The 7 (Pitching) Habits of Highly Effective Founders

Finding the right investors is like dating — you need to kiss many frogs before you find a prince.  

Today, I’m going to share seven ways fundraising founders can kiss fewer frogs and find more princes (subtle hint: Batch 19 applications are now open).

Habit 1 – Pitch to the Right Investors

Not all investors are created equal.

Some investors only invest in seed investments. Some investors only focus on Series A.  

Before approaching any investors, do your homework and make sure you go after the right target audience.

You can segment them with these 5 characteristics:

  1. Investment stages (seed, Series A, B, C, etc.)
  2. Check size (e.g. $50,000 – $150,000)
  3. How many deals has he or she done in past 6 months (you will find out how active this investor is)
  4. Industry focus (if any)
  5. Geography (most Silicon Valley investors would not invest outside of the Bay Area)

It is certainly quite rare to turn someone who isn’t already engaged in your industry or geography into someone who suddenly cares about what you’ve created.

Habit 2 – Pitch with Purpose

My colleague Andrea Barrica introduced me to this quote by Maya Angelou:

“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

What do you want your potential investors walk away with after your pitch?

Keep that in mind and you very likely will change the story you tell and the way you tell it.

Habit 3 – Curate Your Story

It’s harder to tell a short than a long story.

It’s easy to tell your investors everything that’s happened in your life since you were 3, but whittling that down to what they really need to know is much harder — and much more compelling.

Don’t be lazy, or self-indulgent. Put in the extra 20% effort and curate only relevant and story that make you uniquely over qualify for your startup.

Habit 4 – Pitch like a Professional  

During your pitch, you need to convey two things: 1) why you are the most qualified person and 2) why investors should give you money now.  

Be sure to cover the following if you are ready, but always start with traction & demo if you have it.

Here are 11 things to cover:

  1. Traction, traction, traction
    1. Revenue
    2. User download
    3. User engagement
    4. Major signed partnerships
  2. Product demo (If you have it. You should have it.)
  3. Market size & target market
  4. Pain point
  5. Product
  6. Team (team, investors, advisors)
  7. Technology
  8. Business model
  9. Monetization model  
  10. Competition
  11. Market Trends

Habit 5 – Understand the Big Picture

Most founders I met are in love with their product.  

Unfortunately, as an investor, I don’t just want a person who is in love with himself or herself or their product.

I want a founder who truly understands how to create a business. You should be the one who can tell me everything about your competitors, market, legal environment or policy changes.

Habit 6 – 24 Hour Follow Up

After your first call or in person meeting, be sure to follow up within 24 hours and make sure to cover the following in your follow up email:

  • Thank them!
  • Your deck
  • Current traction
  • Team
  • Action items
  • Your ask
  • Ask for follow up meetings or phone calls

Habit 7 – Show Passion & Honesty

Building a startup is really, really hard work.

As an investor, I want to find someone who won’t back down when things get (even) harder, and is willing to do whatever it takes to make things happen.

A huge part of working hard — and knowing where to work harder — is knowing what isn’t working (yet).

Show your true self, and be honest. It’s ok to say, “I don’t know.” You don’t need to have all the answers, but you do need to have the strength of character and work ethic to figure it out.

Raising The Drawbridge? Brexit’s Implications For UK Startup Founders & Investors

In 2015, 500 Startups Partner Matt Lerner joined the firm so he could lead the London-based Distro Dojo, a growth marketing boot camp/think tank that helps early-stage startups scale up for their next round. When he took the reins, Lerner had many expectations, but the notion that 51% of British voters would soon vote to leave the European Union was not one of them.

500 Startups Partner Matt Lerner
500 Startups Partner Matt Lerner

The UK’s relationship to the EU has been ambivalent for decades, but that hasn’t stopped London from becoming a hub for European startups, said Lerner. Like Silicon Valley, London has access to sufficient money, talent and experience to sustain a startup ecosystem. Brits haven’t imported California’s sunny optimism, Lerner said, but “they have always embraced and celebrated failure.”

The UK and the EU have a couple of years to figure out the political and economic ramifications of Brexiting, which leaves plenty of room for fear, doubt and speculation. Gloom-and-doom headlines forecast recession, thousands of immigrants (like US-born Lerner and his German wife) are wondering about their legal status, and some pundits have started to wonder about the pound’s status as a reserve currency.

Is it accurate to say that uncertainty over Brexit also comes with a fair amount of hype?

Yes, definitely.

Do you have a clear sense of what’s going to change for you?

Short term, investors don’t like uncertainty. You saw how the stock market got rattled, and I have seen a few people sort of trimming their exposure. I say that anecdotally. A few founders have told me that someone has dropped out of a round here or there, or that they’re unable to close a round because of Brexit.

Your Distro Dojo portfolio is tied to the almighty dollar, which bodes well, I presume.

As an investor, I believe that saying, ‘you should be greedy when others are fearful, and fearful when others are greedy.’ My attitude is, we’re investing out of a US fund, so if the pound gets weaker, then we get more company for our dollar.

Any other upsides from Brexit and the disruptions it’s creating?

If there are fewer VC at my stage in London, then I’ll get access to more and better investments at lower prices, so for me, this makes me optimistic. At this point, nothing’s changed that would make these companies less investable.

For startup founders who are deciding whether to launch in London or Dublin, what would tip a person towards the UK?

That’s the long-term question. You need talent, you need money, and you need customers. In terms of talent, UK immigration policies are a big unknown. Right now, any European can move to the UK, no problem. What they could do is move to a merit-based system like the US has, where you can move from anywhere to the UK, but you need to be talented, you need to be successful.

That might be better for startups, in the sense that you have more of the best and brightest from China, India, and from all over the world. That could mean more of the highest caliber talent, which would be good. You’d get less cheap labor, but startups don’t tend to use cheap labor in the UK anyway.

What’s the impact on startup funding in the UK, post-Brexit?

It’s much easier for startups to get funding than anywhere else I know of in Europe. There’s truly a lot of money in the UK, and people move their money into sterling because it’s a bit of a reserve currency. A lot of it is made available to startups through some very generous tax incentives for early-stage startups. Right now, the easiest place to raise money is the UK.

Is it just a language and culture issue? Why is the UK so startup-friendly?

The legalities of incorporating and raising money is very easy to do in the UK; I’ve invested in Irish, French and German companies, and it’s a lot harder. As a VC, all things being equal, you’d rather put your money in a place where everyone’s going to spend less money on legal fees. Things will happen there.

Distro Dojo kickoff

What about access to customers post-Brexit? How will leaving the EU impact startup growth and customer acquisition?

That’s a bit more concerning. Today, as part of the EU, the UK’s got instant, automatic access to all of the European markets, as well as any markets it’s negotiated trade agreements with. If they leave the EU, they’l have to find and negotiate new trade agreements.

Where else might a European startup founder go besides London and Dublin?

You’ve got startup hubs in Stockholm, Lisbon and Berlin. It’s not like Silicon Valley, where if you want to leave, there are no viable alternatives for thousands of miles. Get on a flight in Dublin, and you can be in Berlin in an hour. Talent is super mobile these days.

One company we’ve invested in, they’re British incorporated, but they’re based in Berlin, because you can get better, cheaper talent there. It’s a fairly trivial thing at an early stage to move a company.

When you talk to other UK tech investors, what’s the mood?

