In the latest episode of my podcast, Building in Public, I interview Matt Cartagena, Co-Author of Accelerate: Founder Insights Into Accelerator Programs. In the interview we talk about who should apply to an accelerators, the value accelerators provide to startups, fundraising on Kickstarter, and content marketing. Read the transcript below, or listen to the audio here.
Startup Accelerators: What You Need to Know
Matt: our book Accelerate was authored by myself as well as Luke Deering who’s the lead author and Chris Dowdeswell.
Long story short it actually started as a blog where we’re interviewing entrepreneurs who have been through accelerator programs, started with accelerator programs. At one point we’ve had hundreds of interviews with these entrepreneurs and eventually launched a Kickstarter campaign to self-publish the book about the Accelerator landscape and the Accelerator experience and from there we eventually got picked up by FG press and got published and no we recently launched Accelerate in August.
It combines 150 different interviews which startup with accelerator graduates to really offer sort of a comprehensive guide on applying test self-accelerators, going through the experience, the business planning process, fund raising, pitching and really everything that I guess aspiring accelerator participant would want to know.
What is a Startup Accelerator?
For those who aren’t too familiar with accelerator programs, one way to think about it is, these are kind of like startup schools or startup bootcamp as I like to call it. You would apply to this program as an entrepreneur, acceptance rates are typically low when it comes to top tier accelerator programs, like Techstars, Y Combinator.
If you’re admitted you’d typically have something like a three month process. In these three months, you’re surrounded by mentors, successful entrepreneurs. You’re offered workshops and lots and lots of highly focused advise from these mentors.
Eventually it culminates with a demo day where you’re pitching to prospective investors.
Also worth noting, in the very beginning you’re typically given something like $18,000 or $25,000 in seed capital, this can vary depending on the Accelerator program but this will be in exchange of small amount of equity.
That’s basically the book and the short intro to what accelerator programs are.
Fundraising and Customer Development Through Kickstarter
Mike: Very cool. So it’s interesting you did the Kickstarter campaign. Basically you started a blog and it was going pretty well, I assume you’re getting feedback on it. Then you decided to may be do a bigger version of it, do a book on it. You launched a Kickstarter campaign instead of going ahead and self-publishing it. What do you think is the motivation behind the Kickstarter campaign and you think it was a good idea looking back?
Matt: I think Kickstarter’s wonderful especially for validating ideas. Even though we had the blog, we had pretty good feedback on the blog for sharing these interviews. We took it one step further to validating if this is a publication that people would buy into.
So instead of going straight into self-publishing which would have had an upfront cost that would have came out of pocket, Kickstarter was just terribly convenient, way more convenient way of validating that and getting the funds. For us it just made a lot of sense, and I think Kickstarter’s also pretty embraced by the startup community, so for us it wasn’t an unfamiliar platform for our target market to use and to pledge for our campaign.
Mike: Yeah, it makes a lot of sense. You get the customer validation that there is actual demand of the book before you go ahead, and it can also be used like an advance, like the way a publisher would give you an advance for your book, you got that from Kickstarter.
Matt: Yeah, although we had most of the content through the blog, the real hard work, the real publishing, the design and these things, we hadn’t done until we finished the Kickstarter campaign. For us it was a matter of sequencing too and Kickstarter allowed us to do that. If we didn’t have our funding goal then we don’t necessarily go through with the process. Fortunately we did and it help us and be that much more confident that we are to something really good.
Mike: How much did you raise?
Matt: It’s about a little bit over $12,000.
Mike: Awesome. That’s more than enough to do your book.
Self-publishing vs Publishing
Mike: After that you decided to go to a publisher anyways, what was the motivation behind going with the publisher?
Matt: We had actually fulfilled on our book, we had actually got all the self-published versions out to the backers for Kickstarter. Then a bit after that, a few months after that Brad Feld’s company had actually launched out a publishing arm called the FG press, so it’s relatively new at that time.
They reached out to us because Brad actually ended up writing the Foreword for our book, we’re agreeing for him to write the Foreword for our book about midway into our kickstarter campaign. We had already had some great conversations with him about the book. When we did finally publish and launched successfully he mentioned to us that you know he asked if we’d be interested in joining FG press and we said yes because Brad Feld who’s incredibly well-known in the start of the community, he’s got a very great network and I think FG press with that particular focus is on has really startup’s entrepreneurship. They’re right in the middle of the community that we would love to get pushed through, so there’s very much an alignment of interests and alignment in community. For us it just made sense.
