3 surprising learnings from 500 Startups
3 surprising learnings from 500 Startups
OK – I didn’t study 500 different startups! 500 Startups is a Venture Investment fund and Accelerator. So just to clear that up!
Some people asked me why we joined the 500 Startups accelerator given I’ve founded several successful startup – “surely I didn’t need their help or advice?”. It’s true, as a serial entrepreneur (masochist) it was also a question I asked myself when offered the opportunity.
Some “accelerators” have tainted the term by:
- taking egregious amounts of equity
- giving you a bunch of fatherly philosophical advice
- not really add much ACTIONABLE value
- and sometimes not even adding cash!
I’ve been lucky enough to be involved with a very good accelerator in Australia called StartMate. As a mentor I’ve always felt I’d personally let the teams down because I’m so busy working on my own startup – so I thought that might also be true of 500 Startups.
You never stop learning…
- so I’ve built a cloud-based startup before AND I’ve built a rules-engine startup before – because StreetHawk is a “cloud-based rules engine”
- AND I’ve raised angel rounds
- AND I’ve raised VC round
- AND I’ve flipped these startups to the US
So – “its a no-brainer for me to just go it alone – I don’t need an accelerator” – right?
Wrong! “Now” has nothing to do with what happened “before” – get this into your head – if some mentor or advisor thinks they have all the answers for you, then listen closely and make up your own mind. The industry is changing so fast that old tactics won’t work – the best old wisdom is the pain-memory of all the screw-ups!
Specific to StreetHawk is the fast-moving ecosystem of Mobile App Engagement:
- last years the metric was downloads,
- this year it’s about engagement
- and more recently “Day 3 Retention”, “Day 7 Retention”.
All this is completely different to ThreatMetrix’s fraud detection or Surfcontrol’s corporate web/email filtering. The route to market and marketing is different. Extremely different.
The healthy perspective is: “I’m always in kindergarten – I’m always learning.”
“Smartest guy in the room” is a curse
What I love about San Francisco is you get to meet with people waaay smarter than you. Whether you are in Sydney, Paris, New York – meetings often result with you educating the participants and that means you are selling not learning!
I love being in the room where the other people are blasting me with raw experience.
Here’s 3 surprising things about 500 Startups that challenged my preconceptions of what an accelerator is AND what it actually COULD be. I think 500 Startups is creating an excellent machine for growth and success for themselves and their teams. Of course they are creating a brand as well – that is part of their growth!
Lesson 1: Culture of Care
First thing you could be fooled into thinking is that “the 500 Startups experience” will be fuelled by the public persona of Dave McClure – quirky, offbeat and unconventional.
Extrapolating that personality might infer a brutal experience that would challenge us culturally and emotionally – but nothing could be further from the truth 🙂
500 Startups is about building “kickass startups” and to drive that, they have a culture that is brutally honest and cares enough to keep us focused on what on what’s important so we learn fast. This is obvious both the leadership and throughout the Batch (the term of acceleration with a bunch of other companies). Our Batch is encouraged to bounce ideas around, to learn from each other and this extends to the larger 500 family. The culture of care extends out across the 500 family – where other 500 Startups members continue to help each other out – which means there is a huge amount of learning you can tap into to get honest feedback and move fast.
Lesson 2 : Structure but not restricted
The second important learning was: we expected a very structured experience and this structure would restrict us, slow us down – this was soooo far from the truth.
Right out of the gate, it was positioned as a “Chinese Buffet” – you pick what you need, but more importantly seek what you need. It won’t be spoon fed.
You decide what parts of the program will be best for your business depending on what stage you are at. Whether you have have product/market fit and ready to scale distribution, or you are still defining the customer problem. And if you miss the structured learning, there are always experts in the network that you can tap into to get the advice and expertise you need.
We have visibility of the entire network and every week you can book office hours with Mentors so you can actually get time with someone that has actually solved the problem that you are working on:
- In the last week I’ve had 3 game-changing conversations with mentors and friends of mentors!
- You also get people calling bullshit on things that you know but have refused to face!
Lesson 3: There is only “One Metric that Matters”!
Having a deadline is gold. We all intellectually understand urgency but being in a pressure cooker environment with immovable demo day date is a great point of focus. Every week we meet with our assigned mentors and asked:
- What are we doing to meet our “one metric that matters”??:
- What are we working on that will move-the-needle on our business
- What have we learnt this week?
The Accountability is powerful and the end date is looming. The one metric that matters (OMTM) and OKRs underpin the experiments that you run. If you are doing ANYTHING that is not OMTM related – they you are probably wasting time!
The Accountability is also fuelled by the high energy of the working space and being surrounded by extremely focused passionate people. People who are having fun but not wasting each other’s time.
So what’s the downside?
- Timezone with the rest of your team – it’s super-tough not being in the same room with your team, especially when you are getting nuances and lessons that are hard to translate.
- If the pros are you can get focus and support, then the cons are you can get distracted because everyone has an interesting story and there is always something to learn – thats fine but how does it help our OMTM?
- Networking is powerful but it always costs – relationships are reciprocal, so they take investment. Are you always frustrated by the uber-social-mavens who seem to have loads of followers? Well, it’s usually because they arn’t building their own product – they are building a social media consultancy 🙂
- Every social interaction incurs a switching cost.
So….I book lunch with my peers – everyone has to stop and eat!!!! – so it’s not a tax. From this I’ve been able to make introductions to friends in my own network and I’ve received advice and tools in-kind.