Everything is wait and see. People are watching their customers and their numbers to see how things go. We don’t have too many companies at this level that depend on trade agreements at the moment. And talent is very pragmatic day to day; a lot of times, they’ll just hire someone who’s remote in another country, anyway.

You haven’t made any long-term predictions.

Long term, I am pessimistic. The UK is a net exporter, and like most countries, they generally tend to benefit economically from immigration. Brexit can hurt both of those things; it weakens the pound and reduces its appeal as a reserve currency, which will lead to a net outflow.

We’re getting into macroeconomic theory, but on balance, my prediction is pessimistic. I just think we’re moving so quickly.

More on Distro Dojo:

 

 

Announcing Batch 18 — Bring on the Bits, Bots and Bods!

We’re proud to announce our 18th cohort of accelerator companies (appropriately called B18) residing in the 500 Startups San Francisco office for the next four months.

The batch has a few themes and includes 46 companies total. There is an 11 company FinTech track (five in insurance) led by Sheel Mohnot who runs the 500 FinTech fund and 8 company Digital Health track led by Rebecca Woodcock.

There are also themes in industrial applications, Tristan Pollock’s experiential lifestyles track (think about companies like Outsite that let you live and work from anywhere), and MOAR bots, including bot analytics company Statsbot, Track for freelance taxes, AI homeowner financial dashboard Homebot, and SimplifiMed for monitoring high risk patients.

500 Startups continues to remain one of the most diverse organizations and accelerators in Silicon Valley and our founders in this batch show it:

  • 19% of companies have a female founder
  • 22% of companies have a black or latino founder
  • 28% are international founders from 11 different countries

We are also excited to welcome our first native Hawaiian founder with Paubox, second investments from New Zealand and Nigeria in Melodics and SureBids, respectively.

Read on to learn more about each company in B18, or visit the Techcrunch announcement here. Note, that only 45 companies are listed below because two are still in super secret stealth mode.

Meet these companies and see them pitch at our next Demo Day. Investors, corporate strategics or reporters that are interested can go here for more information.

If you’d like to be a part of the 500 Family, applications for Batch 19 in Mountain View are open now.

***

Andromium

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Andromium’s Superbook is a plug-and-play device that turns your smartphone into a complete laptop for $99.  Once connected to a Superbook, a user can enjoy the same high quality computing experience on their smartphones no matter where they go.

 

Auctio

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Auctio is a referral management & tracking software that helps B2B companies generate more revenue from referrals. Their platform allows companies to launch and optimize referral and cross-selling programs.

 

Avicennas

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Avicennas is a trusted marketplace that provides a platform for people to find internationally accredited healthcare providers around the world for their medical treatment. Avicennas helps individuals access affordable healthcare with no compromise on quality or service.  

 

BeaconsInSpace

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BeaconsInSpace allows users to better monetize their app and generate location analytics using a global beacon network. With their beacon marketplace and a few lines of code, one can instantly acquire a scalable infrastructure of beacons in their home city and across the globe. BeaconsInSpace handles all of the hardware deployments and upkeep while their infrastructure APIs make it easier for one to build their product at scale.

 

BIGcontrols

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BIGcontrols utilizes an enterprise SaaS platform to help corporations save millions of dollars by automating the tracking, reporting, and compliance management for their government incentives.

 

BrightPolicy Inc

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BrightPolicy has created homeowners insurance for digital natives. It is the only way to buy homeowners insurance in minutes on your phone without talking to somebody. BrightPolicy uses the internet to automatically gather all necessary data before asking the user for confirmation, saving them time and hassle.

 

Croissant

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Croissant is a magic pass for coworking, offering a passport membership to the best workspaces in New York, Boston, and D.C.

 

Datatron Technologies Inc

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Powered by a team of experienced software engineers, Datatron‘s real-time big data AI engine is complete with proprietary software that allows for enterprises to optimize real-time business decisions.

 

DigitalOutposts

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DigitalOutposts hosts select groups of remote working professional and graduate students in distinctive coworking destinations. The service provides workspace, accommodation, logistics help, and activities, so customers can get their work done while they meet new people and find new adventures.

 

Fan Stream, Inc.

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Fan Stream offers a new type of sports radio as it connects fans together in live audio conversations to discuss their favorite teams. Optimized for live game action, Fan Stream puts audio communication at the core of the sports community.

 

Fragmentic

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Fragmentic is an AI constructor for building SaaS and e-commerce services from pre-designed elements, aimed at customer conversion funnel optimization.

 

Get Lighthouse, Inc

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Get Lighthouse believes that people leave managers, not companies. That is why they want to give managers a platform to help prevent the pain caused by losing good employees, and feel the joy of a high performing team. Lighthouse helps bring great management to every team and company.

 

HeavyConnect, Inc.

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HeavyConnect is a collaboration platform for enterprise farming that simplifies farming operations, allowing teams to work more efficiently. HeavyConnect simplifies data into a clear and easy to understand actionable format. The platform not only helps with time management, but also saves farmers money.

 

Homebot, Inc.

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Homebot is an AI powered financial dashboard and planner for Homeowners. It helps homeowners build wealth by optimizing debt, home improvement, and rental potential.

 

Indio

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Indio brings traditional commercial insurance brokers into the digital age. Indio’s workflow management platform platform provides brokers with a centralized location to get quotes from carriers and a beautiful client facing interface to retrieve application information. The focus of Indio’s platform is to reduce the operational overhead that brokers deal with on a day to day basis getting information from the client to the carrier — allowing brokers to focus on consulting and risk management.

 

 Infraspeak

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Infraspeak is the dawn of a new age in facility management, allowing customers to enhance control and efficiency, cutting costs and reducing bureaucracy by up to 70%.

 

INZMO

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Inzmo allows for customers to get hassle-free insurance on their mobile phone. The app enables people to purchase everyday insurance products in just a few seconds.

 

Leapcure, Inc

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Leapcure is the fastest and most effective patient engagement platform for accelerating clinical research participation. It assists with the recruitment, engagement and retention of clinical trial patients.

 

Level Family Therapy

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Level is a platform that provides treatment tools and access to behavioral health professionals. It is a virtual mental health clinic connecting behavioral health professional with individuals in need of expert assistance.

 

Melodics Limited

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Melodics is an entirely new way to learn to play musical instruments.

 

Nonnatech Inc.

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Nonnatech is an innovative digital health platform that uses its patented remote patient monitoring platform to reduce avoidable emergency room visits and hospitalizations through the early detection of physiologic changes.

 

OK Play

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OK Play makes for quantifiably better teams via predictive performance analytics. The feedback generated by the platform improves team performance by offering powerful insights based on a particular team’s specific style and personality. OK Play coaches teams by clarifying goals showing performance metrics.

 

OneKloud Inc.

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OneKloud is a cloud control platform that enables control policies along with time and dollar quotas per user, team and project for truly enforcing and optimizing cloud services budgets.

 

OnFarm Systems Inc.

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OnFarm seamlessly integrates any farm device or cloud data to power solutions that increase farmer profitability and sustainability utilizing analytics and API solutions from disparate agriculture data sources.

 

OrderCircle

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OrderCircle simplifies the wholesale ordering process. Wholesale customers can now place orders directly online– no more phone orders, faxes, or emailed forms. The platform also helps companies manage customers as well as make the reordering process easy.