Accelerators VS MBAs
Mike: Yeah, that makes a lot of sense. Getting back to the book content, I think it’s super interesting. You’ve provided a lot of transparency on Accelerator programs where there hadn’t been a lot of transparency previously.
Like you said you think of them like a school for startups and I think that’s a really interesting way to think about it because you have all these colleges and MBA programs and they basically charge you a whole bunch of money like even up to 50k a year or whatever it is for tuition and they don’t quite teach you the skills that you need to do a startup.
I mean I know some schools with entrepreneurship programs and they don’t really have their incentives aligned with you. So it doesn’t matter if you get out of college and do well.
What I think is great is that accelerators align their incentives with you by actually investing in your company so they have vested interest in you succeeding. There’s been another thing where I think there are so many accelerators lately. There’s a lot of jabber around like too many. If you compare the number of people going to accelerator to the number of people going to college, I think there’s kind of a humongous gap that makes it seem like there aren’t many accelerators but nonetheless with all the growth in accelerators, I do think it is important to do quality assurance on these Accelerators.
The Truth About Startup Accelerators
Mike: So what kind of stuff did you find in all the interview that you’re doing with founders, what were they saying that they liked and disliked?
Matt: You mentioned some really good points that we’re brought to the conversation with some entrepreneurs we’ve spoken to. First off like it is really if someone’s interested in going into an accelerator program, it is their responsibility to make sure they’re going into one that’s a good fit for them and they kind of done their research if this is right for them generally.
But as far as the accelerator experience, everybody in the book that’s mentioned has said in some fashion or another that accelerator programs were incredibly useful for them, you know whether it was Y Combinator, Techstars, AngelPad, SpringBoard out in London, their company wouldn’t be where they are if not for this experience.
As far as things to watch out for or be careful of, I think that it is true that not all accelerator programs are created equally. Accelerators are, if you pay attention enough to the news you can you can see there’s a lot of these popping up, there’s a lot of accelerators popping up. In fact there are even when it comes to specific verticals in different industries but some accelerators might pop up and in the next half a year or year they’ll be gone, right? They’re kind of just like startups themselves.
So I think definitely be careful at making sure that the accelerator has what you need and will be able to offer what you need as a founder. I think one way that’s kind of that automatically diligences that for you is looking at the reputation and looking at something like the global accelerator network as a network of I think over 70 accelerator programs that kind of had the stamping approval, as far as being a credible accelerator program so it’s something like that.
On a lower level of the accelerator program experience, I’d say it varies from founder to founder and startup to startup but the accelerator program experience in general is designed to be very very intense. I think typically a lot of people think “Okay it’s an accelerator. It’s going to get me where I need to be, it’s got everything, it’s got the community, it’s got potential investing” but it’s actually three months of a lot of hard work. So if you’re not mentally prepared to go through that which in some cases a lot of startups experience, you’ll potentially have a lot of delay in operations. You might not get as far as you expected, as far as validation or customer development in these things.
Even situations like mentor whiplash. When going to these programs you’re exposed to lots of different varying advice from different types of entrepreneurs. What ends up happening is you can potentially creep into this crisis on what to do with your company or which advice to take. When at the end of the day, no advices is actually right, it’s really something you have to wad depending on your specific circumstance.
I guess the lesson there is from a lot of entrepreneurs is be prepared going to these programs. It’s not easy. It’s a very fortunate circumstance to be admitted into one of these specially great accelerator programs. By speaking with alumni of the programs, asking them questions that you really want to know making sure that you’re on the spot that you need to be, make sure you’re ready to hit the road.
Should You Apply to an Accelerator?
Mike: Who do you think accelerators are best for? Who should go to an accelerator? Generally, accelerators will give you a slightly lower evaluation than you would say a seed venture capital fund and you’re getting a lot of mentorship and maybe not every founder feels like they need all that mentorship or maybe they feel like they deserve a higher evaluation. Do you think there are circumstances where it makes more sense than others for a startup or a founder to get through an accelerator?
Matt: One of the key things that you get from accelerator right, one of the biggest things is a place in the startup community. You’re put smack in the middle of a concentrated startup community that’s built around as accelerator programs, so that’s successful entrepreneurs, investors, mentors and these sorts of things, so that is one element of an accelerator program.
If you can judge as a founder that’s not going to be something that you desperately need or you really need and maybe you already have access to that environment and you’re decently well-connected maybe it’s not for you. Typically people in that criteria, found to be in that criteria are at the later stage and maybe they’ve already secured some sort of investment and their company is in maybe two years or three years and they have some media exposure right.
