application process. That’s not to say that getting into StartupYard is easy. We ultimately accept fewer than 3% of applicants to the program. But the vast majority of applicants never get past the first 3 rounds.

Failing at the Easy Stuff

The fact is that if you’re asking us what you need to do to get to an interview with StartupYard’s selection committee, you’re well on your way to getting the interview anyway. We look for people who don’t wait in line patiently. We look for people who ping us via email and come to meet us in person, and treat this process the way we hope they treat everything: as a challenge that can be hacked and optimized, and overcome through hard work and critical thinking.

As part of the pre-screening process for StartupYard 2016, we have already begun reviewing submitted applications. As always, this process is a scary one. We have to make big decisions based on a small amount of data. And that only gets worse when applicants don’t bring their A game to the application process.

Most startups who apply fail at the easiest part of the process. The application takes, conservatively, 2 hours to fill in. But we know that if a person can’t muster the energy to project ambition, focus, and passion through such a broad set of questions, then they aren’t likely to be the kind of founder we are looking for in the first place.

Still, we know that some people just never shine on paper. There have been plenty of applications that have left us very unsure in the past, only to turn out to be from startups who, once the lights were on and the Skype camera rolling, blew us away with their energy and focus.

The sad truth is that there are undoubtedly those who never make it that far, but who probably deserve to be heard.

4 Ways Applicants Fail Before they Start

There are a handful of common failure points for written applications. Here are the ones that will get yours trashed the fastest:

  1. The Grocery list application

Many founders are engineers, and engineers think in peculiar ways. These applicants treat the application like a dumping ground for data, instead of a medium for communication.

So in response to, say, a question about traction, we’ll get a list of data points with no sense of what they are connected to: “50% growth in user acquisition via social media in first 3 months,”

That’s nice, I’m sure, but it doesn’t tell us much.  How much did they spend? What was the original number? A narrative response is helpful for reminding yourself that you’re not talking to somebody who knows anything about you, your product, or its history.

Treat the application as you would an email to an investor. That’s pretty much what it is. Introduce the concept, talk us through the basics, and establish an argument and a narrative as you answer the questions, as to why we should accept your team. If it’s a list of numbers, they may make sense to you, but they won’t mean anything to us.

2. N/A

If we asked the question, assume it means something. Assume it’s important to us, if not to you. But many applicants leave questions blank, or answer “N/A.”

None of our questions are inapplicable. If we ask whether your team has worked together, and you haven’t, then that doesn’t mean the question doesn’t have an answer longer than “no.” How about: “We haven’t worked together, but we know each other because we had mutual friends in X industry, or at Y club or community event.” Tell a story about how you know each other. It isn’t hard.

One of the worst questions not to answer is about traction. We simply don’t take companies that have no traction. That’s because “traction,” is really about more than revenue, users, or sales. It’s about the company as a whole, changing and growing from one month to the next.

Tell us what you’re doing, even if you’re not adding users or making any sales yet. Every company has traction of some kind: “talked to 50 target customers,” or “developed prototypes,” or “raised 5,000 Euros from friends.” That’s all traction. “6 Months ago I had an idea, 3 months ago I found a co-founder, and now we have a business plan and are working on a prototype.” Great. Each of those things move a company forward, and are a kind of traction we want to hear about.

3. The Non-Answer Answer

One of the biggest red flags for us on an application is an inability to connect with the questions being asked.

And I would say the most common question to get a “non answer answer” is the question: “What problem are you solving?” Out of 10 applications, I would estimate that about 3 answer this question in a remotely straightforward manner.

This is of course not a problem with just startups. It’s human nature to answer questions according to what one thinks the questioner really wants to know. Often startups spend a lot of energy justifying their idea by talking about the market, because they think that’s more interesting to us.

But this tendency can cause people to avoid answering the question that is being asked, which is about what problem customers actually have, that you will solve. Many applications jump into a sales pitch which states every benefit their product offers, without addressing the basic problem it is solving.

What problem are you solving? “Well, we allow customers to something something 5 times faster and 3 times cheaper than something something, and we do it using the latest something, which is 30% more efficient and better for the environment than something something.”

Fantastic, but what is the problem? Is the problem that the competition isn’t fast enough? Not cheap enough? Not good enough for the environment? The problem you’re solving says everything about what kind of company you are, and who you want to sell your product to. Is it for people looking for something cheaper? People looking for something more powerful? People looking to save the environment?

A litany of benefits is not a coherent argument in favor of your product. Nor is the size of the market. Those benefits have to be worth it, to someone, to pay for. If not, no matter how big the market is, you won’t be a part of it.

Consider the Consumer

Just consider yourself and your own behavior as a consumer. Do you use Uber, or DropBox, or Google? I’ll assume you use at least one of those services.