 

Outsite

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Outsite aims to disrupt the coliving/coworking market by focusing on beautiful places for location flexible individuals and company retreats. Outsite is a collection of unique work+play accommodations that cater to the growing community of entrepreneurs, business travelers and digital nomads who are looking for alternatives to uninspired hotels and conference halls.

 

Paubox, Inc.

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Paubox offers its customers the easiest way to send and receive secure, HIPAA compliant email. Using email encryption, encrypted forms, branded storage, and email API, Paubox allows users to easily ensure that they are HIPAA compliant.

 

Pillsy Inc.

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Pillsy makes it easier for people to manage their pills and vitamins with their smart pill container and mobile app. PillsyCap automatically tracks when you take your pills and it reminds you when you forget a dose. Pillsy also enables secure sharing so family and loved ones can help each other stay healthy.

 

 Printify

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Printify offers a print on demand marketplace & mediation platform connecting on demand producers and e-commerce merchants. Users can generate and sell 500+ designs on Shopify.

 

ROHO

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ROHO is a platform for on-demand religious content and experiences. Digitizing sermons allows individuals to feel spiritual and motivated no matter where they are.

 

Silvernest

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Silvernest’s highly scaleable, innovative online solution pairs aging homeowners (50+) with compatible roommates and provides tools for long-term home sharing. Silvernest focuses on boomers and empty nesters who have space to share.

 

SimplifiMed, Inc.

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SimplifiMed is an enterprise population health management for value-based care. Medication management impacts 17 out of 33 criterion to calculate ACO bonus. Unfortunately, all the physicians in an ACO don’t use the same EHR, making it impossible to manage medications. SimplifiMed helps ACOs keep patients healthy while allowing physicians to continue using EHR of their choice.

 

Squadle, Inc.

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Squadle offers a platform that automates operations workflow for the $4.5 trillion multi-unit retail industry. Squadle gives its customers a better way to collect and act upon all of their operations and compliance data.

 

STATSBOT, INC.

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Statsbot is an intelligent interface for business apps.

 

StreamLoan, Inc.

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StreamLoan provides a mobile first, SaaS collaboration and workflow platform, simplifying residential home purchases.  Now the journey is as rewarding as the destination for home ownership. The platform is simple, secure and efficient.

 

Surebids

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Surebids is a retail voucher platform for gifting, loyalty, remittances and credit in Africa. Surebids offers gift cards to the biggest and best stores in Nigeria.

 

Tackl, Co.

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Tackl is reinventing university recruiting through connecting aspiring talent with the right companies for exciting opportunities. It offers a university talent inventory powered by smart-matching.

 

Track

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Track automates bookkeeping and taxes for freelancers, saving its customers money without the hassle. Track offloads all the heavy accounting so you can stay focused on the work that pays.

 

Treat

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Treat is an app for all things pet care. Treat offers full service pet care, transparent pricing, same-day booking and more all in the comfort of your own home.

 

Trym

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Trym insurance works to fit all your small business needs.

 

Up All Night

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Up All Night is your very own nightlife concierge that gets you into the best events. Through its subscription model, users get 4 tickets to the hottest events plus exclusive discount tickets for $25 a month.

 

Usetrace

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Usetrace is a web app that uses cloud computing to automatically test your site the way your customers would actually use it. Usetrace does not require coding or constant updating. The testing system is long lasting as it adapts with the changes that come as you edit and redesign your site.

 

VisionX Solutions

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VisionX is a global insurance distribution system, like Amadeus for the travel industry.

 

Voxeet

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Voxeet offers APIs for 3D surround sound voice and video communication. Voxeet lets you rapidly integrate its award-winning TrueVoice audio technology and convenient messaging and collaboration capabilities directly into your website or mobile app.

 

WhereFor, Inc.

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WhereFor is the first search engine to determine where you can travel for what you want to spend, allowing users to take the best vacation possible.  Simply enter your total budget, see where you can go, what flight to take, and where to stay all for whatever amount you can afford.

See the coverage in Techcrunch here

The Hunt: How Startups WIN on Product Hunt

Product Hunt (PH) has become the de facto source for new and upcoming technology products.

Product Hunt win with Arka

If you get featured on the homepage, the next 24 hours could be glorious:

  • Thousands of site hits, a boost in customers
  • MOAR revenue
  • Massive brand awareness among target audience

Or, it could be an utter failure. You might get low conversion rates to your site, ghosted from the PH featured page and buried under your competitors.

You choose.

How to WIN at Product Hunt

I’ve helped companies like Indemand and Arka gain over 1,000 upvotes in less than 24 hours, which — with high conversion from PH to landing page — led to hundreds of new customers and thousands of revenue dollars in just a few days.

Don’t worry, it’s a repeatable process. Here’s the step-by-step recipe for how to gain traffic and conversions from Product Hunt.

#1 Gather the important information

Ok, this sounds boring, but if you want someone to post you on PH, the person should be relevant to you and you should build that relationship before making the ask.

I post about things that get me excited, as well as for 500 Startups and AngelPad companies because I’m a part of those communities.

Here’s the info you should gather and customize to fit PH.

  • The date to post
  • Category (Tech/Games/Books/Podcasts)
  • Product name
  • Website
  • Catchy tagline (40 characters or less)
  • Blurb on why I think the product is awesome (I’ll write this as the hunter, but helpful thoughts are encouraged)
  • Special offers for the cat-loving PH community (optional)
  • Links to 1-2 recent articles (optional)
  • Platforms and tags (ex: web, developer tool, transportation)
  • Media (one for icon, one for header)
    • I highly recommended you customize your images for PH. Here’s an example from Arka:

custom image product hunt arka

  • Status (available now vs pre-launch)
  • Twitter handles of founders (to be added as PH Makers and tweeted out — Twitter promotion is 🔑 )

The above fields are from the PH hunt form and the PH product page itself. The ‘Hunt a Product’ form does change from time to time, but here’s what it looks like today.

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#2 Use the power of social network effects

Find a strong PH influencer to post you and follow that person (in this case, me).

tristan pollock product hunt influencer

Then have your team and friends follow the hunter as well. This amplifies your post reach because all followers are notified when a product is hunted, and if they upvote/share, their followers are notified with a PH alert. And on and on.

Extra points if you have a strong collection built around your business and can get the collection creator to add you. I like to post about 500 Startups, ViceTech (experiences), Frontier Tech, Digital Nomads, and Music (and creativity) in my collections.

Collections can be picked up and promoted by PH at any time. An example is my Comedy collection that was featured on the PH email newsletter. This can give your PH post longevity, in addition to the norm of using upvotes to rank highly for specific keywords.
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#3 Post at midnight, because timing is everything

This is key.

Hunting a product at midnight gives you a full 24 hours on the front page.

You also get another 24 hours on the Yesterday page that sits right below the Today featured feed on the home page. 95% of upvotes occur in the first 24 hours.

To make sure I’m in sync with the Maker when hunting the product, I ask them to:

  1. Send me an calendar invite for 11:30pm-12:30am for the day we are hunting with all hunting information included
  1. Comment on the post immediately after it is live. Here you should mention that you are the founder and here to answer questions (the more PH community engagement the better)
  1. Share with your personal and business networks. Usually if you are the top post by 9AM PST (aim for 100-150 upvotes) then you are in good shape for the rest of the day. Here’s a sample message you can send out:

Hi Friend – help us squish it on Product Hunt this morning!