So generally speaking I’d say, as far as the characteristic, younger startups typically fit that criteria a little bit more. As far as the other elements so the accelerator program, does your startup need these things? Does it really need funding? Does it really need mentors? Does it need this network? Does it need to pivot? Does it need to figure out its value statement a little bit better? Does it need to provoke customers? So if you do not need answers to those questions anymore then maybe the marginal value isn’t for you.
What is the Best Accelerator?
Mike: That makes a lot of sense and given the research you did for your book and otherwise, what do you think is the best accelerator?
Matt: You’re going to get me in trouble. There’s two ways to look at it, there’s rankings published out there we even have ranked in our book we’re at the top 30. Generally it’s accepted that Y Combinator, Techstars are the top 2 accelerators.
The criteria that goes into establishing this ranking exits from startups, fund raising that’s been able to get in from these startups, maybe revenue as well. So these are things that I think mark, if anything not necessarily the best accelerators for a particular startup but the most successful and credible accelerator programs. You obviously can’t go wrong, generally speaking with something like Techstars, Y Combinator, these are kind of like the Harvard, the Princeton, the Stanford of accelerator programs.
We spoke with Patrick Riley who’s head of the global accelerator network and he got a good point. Generally the Y Combinators accepted as best accelerator program out there but if you look at a startup in the middle of the country, somewhere and their industry is gaining or something else, the best accelerator for them probably isn’t Y Combinator, it’s probably something closer to where they’re located in headquartered and focuses more specifically on the gaming of industry and it would potentially far more connected with the gaming industry investors and entrepreneurs over there and offer them specific guidance on where they need to go, how they need to focus on products and things of this nature.
Generally the accepted number one accelerator program is Y Combinator depending who you ask, it might be Techstars but I think when startups are asked with this question they use to be a little bit more, they need to be answered differently.
Mike: I think it makes a lot of sense with that kind of framework looking at the past successes of the startups that have gone through the program and then thinking about what makes up for most sense for that specific startup based on geography or industry.
How to Write a Book
Mike: I want to go back to the writing a little bit. Writing a book seems like a huge undertaking, and I know you’ve got lots going on, what was your biggest challenge in terms of just cranking out the book? I also know that you’re working with team mates on it, so did that present any interesting challenges?
Matt: Well I guess the experience in general was definitely pretty new. With our book is, since it is a compilation of insights from different founders, a lot of it was curation and kind of quality management of that content. So definitely a lot of review and things like this.
The writing process that we did narrate around it was interesting. I mean myself, Luke and Chris we try to be well I always like to speak for myself, I’m no expert on the writing process but as far as this concern I think I involved a lot of coffee for one as well as trying to establish getting in a routine of writing. Sometimes even though it might not flow as easily today to write content, if I did it in a habit of that it tends to come more simultaneously.
And as far as working with a team, well Luke’s actually out in the UK, while I’m here in the New York area and it was interesting. We collaborated virtually whether it’s through Skype to speak or Google Hangouts to speak and then we use Google Docs a lot, we used it a lot, a lot.
If it wasn’t for tools like these it would have been nearly as easy, I’m not saying it’s easy but it wouldn’t have been as doable.
Mike: Any other tools or apps that you use for the actual writing process as opposed for the collaboration process?
Matt: No, it was mainly that and you know Luke it’s a shame he could have been here to tell you, he would be better to answer a lot of the publishing questions but as far as tools you know it was mainly that, Google Docs that when it came to editing, making sure spelling is right and all that, at least the first out of it, we put that out in Microsoft Word, it’s a little bit more robust but as far as anything really specific particular, I can’t say that we have anything worth mentioning.
Mike: Yes, I use Google Docs as well as for my writing experience. Is there anything you feel like you wish you had? Or is there any sort of challenges you had that you weren’t able to be met by Google Docs and the publisher or everything else you used?
Matt: I don’t think so. Like I said, Luke could have be on this one, he would probably have a list of it for sure, but nothing really comes to mind.
Book Marketing: How to Sell More Books
Matt: Yes so at the moment, we’re both marketing the book. This is interesting, so I think particularly when it comes to our target market, well what we’re finding is obviously social media we have that, we don’t neglect that, Twitter, Facebook – Twitter specially you can find a lot of entrepreneurs that we need to find and get the message to them.