Now, some reading this may not remember the first time they used Google, because it’s been a part of the internet since they can remember. But I do remember my first time using it, in the 11th grade. It was just after 9/11, 2001, and I was looking at Yahoo news articles, trying to find information about the terrorist attacks.

“What happened to that 3rd plane they were talking about on the news?” I asked a friend on AIM (this was before the days of Skype). “I can’t find anything on Yahoo.” All my searches were returning bad results. It’s hard to remember now that a search engine couldn’t always be counted on to read your mind.  “Google it.” “Huh?” “Google it, with Google, it’s the best way to search stuff like that.”

And so I, like a few billion other people, typed in, and 14 years later, I do more or less the same thing every day.

Consumers react to problems, and only then do they search for features. My problem, on that day in 2001, was that I didn’t have information I wanted, and I didn’t have an easy way to get it. Google solved that problem.

With every product you use, there is an initial reason you started using it. Even if it was a direct competitor for something you were already using, it did something the competition did not do, and you needed. I switched from Yahoo 14 years ago because it wasn’t allowing me to do one thing I wanted. Yahoo had many features that Google didn’t, in those days. But Google could do what I needed, and Yahoo couldn’t.

We are looking for that one thing that you offer, that makes you Google in 2001- the thing that makes someone who uses your product say: “oh, use this, it’s the best for that particular problem.”

Your problem doesn’t have to be a new one either. Google’s wasn’t solving a problem people didn’t know about. Neither is Uber, or DropBox, or many other hyper growth startups. It was just that the competitors weren’t doing a good enough job. There was room for a new solution.

4. Misidentifying the Competition

XKCD's Take on "new products."

XKCD’s Take on engineers and “new products.”

And this leads to the our last great failing. Ignoring or misidentifying the real competition.

I say, the “real competition,” because defining your competition as a startup is a very tricky business. Broadly, your competition should be whatever your target user currently does to solve the problem that your product is built to solve. That’s true as far as it goes.

But where many startups get into trouble is by picking companies that “look like” their own, and calling that the competition. That’s not wrong, per se, but it isn’t very insightful or helpful. It leads to a lot of applications where the competition listed is a handful of companies most people have never heard of, including us.

Think about that:  if your competitors aren’t expanding globally, is that a good argument that there is a strong market for your products?

And by picking competitors that are very similar to yourself, you undermine your ability to define yourself in a broader market. You are not really competing for the small number of users that these smaller direct competitors already have, after all. You ultimately want people who have never used any product in your category to start using yours.

If you’re a car company, you want to sell people their first car. You don’t want to spend your time convincing people to give up somebody else’s car, which is perfectly fine for them, and switch to yours. The arguments in favor of owning a car vs. not owning one are easier to win than an argument over which of 2 very similar cars a person should own, particular when they already own one of them.

When I’m working with startups on product positioning, I often use the example of Uber. Who are Uber’s competitors? The answer is more complex than you think. If Uber thought its competitors were other taxi companies, or other ride-hailing apps, then this would affect its behavior in specific ways. It would try to do just what taxi companies do, only somehow better. Or it would try to do what other ride-hailing apps do, only faster and cheaper. It would be competing for people it knows are in that market.

But Uber’s success has been tied to the fact that it doesn’t hold itself to these lowly ambitions. It wants to compete for much bigger markets- to replace a whole range of consumer behaviors. Uber wants to be an alternative to owning a car, to renting a car, to hailing a taxi or to taking a bus. It want’s to be an alternative to drivers for working for a taxi company, or even having a summer job. It wants to be an alternative to ordering take-out food, or picking your mom up at the airport. It wants to replace many common behaviors at once- not just one or two.

Would Uber say their main competitors are taxi companies? Or is their main competition found in modern car culture itself? Which market is ultimately the more promising one?

So expand your horizons, and pick competitors according to the customers you want; not the customers that you know are already in the market. It is perfectly fine to aim high. We don’t laugh at companies who name big competitors. Big competitors have many vulnerabilities, and the bigger they get, the harder it is for them to keep growing and changing.

Give us Your Big Vision

The real shame is how often we talk to a startup in person, and find out how much better they are than they look on paper. “I didn’t want to tell you the big vision yet, because it’s in the future.” We hear that surprisingly frequently. But why? Tell us your big vision; share your wild ambitions. That’s why we’re in this business!

Your big vision demonstrates your passion and the scope of your thinking, and you shouldn’t be afraid that it will make you seem ridiculous. To some, it will. But there is no highly successful startup that wasn’t laughed out of at least a few rooms before they struck gold. If people don’t buy your big vision, then keep working on it. If you work hard enough on it, it will eventually be realistic, and maybe even achievable.