To upvote [MY PRODUCT] follow these instructions:

1/ Go to the producthunt.com homepage.

2/ Find [MY PRODUCT] and upvote (note: if you are in a shared office space with others upvoting, use a different IP address by using your mobile device with Wifi turned off and you’ll get a more powerful upvote).

3/ Add a comment about why you love us, or a question about the product (the more engagement we have the more visibility we get).

4/ Share to your own networks via Twitter/Facebook/text/email (get creative with email lists, friends, family, accelerators, etc).

Much love,

YOU

#4 Focus on engagement and conversion will come

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Arka saw a spike to their landing page that peaked 24 hours in, and lasted four days total with about 10% of traffic remaining over the next two weeks. Over 120 new customers paid for their product.

arka conversions

Indemand saw an even larger increase in traffic and customers, including:

  • Users. An increase of 7,000 unique visitors with their user base growing by 25% just through Product Hunt. About 15% of the total uniques churned.
  • Revenue. Over $150k worth of custom deals came through Product Hunt, plus an increase of MRR by $5k. This happened over the first 5 days after the hunt.

I attribute their success to these factors in order of importance:

  1. Product Hunt community. At the end of the day, the most successful products on PH fit the community, which is still majority tech oriented, and come from Hunters/Makers who participate in the community, write thoughtful comments, and have been engaging on the platform over a longer period of time. The Indemand founders fit this mold and so did their product.
  1. Hustle hard. The Arka and Indemand teams did everything possible to bring awareness to their hunt from alerting their accelerator batch network to downloading their LinkedIn contacts to handing out candy on the street. They were determined, creative and very, very persistent.
  1. Hunter-Maker collaboration. If it isn’t clear already, I spend too much time on PH. As their Hunter, I worked closely with Arka and Indemand to improve their content, share it to additional communities I have access to (e.g. accelerators, personal networks), and, of course, have competitive fun in the process.
  1. Timing. Post between 12am-2am. No excuses. Indemand pulled an all-nighter to monitor questions, comments, and fuel the hunt.

#5 A note on external factors

There are always things you can’t control.

For example, if a new product by Google is hunted the same day as your product it will draw attention away from you. Or the fact that less people are engaged on PH from Friday to Monday, so you probably want to avoid those days. Some of these factors you can plan for. Others you can’t, but if you follow the above steps, you should be able to gain healthy initial exposure, but always make sure to be respectful of the Product Hunt community rules by reading their FAQs.

Lastly, if you haven’t used PH often, it’s best to get involved, comment, ask questions, upvote products you like, and talk with other Hunters before hunting your own product. Give before you receive. It’s called cat power. 😻

product-hunt

Tristan is a Venture Partner at 500 Startups, follow him on Twitter here.

The Most Common Myths About Startup Accelerators — Busted

In most aspects of life, the gulf between expectation and reality is larger than expected, but that’s where growth comes from.

This principle also applies to startup accelerators, where founders fortunate enough to gain admission can access networks that provide mentorship, emotional support, and eventually, funding.

Tristan Pollock, a 500 Startups Venture Partner and Entrepreneur-in-Residence, is part of a team at 500 that reviews thousands of applications for each 12-week batch, which usually only admits 40 or 50 companies.

Today, we’ll reveal the most common myths founders have when they join an accelerator, and how Tristan’s own expectations evolved after joining 500.

EIR + Venture Partner Tristan Pollock
EIR + Venture Partner Tristan Pollock

What are some of the top misconceptions founders have before joining an accelerator?

A large part of it is setting expectations at the beginning. Sometimes, the people that do the best coming into the accelerator are the ones who realize that most things in life are what you make of them.

They come in and say, ‘I want to talk to this person about this specifically,’ they ask the best questions, they put the time in where it’s needed, but they don’t go to every single thing if it’s not helpful. They have good EQ, overall.

The people that struggle think we’re going to work for them, like 500’s going to be like adding more employees to the team. It’s not the case. Most founders coming into the batch are really bad at standing up and presenting. If you could see the quality of the pitches at the beginning versus what people look like at the end, it’s like night and day.

The smartest founders are interested in the more actionable things that will help their business grow.

Do people think they pitch well?

I think people come in probably with a higher level of confidence than they should.

Many of them confirm the idea that Americans are way overconfident. You’ve seen those studies about how Americans think they’re good at math, but they’re way worse than they think they are? Like that.

Maybe they just haven’t been challenged in a public speaking setting. It’s one thing to be good in your head, but to convince other people who work in startups or investors is different.

Even people who have good experience in the past — bought a company, or sold one — might not have been challenged to be a better public speaker. Some people come in who are horrible, some are OK. Getting that confidence and boiling the pitch down to a short, simple message? That can be the difference between getting funding and not getting funding.

How much does prior experience help a founder who joins an accelerator?

Generally, people coming in with past experience have something specific that they’re looking for, like all the newest growth marketing avenues they could be using, or they want to access the 500 network because they’re not from Silicon Valley, so they’re gong to meet as many people as they can here, and take advance of the founders’ network.

People come in thinking different things about what they’re going to get out of it, usually it’s not the money, though.

 

It’s not about the money? It IS an investment vehicle.

The smartest founders are interested in the more actionable things that will help their business grow. You can throw money on a failing company, but once they come in in and take advantage of our growth expertise, the network or the founders around them, then they can get a lot more out of it.

Which of your expectations were the first to fall after you joined 500?

[laughs] That’s a good question. For me, having raised money from 500, I didn’t go through the accelerator, so it’s like a night-and-day comparison since founders are taking a small $50 to 100K check. 500 did Storefront‘s seed and series A, so I was kind of clumped in with a ton of other companies, but 500’s accelerator has a real community.

I went through AngelPad, and some of the things from that experience definitely helped, like the mentorship and the network. My biggest misconception was looking at 500 as ‘spray and pray,’ where they’re just going to do a s–t ton of companies.

People come in thinking different things about what they’re going to get out of it, usually it’s not the money, though.

Did other perceptions shift after becoming an EIR and venture partner?

When I came in, I saw that the community was so strong, along the people on the team. The culture in the office that our founders selected, making sure that people are respectful and very conscious of each other and taking care of each other?

I don’t know, there’s just something special about the culture that I never really saw from the outside.

Working in a startup can be isolating. Do founders get culture shock when they’re dropped into an immersive social environment like 500?

Most are eager and enjoy it, but for some, maybe if you’re on the technical side of the company, it can be very difficult to get work done. I know I need to focus and it can be hard to get work done in the office.

But, that’s also one of the big benefits; there’s serendipity when you can introduce a founder to someone who’s dropped in, and a lot of good things cam come of that. But yes, it can be distracting a lot of the time. You spend a lot of time with founders in each batch, and they spend a lot of time together. During a Demo Day, I saw how tight those relationships can grow, which was unexpected.

They’re not only building a network that they’ll bond with and go to with questions or hard times, but also people they can have that beer when they really need it, as well as 500 staff people who really take care of you and make sure you have an outlet. I’ve had meetings with people where they cried, or we’ll go for a run or go get beers. There’s that hard side of startups that 500 really acknowledges, so you can come to us not just for the business side, but for everything. We’re a very loving family.

Are there cases where a founder you voted against accepting into the accelerator defied expectations?