In the very beginning because of the nature of our book, because it involves 150 entrepreneurs, we try to start from there, so getting the message out to them and help it push it through their network which attempt volatile marketing to some extent and leveraging other people’s network that we otherwise don’t have access to.
Aside of that, our goal with book is to really become a key resource for anybody trying to, or thinking about applying to an accelerator program. Where do these people typically go to when they think about applying to an accelerator program? They often times go to startup events, startup meet-ups. They go to forums to look for this type of insight.
Now it’s interesting there’s actually a new evolution in the startup landscape which is called pre-accelerator programs. So our focus when it comes to marketing is making sure we have a presence in these organizations, the presence in these establishments and these communities.
Mike: Yes I think your marketing strategy is really smart and definitely can be applied to any product I think. You’ve looped in the people you interview – they’re kind of engaged with the book so you can get them to distribute to their network.
You decide you have, you created a customer persona which is an early stage startup founder that is thinking about going through accelerator program and you’re just thinking about where they hangout online and offline so as startup events, pre-accelerators, Twitter, etc. It’s smart of book marketing and and any other product.
The Benefits of Writing a Book
Mike: What’s next for you Matt, what are you working on next and do you plan to do another book?
Matt: I am spending my time between this and VineUp which is the startup that Luke Deering founded. I spend my time in this and heading up sales for the US over there.
So at the moment it’s really these two babies so to speak and I guess what’s next for me it’s kind of hard to tell, I think with any entrepreneur, or someone’s working on their project but I would absolutely love to author another book.
Can I tell you what’s it’s going to be now, not necessarily, I have some ideas but I definitely do see that on the horizon. I think it’s an interesting journey to write something, not just the actual process of it but publishing something to put out there for me personally was a little bit frightening at first, like you put your name on something and it’s on the front cover, it’s kind of a growing process that I’d like to even go through again.
Mike: That’s awesome. I definitely get a ton of value from writing and self-publishing as well just from somebody who thinks writing is as valuable it’s going to have, it’s great marketing channel, it’s a great way to make money and it’s also automated, so after you get it out there, it kind of continually pays you. Anything you think you would do differently next time around?
Matt: Yes, I think for one, back when we did the kickstarter campaign, we went from zero to launch pretty quickly on that campaign. I think planning, we probably – not that it broke us, but I think there were some things we could have planned a little bit better and mapped out the landscape a little bit better and mapped out the strategy. Also when it comes to this launch, we’ll be launching to the publishers, I’d say and this is something that I actually point back to Ryan Holiday, who publishes lots of great insight on marketing – is doing a lot of stuff ahead of time, like doing things you’re going to dread ahead of time so that when it comes to you, you’ve already made the framework how to do it.
When it comes to content marketing, write your blog post, your guest blog post up front before you’re getting thick of the launch, that way you’ll be able to sort of tackle the thick of the launch with a little bit more of a clear head and you have more flexibility in doing things instead of getting to a point where you’ve launched alright and you got to write lots of content to publish when it’s on your blog or someone else’s blog, I think that one major things that I could have done differently.
Content Marketing on Slideshare
Mike: Very smart. Do you slide share as a marketing channel?
Matt: Yes, we did that and we may do that more. We did use slide share as a marketing tool and we published a top ten pieces of advice from applying through accelerator, it got lots of use but for us it didn’t seem to move the needle, too much in terms of purchases — but the reason why I said we may try it again is very early on in the launch, so it did get viewed, it got spread, or did spread and it’ll be interesting to see if it got more attraction a little bit further down in the launch.
Mike: Yes, How did you get the slides’ designed and make?
Matt: Our publishers – we have a wonderful designer over there.
Mike: Yes, it sounds like a great book, definitely valuable resource I think, it’s kind of like I said before kind of all transparency out on the topic, and it’s a good thing to find founders were thinking about doing an accelerator and then definitely cool to hear about your book marketing stuff, it makes a lot of sense, so anything else about the book you think would be valuable, or anything else about accelerators you think would be valuable to know?
Matt: I mean we’re excited about it, I think it’s a new developing landscape still, you can kind of see first-hand, you’re pretty involved in the startup community, how this landscape is evolving, so as I’ve said we do plan in updating this whether it’s annually
Check out Matt’s book Accererate: Founder Insights into Accelerator Programs at fgpress.com/Accelerate.
Listen to this interview and more on itunes at https://itunes.apple.com/us/podcast/building-in-public-lean-startup/id919172274
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