Oh, for sure. [laughs] And it’s happened the other way around, too. The accelerator is a place where you get to see real progress, so it’s really incredible to see where things go. Sometimes, you have that ‘I told you so’ moment, and sometimes, you’re thinking, ‘this is a great founder to have around, but the business is going to have a hard time succeeding.’

The best companies sometimes come out of polarization in the selection process. When one person says, ‘I hate this company,’ and another person says they love it, that creates great debates, because it causes people to have such strong opinions.

Related:

>> APPLICATIONS TO BATCH 20 ARE OPEN NOW <<

4 Steps Every Startup Must Take To Build Culture, Compete for Talent, and Win

I talk to brilliant founders every day who are 100% focused on growing their company.

They’re solving problems and improving their business at light-speed, turning their great idea into an even better company. Unfortunately, a lot of them have the same blind spot:

They don’t understand company culture.


Having a strong culture doesn’t mean you have a beautifully designed office or that you offer your employees unlimited vacation days or catered lunches.

Culture, at its core, is the way your team works together. In other words, it’s not about the perks.

When your culture is strong, your team is deeply connected and each member takes personal ownership over their own little piece of the company. This commitment is what powers successful startups and it can be incredibly difficult to instill.

To help you along the way, I’ve broken down 4 critical steps to growing a strong company culture.

1. Grow Your Culture By Design

You need to plan your culture in advance.

As a startup, things are constantly in flux. A higher up will leave early on, a feature you thought was brilliant will tank, and as you tumble through these peaks and valleys you’ll hit upon some genius ideas and pivot your company accordingly.

It is very easy for these fluctuations to make team members feel uncertain. It’s up to you as a founder to instill certainty in them by having a strong culture in place before problems arise. Knowing how they will deal with whatever comes next—and trusting their teammates to help—makes this much less uncertain.

Think of Facebook’s now-cliche “Move fast and break things” motto. It doesn’t tell team members what they’ll be working on. Instead, as former Facebook employee Sarah Smith says, the motto told team members “to take risks and not think too much about every potential consequence knowing that if something failed, it would be okay.”

So if a developer built and launched a new feature in a few days only to find that it crashed the Facebook site, it was okay. That sort of reckless, rapid innovation was at the core of Facebook’s culture and everyone bought into it.

Planning a strong culture in advance requires you to answer several questions, including:

  • What does your decision-making process look like? Do individual team members have the power to “move fast and break things,” or do they need your approval first?
  • What is the top priority in your work? Are you customer-centric, or do you have a growth-at-all-costs mindset?
  • How does your team communicate? Slack? In person? Email? Does all communication need to be transparent and visible to the whole team?
  • What is the team’s relationship with each other? Do you have team events, or do you keep work and personal life completely separate? What about for remote workers?

Having this in place before problems arise is critical to growing a successful company.

2. Recruit What You Don’t Have—Not Just More Of The Same

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It’s easy to get tunnel vision once you have a clear picture of your company culture. You imagine your ideal employee and you begin recruiting people who fit that template perfectly.

The problem is that you have shortcomings and you need to recruit people who compensate for them. If you’re only recruiting one type of person, you are not creating a team with a diverse skill set who can cover for and complement each other.

For example, if you have a sales rep on your team and are hiring a second, recruit someone who complements your current staff. If your current sales rep has an analytical personality, try to recruit someone who is more creative.

Hiring for your weaknesses is trickier than it sounds because it requires you to be hyper-aware of your own shortcomings and blind spots. To do it well, you have to constantly audit yourself, your team, and your hiring process.

Ask yourself these questions:

  • Are you using a diverse set of recruiting channels, or are you recruiting exclusively from similar groups? For example, are you only posting to job boards frequented by people with a certain background?
  • If you had every team member write down their biggest weakness, what would be the most common answer? Have you hired someone who is strong in that area?
  • Are there any areas you give less attention to because they don’t fit your skill-set or you find them less interesting? Have you hired someone to delegate them to?

It’s tricky to be aware of your blind spots, but it’s critical to building the right team.

3. Manage Your Cultural Carriers

There are two kinds of authority in a company. Founders, project managers, team leaders, etc. all have official authority and define your company’s culture as part of their job. On the other hand, there are always going to be unofficial cultural carriers on any team.

Some people are charismatic, some people are persuasive. Who are these people on your team?

Look around and develop your awareness of WHO the unofficial carriers are, and their effects on your team.

Let’s say you have an all-hands meeting each morning. If you and everyone in a leadership position show up on time every day, it sets the tone that punctuality is expected. However, if an unofficial cultural carrier shows up late for the meeting consistently, other people will begin to follow suit.

Sometimes managing these unofficial carriers means sitting them down and talking to them about your company culture and their role in it. You want their buy-in, because they can be a huge benefit to your culture.

When your team hits a tough obstacle, it is a huge help to have an unofficial carrier on the team who embodies your company culture and is 100% committed to pushing forward. They will drive their team to do the same.

4. Hire The Same Way You Date

Hiring someone solely because their CV qualifies them for the job is a mistake. You need to know they communicate in a way that fits your culture, that they enjoy the sort of environment you’re cultivating, and that they have a mentality about work that jives with your company.

To figure out if candidates really fit your company culture, you have to get to know them on a more personal level.

There a number of ways to do this:

  • Have them eat lunch with the company.
  • Invite them to a team social event.
  • Take a long walk with them after the interview.

Anything that puts you in a situation with them outside the context of an in-office interview is going to give you a more complete picture of how they interact and whether they’ll fit your culture.

This isn’t just about making sure your company culture stays strong. It’s also about being fair to the candidate and your team. Bringing someone on who is destined to struggle with your company’s culture sets them up for failure, and forces an unnecessary burden on your team.

Your Culture Is Your Biggest Advantage

As a startup, you have to build and keep a rockstar team to succeed. This means you’re frequently going to go head-to-head with bigger companies for the best candidates. You won’t be able to offer them the same salary or perks as a giant company. All you have to sell them on is your culture.

But this can be to your advantage. Having a strong culture means creating bonds of trust between your team members and this creates loyalty to your company. You may not be able to bribe your team members with retreats and office dogs, but you can create a culture that connects your team on a much deeper level.

To hear more from Louise, follow her on Twitter at @louise_kinglui

Why Your Accelerator Rejected You

500 Startups Partners Marvin Liao and Elizabeth Yin are warm, friendly individuals, but they also break a lot of hearts.

As gatekeepers for 500’s San Francisco-based accelerator, Liao and Yin lead teams that review anywhere from 1,500 to 3,000 applications per 12-week round.

marvinliaoheadshot
Venture Partner Marvin Liao

There’s nothing fun about raining on someone’s parade, but with only 35 to 45 slots available, there’s a lot of disappointment to go around. “We have to look through every single one, then we filter it down,” said Liao.

500 Startups EIR Elizabeth Yin
Venture Partner Elizabeth Yin

Which Applicants Are Most Likely To Hear “Yes” From 500?

“We really do take it case by case,” said Yin, though there are a few hard and fast rules. “In most cases, we look for a complete full-time team that has a product already launched, ideally with paying customers.”

“We’re a customer acquisition-focused program,” said Liao, so he’s always seeking opportunities “in some huge market that we’re all personally interested in, and where there’s availability of downstream capital.” Many applicants embody a several of these traits, “but it kind of needs to hit all of these points before we bring you in,” Liao said.

No Market, Revenue, Customers Or Live Product? Come Back Later.

Even in Silicon Valley, there’s such a thing as being in too much of a rush, Liao and Yin agreed.

“If you have an idea and haven’t done anything with it, that would probably fall under the category of too early,” she said.

In other cases, “it may be that the market’s there and founders are really awesome but they’re still very early, so they better suited for a batch downstream,” Liao added. “They don’t know who their customers are, or, after I walk out of the interview, I’ll have no idea of what they’re working on.”

Cap Tables Matter

In many cases, international startup founders are more likely “to have a cap table that’s screwed up,” said Liao. “We love you, we love the company, but the fact that you as founders own 30% of the company is going to make it hard for you to raise downstream capital, so we can’t invest, period,” he lamented. “That’s a lot more common than you’d think for international companies.”

“This is not a one-time thing. You’re not applying to college. This is a continuous process.” — Elizabeth Yin

Yin said 500’s interests are “fairly broad” and extend beyond software into verticals like fintech and ecommerce,”where you can get a lot of online customer acquisition.”

Entrepreneurs seeking to join a 500 batch should make sure they’re good with the size of the checks they’ll receive; pharma founders need not apply, as the sector is “too rich for 500,” said Yin.

Entrepreneurs who don’t follow the guidelines or submit incomplete applications aren’t even considered, and liars need not apply.

“We had someone say in their application that they’re doing $5 million in revenue,” recalled Liao, “and then we interviewed them and found out that they hadn’t even launched yet. That interview ended pretty quickly, he said. “We haven’t had to kick anyone out yet, knock on wood. you try to catch that stuff during the interview process.”

“We should not be picking people based on personality because great entrepreneurs come in all shapes and sizes.” — Elizabeth Yin

Results Are More Important Than A Startup Founder’s Personality

If Yin and Liao question an entrepreneur’s values or business acumen, they’re unlikely to move forward, Yin said, citing an example of a team with a high burn rate. “If they hadn’t raised that much money and it seems like the money they had wasn’t going towards anything useful, we thought these people were too spendthrift and the money’s not going to go towards growth.”

That was a subjective judgment, Yin acknowledged, but it was came from key metrics, not a personal vibe. “That part is where subjective, unconscious biases can start to creep in, and I am very leery of that,” she said.

“When everybody says, ‘I really love this founder because he or she is a hustler,’ I push people to dive into what specifically does that mean,” Yin said. “Do you like a person’s personality because they’re outgoing and charming and friendly? Or, is it that they have actually exhibited concrete results?”

“We should not be picking people based on personality because great entrepreneurs come in all shapes and sizes,” said Yin.

Liao concurred. “Do we think that they’re smart? do we think that they’re coachable? Do we think that we can be helpful?” He’s not looking for polished presenters. “They learn that due to people on my team like Andrea Barrica, who are very good pitch coaches and storytellers with an ability to say to founders, ‘here’s what really matters.'”

When Yin encounters serious introverts who have great products and no sales skills, she advises them “to really make the concerted effort to sell more, or bring somebody else on board.”

Even among the founders who are accepted, “about half just don’t do well in the interview,” admitted Liao.

“We value persistence.” — Marvin Liao

500 Startups’ Transparent Rejection Process Encourages Founders To Reapply

As a former entrepreneur, Yin said she always grew annoyed when investors would pass on her pitch without offering any feedback or rationale. “If you try to push them further, they’ll say, ‘it’s not a good fit or something vague like that,'” she said.

Instead, Yin said she strives to be as open as possible with founders who weren’t accepted into the batch of their choice. “Any company who asks us specifically why we’re passing, we’ll be very up front about that,” she said. “This is something that I strongly believe in.”

“A rejection from us is not a rejection forever.” — Elizabeth Yin

“A rejection from us is not a rejection forever. We recognize that entrepreneurs are constantly learning and people will make lots of mistakes,” said Yin, who said a handful of the companies in each batch were initially rejected. “Even if we don’t agree and see eye to eye, it doesn’t mean that we’ll never aligned later on.”

“This is not a one-time thing,” she said. “You’re not applying to college. This is a continuous process.”

Liao said founders who aren’t accepted should ask 500 for feedback and advised them to stay in touch. “As you’re getting traction and making progress, keep us updated,” he said. “We value persistence. And, don’t take it personally. We’re fairly selective.”

 

LatAm Founders Are Hungrier for Success, Solving Big Problems Faster

Anyone who assumes Latin American founders are worse off than their amigos in Silicon Valley has it wrong.

The region’s ecosystem is growing rapidly to support entrepreneurs in every sector, said Didier Quiroz, a 500 Mexico City Associate who joined the accelerator in March 2016. Quiroz, a self-described chilango who was born and raised in Mexico City, provides “a lot of portfolio support” in addition to research, analysis and event planning.

500 Mexico City Associate Didier Quiroz
500 Mexico City Associate Didier Quiroz

“Six years ago, there were a couple of hundred people doing entrepreneurship in tech in Mexico,” Quiroz said. “Now, there’s opportunities for CTOs that have an idea, as well as junior developers who have an ability to build and construct things,” he added. “Seniority doesn’t affect them; if they have an idea, they go on and do it.”

Cultivating LatAm Talent To Solve Big Problems

According to USATODAY, Mexico saw $1B in tech investment last year and counts more than 500K IT professionals.

Although regional founders are just as passionate and driven as American entrepreneurs, they’re also playing for much higher stakes, said Quiroz.

“Latin American founders, given some of the situations that our countries live in, tend to be really hungry for success and are really passionate about their startups and what they’re doing,” he said.

“I know in the US there are passionate people working on everything everywhere, but here, there’s this sense of changing the reality of the people around them because you’re always aware of poverty problems, health problems and finance problems,” Quiroz explained.

In the last six years, 500 Mexico City has invested in 86 startups that collectively generate more than $40M each year.

As diverse as the portfolio is, you won’t find companies offering frictionless laundry service or parking spot reservations. There are two services that facilitate the sale of secondhand clothing, however: Unbisne and Ropanroll.

Several edutech firms connect students across the continent with information that was previously only available in urban classrooms. Misión Admisión offers college prep, LaMusiquta provides music instruction, and Exploiter teaches professional computer security training.

“We have gaming companies, and drone companies and 3D printing for toys, but there’s a lot of people trying to solve bigger problems that we know our government is not solving right now.”

“Great entrepreneurs here in Mexico tend to look at pressing problems in general,” said Quiroz. “Those sectors that are more related to the core problems in our countries are the first that have impact,” he added. “We have gaming companies, and drone companies and 3D printing for toys, but there’s a lot of people trying to solve bigger problems that we know our government is not solving right now.”

The 500 Mexico City Team

“Fintech is very very hot in the world, but in Latin America, it’s even more important because debit and credit card penetration is very low,” said Quiroz. “To buy tech products and services, you need a way to pay over the internet.”

Quiroz, who previously founded a mobile health startup called Disculpe Doctor, said that sector still holds a personal interest. “There’s a lot of things you can do there, especially in countries where you don’t have coverage for a lot of people,” he said. “You need telemedicine or mobile health to heal all these people who are not connected to the system.”

Born in LatAm, Relevant Everywhere

Although the founders he’s working with are from Latin America, they also intend to compete globally, said Quiroz, who also wants to develop more homegrown media startups.

“We need to cultivate more of our outlets in Spanish,” he said. “I know it’s not the global approach, but these companies can can also compete in the US, Europe or Southeast Asia.”

Companies seeking entry to 500 Mexico City need to have their sights firmly set on Latin American growth, Quiroz added. “We want to see that the first step is to approach the whole region from Mexico to Argentina and Chile, and then to take over the world.”

To be clear, applicants aren’t required to be regional natives; they just need to have a damned good idea for a product or service that can connect with Latin American users. “If there are two people from Germany doing a tech startup for the Mexican market, that’s not a barrier to entry.” Quiroz noted.

Un Trabajo Importante: Educating LatAm Investors

Although there’s more access to capital than in many other developing ecosystems, few Latin American investors have any personal experience working with tech startups.

“Most of those people come from a very traditional background, so they don’t understand high-growth startups and how to invest in them,” said Quiroz. “They’re expecting quick returns and revenue, healthy cash flow, and a lot of things that really don’t happen in startups right away.”

Without a frame of reference, “they don’t understand exponential growth,” Quiroz explained. “They know traditional growth that’s backed up by formal corporations with all these departments, but they don’t really understand how a team of three people can grow from zero users to a million or from $10,000 to a million in no time.”

“A lot of people approach these guys who are doing a technology startup and say, ‘OK, you have nothing, here’s 65 grand US, and you need to give me, like, 45% of your company in equity right away,'” said Quiroz. In many cases, these same investors don’t have a local network to support founders down the road, even if they do strike gold, he said.

After a potential VC or LP wraps their head around delayed ROI “and why startups need to reinvest in marketing or growth hacking or product development,” they can be warmly welcomed into 500 Luchadores, the regional fund named after the legendary masked Mexican wrestlers.

After some internal discussion, Quiroz said the Mexico City team decided to change its name.

“We’re calling it ‘500 LatAm’ to make it more regional,” he explained. “Argentinians are very different than Mexicans, so having something in common other than the Spanish tongue can be hard.

Maybe it’s our love of soccer.”

Featured photo: carnagenyc/Flickr

The 500 Accelerator in a Nutshell

Today’s is the last installment in a series of essays by 500 founder Troy Sultan documenting his journey through the 500 Accelerator, Batch 16. Here Troy shares his closing thoughts on the Accelerator, and his opening thoughts for the considerable “Everything Else” that’s on its way. 

To read the rest of the Troy’s posts in this series, scroll to the end of this piece for links. To apply for Batch 18 (deadline June 20, 2016), go here.

It was 10pm on a Monday in November, two hours before the application deadline for 500 Startups’ 16th batch. Two months prior we were interviewed and rejected from Batch 15 — for good reason. We were too early.

The company was barely a couple months old and wasn’t ready to fully leverage the accelerator’s value. While aware of this, we interviewed anyway to learn what that value actually looked like, and if it would be relevant when we were indeed ready for it.

Two months later on that Monday night in the office, we were heads down GSD. My calendar interrupted, reminding me that applications were due at midnight for the next 500 batch.

I broke the productive silence and muttered to Wade for a quick sanity check. “We’re not interested in 500, right? Application is due in 2 hours.”

Wade: “Nah. What’s the value?” I agreed, and that was that.

“But wait!” my brain said. “Lets torture ourselves by imaging a fictional scenario where we regret not applying at some point in the future!”

So I blurted aloud, “Imagine —just for argument’s sake — sitting in the 500 office a few months from now laughing with new friends, fist-bumping over big wins, having grown and learned in unimaginable ways, looking at each other asking, ‘Can you image if we didn’t apply?’”

Fast-forward 6 months, and we’re now 500 grads.

Filming our batch video (full video at the end of this post)

While it’s feels impossible to fully capture in a blog post, I try my best to highlight our experience below.

Some lessons & wisdom we’re walking away with:

  • The people you think have their shit together, don’t.
  • You’re great at some some things and suck at others. Figure out both quickly.
  • Some of the best companies don’t reflect it at the seed stage.
  • As an investor or employee, if you consistently pick winners at the early stage, you’re lucky, not good.
  • Ability to fundraise at the seed stage is largely dependent on you running a “tight process”.
  • Shit happens at every early stage company: cofounder breakups, down months/flat revenue, bad hires. It’s not just you.
  • When your company starts to grow, things get harder not easier.
  • You’re more than just the founder of a company. You’re a unique human being that others love regardless of your company’s outcome.
  • You must find ways to enjoy the journey or you’ll go insane (this one is particularly tough for me).

Other takeaways from our experience:

Focus & Direction

Our target customer changed. We went from selling into multiple customer types to one. This led to us refocusing our product roadmap and feature set, refining our sales and on-boarding process as well as our messaging. We’re more focused.

This changed the way we’re thinking about the business as a whole, which comes with it’s own challenges. Contrary to my broader point here, we’ve lost clarity on the company’s long-term vision as new learnings and opportunities came to light. We’re becoming more comfortable with not building the big vision now and focusing on the immediate opportunity in front of us as things will change.

Collaboration + Community

It’s easy to build in isolation. Isolation from customers/users, friends and family and other entrepreneurs in the trenches. I’ve written before about thepsychological challenges of company-building and I believe isolation is the breeding ground for these. This is something the 500 environment helps you avoid.

The office space was one of my favorite parts of the program. It’s an intensely collaborative space where you can’t avoid cross-pollinating with creative and vulnerable minds on similar journeys. Pains. Lessons. Growth. Fundraising. Hiring. Firing. Emotional swings. Swapping stories. Friendship.

The level of intellect, curiosity, hustle and standard that permeates the 500 office and community is both contagious and addicting. I felt FOMO regularly when leaving the office. I knew that time spent elsewhere had less of an impact on my personal growth.

That said, there’s a clear downside to this setup: distraction. It’s easy to spend the day bonding with batchmates and not building your business if you‘re not disciplined. It’s easy to convince yourself the relationships are valuable (and they are), but there’s a direct impact on your bottom line for each hour you’re not heads down. As they say, balance is key.

Network, Learning and Inspiration

There’s something to say about building a powerful network in a friendly, organic environment vs. one that feels forced. We know a lot more smart folks now than we did before the program and those relationships feel real as opposed to transactional.

We met dozens of operators and investors who came by for late-night chats and shared insights on their mindset and entrepreneurial journey with off-the-record candidness. And they were accessible. We connected with many of them personally who were genuinely interested in being helpful.

Two sessions that had a memorable impact on me were Gary Swart of Polaris Partners and Jess Mah of InDinero. They served as a strong reminder that we’re all human; that we all go through hardship. It’s the ones that don’t give up who win out.

From an evening chat with Wesley Chan of Felicis Ventures, an under-publicized fund with massive wins:

Support & Validation (or a punch in the face)

Confidence is a huge part of staying the course as an entrepreneur, and having a sounding board to let you know when you’re killing it (and when you’re fucking up) is invaluable. The 500 culture is exceptional at telling you like it is, no filter.

He loves us.

The 500 partners have seen hundreds of companies pass through the accelerator, so learning what other later-stage companies looked like at seed makes for an interesting perspective. It’s an implicit measuring stick and helps build confidence when you get praise and create a fire when you’re slumping.

You learn that the teams touting growth, getting press, raising large rounds are, again, just normal humans. Like you and I. Smart, hardworking people who muscled through the troughs. That’s it.

You leave 500 deeply believing this.

Trust

Building a company is a lonely journey. We got close with the 500 team who genuinely care about our success, and not just because they’re on our cap table. They care about our emotions, mental health and how much we’re enjoying the process. They know all days won’t be good ones. They invest in you ability to win long-term and they make that clear. I’ve never felt pressure to exaggerate numbers or disclose anything but the exact truth about the health of our business, my psychology, worries, challenges or concerns. It’s hard to put a price on that.

And although B16 is winding down, I feel like we’ll have that trust forever.

Last but not least: Fun

To my point above on enjoying the journey, we had insane amounts of fun. As a fellow batchmate likes to say, we burned the candle on both ends. I’ll tell this one in pictures:

That night we all went out in suits. For no reason.
Batch ski trip to Lake Tahoe
BBQs on BBQs
Farewell dinner 🙁
More BBQs

After the program ended, a batchmate and I sat in my apartment reflecting on our experience. Best parts? Worst parts?

While this post summarizes the good, we were at a loss for the bad. Sure we can nitpick: mentor whiplash (major first-world problem), seating charts, scheduling, wifi and A/C issues (if I showed up to a meeting with you sweating, it wasn’t nerves I promise) but we had no substantial knocks against our experience — honestly. It was incredible.

That said, our conversation landed on a massive caveat:

You get out of the 500 experience (and other accelerators, by our guess) what you put in. Accelerators are kitchens, not restaurants. You have to get dirty and cut through the noise to find value for team and your business. One can easily go through an accelerator and get marginal value from it. That’s the asterisk next to most self-driven learning models and, well, life in general.

My recommendation

If you’re an early-stage founder, I highly recommend considering an accelerator, whether 500 Startups or another. If you think your business is beyond the ‘accelerator stage’, I’d reconsider (at least as it relates to 500). Much of our batch raised $500k-$1M+ prior to the program and some had up to 20 employees. I’d bet they feel similar to us about the experience.

Do your diligence on existing programs, talk to alumni founders and partners and decide which program is the best fit for your company.

While it’s hard to know today the affect 500 will have on our business long-term, it certainly feels like we made the right decision. It’s changed the way we think — and that lasts forever.


Thanks so much for following our journey 🙂 If you’re interested in joining 500, applications for Batch 18 in SF are now open. Apply here and let me know you applied.

P.S. — Check this out:

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500 Startups Batch 1 — 5 Years Later. Where Are They Now?

At 500 Startups, each group of founders that is accepted into the accelerator’s four-month program is called a “Batch,” an apt description, since participants receive a series of commands they’ll later process and execute.

The founders who presented at 500 Startups Demo Day in August 2011 are considered Batch 1; today, Batch 17 is entering week six of a four-month program that will culminate in their own Demo Day, the product of intense study, practice and camaraderie.

Batch 1’s pitches were presented at 500 Startups’ Mountain View office, but today, Demo Days are held at Mountain View’s Computer History Museum, a venue that can accommodate hundreds of attendees, including investors, friends and the media.

High production values give these pitch sessions the same vibe as a high-energy stage show, but some things haven’t changed since Batch 1: participants continue to be “unified by a strong international and female founder thread and ‘attitude,'” a trait TechCrunch noted in its August 2011 Demo Day reporting.

Today, a look back at several companies that participated in Batch 1 Demo Day to see how far they’ve flown since leaving the nest.

Kudo

Based in Indonesia, Kudo describes itself as “an Online to Offline (O2O) company, bringing e-commerce to mass millions of Indonesians.”

In practice, this means creating sales kiosks in public areas that accept several forms of payment. By targeting consumers in physical spaces, Kudo’s founders hope to drive sales from people who might not be inclined to order online or visit a store.

Because approximately 81 percent of Indonesians don’t have bank accounts, Kudo’s payment and logistics platform bridges financial and technical gaps. Customers use Kudo kiosks to refill mobile phones, purchase tickets or buy physical goods.

Where are they now?

In November 2014, founders Albert Lucius and Agung Nugroho closed a seed round; six months later, their metrics were strong enough to land a seven-figure funding round.

Vidcaster

Vidcaster, a “video experience platform for marketing and training,” created custom workflows that let users easily promote, distribute and manage marketing and training content. Offering turnkey solutions that included hosting and SEO, co-founder and CEO Kieran Farr told TechCrunch that he followed Dave McClure’s advice to launch a freemium service that would augment his existing subscription services.

Three months after Demo Day, Vidcaster raised a $350K seed round, which gave the company enough runway to integrate with Salesforce, Hootsuite and Marketo, increasing its reach. After winning a grant from the City of New York to “hire and expand in Lower Manhattan,” Farr relocated the company from San Francisco.

Where are they now?

In December 2015, Vidcaster was acquired by Vidlet, a marketing research company based in Palo Alto. Farr remained aboard as CTO, where he helped the new company develop a service that uses smartphone cameras to conduct ethnographic research.

Snapette app, via Facebook

 

Snapette

Initially an app that connected shoppers with nearby shoes and apparel, Snapette quickly grew into an ecommerce discovery platform with more than 2 million users.

Where are they now?

In October 2011, co-founders Jinhee Ahn Kim and Sarah Paiji closed a $1.5M seed round; in August 2013, after partnering with more than 200 brands and stores, Snapette was acquired by PriceGrabber, a price-comparison shopping site, for an undisclosed amount.

Looksharp

InternMatch, a jobs marketplace for internships and grad students that launched in 2009, raised $400K in angel funding before securing its berth in Batch 1. While going through the accelerator, founders Andrew Maguire and Nathan Parcells redesigned their site to improve usability and search. A month after their demo, they raised an additional $500K.

Where are they now?

Initially focusing on west coast opportunities, InternMatch gained traction by building a large team of brand ambassadors who were also marketing interns. Employers pay to post listings, but students use it for free. In January 2013, the company raised $1.2M in a bridge round to expand its services to include internships and traditional paid positions for enrolled students and recent graduates.

Six months later, a $4M Series A round allowed the company to add more engineering and marketing roles and develop data products to match users with open positions. After changing its name to Looksharp, the company acquired competitor Readyforce in December 2014.

Today, Looksharp currently claims to serve 10 million users, or 70% of all new graduates and college students.

Elizabeth Yin, 500 Startups EIR, co-founder LaunchBit

LaunchBit

LaunchBit, a customer acquisition tool for SaaS companies, was created to help publishers send content to B2B audiences via niche ad inventory such as newsletters and blogs. The firm also helps publishers identify and manage ad units that can be inserted into email newsletter.

Where are they now?

A year after Batch 1, LaunchBit raised a $960K seed round and relocated from the Bay Area to Las Vegas in search of “cheaper operational costs and a better talent pool to tap,” co-founder and CEO Elizabeth Yin told tech.co. After BuySellAds, a LaunchBit partner, expressed interest in an acquisition, Yin realized that her “passion wasn’t in ads.”

After LaunchBit was absorbed into BuySellAds, Yin joined 500 Startups as a Entrepreneur-in-Residence, and now runs 500’s Mountain View Accelerator as a partner in the firm.

Batch 17 Demo Day is August 2, 2016

Batch 17’s Demo Day is already on the books for August 2, 2016.

Active, accredited investors and their representatives are invited to join our founders and our team at the Computer History Museum in Mountain View on August 2 from 12 – 6pm.

Demo Day requires pre-registration.

Sign up to join Batch 17 Demo Day here.