Life After #500 Startups – What Did We Learn?
It is likely that many of our users have no idea what has happened to our team in the last four months – unless you are addicted to the #StartupLife or enjoy listening to the profanity that is Silicon Valley veteran Dave McClure and his rallying (and encouraging) cry of “Just F**kin Do It!”.
Life at a startup is certainly one big rollercoaster ride. Here we will rewind the clock and give you a insightful timeline of events from where we were to the exciting place we are now.
A Surprise Invitation
Back in the summer, we were furiously working on the apps, the platform and getting ready for a fundraising effort to further develop our OWLR platform for you – our users. We were in discussions with all sorts of investors and busy preparing for our fundraising campaign efforts. And then, we got a surprise invitation from 500 Startups.
After a gruelling few months of hard work and labour (all in the name of delivering a quality app of course), this email was a welcome surprise. All of a sudden, OWLR HQ was not going to be the same – we were at an exciting turning point in the company. On an other note, lives were in disarray as there was limited time to leave London and make it across the Atlantic to San Francisco and start this illustrious program!
Fundraising had to take a backseat. We had previously closed half our round and lucky we had as 500 Startups told us we were worth a whole lot more! So with the invitation locked in the bag, three OWLRs (founders Sanford Dickert, Chris Jenkins and Business Developer Stuart Gardner ) booked flights and headed to Silicon Valley to kick start the 500S Batch 19 programme on behalf of Team OWLR.
In the words of OWLR CEO Sanford Dickert, here is a recap below of the ins and outs of 500 Startups.
What is #500Startups?
A number of years ago, a product manager named Dave McClure who had a fine career in startups like SimplyHired and PayPal, made a name for himself being an advocate for how to make startups succeed with his trademarked AARRRH Pirate Metrics.
Later, he had a terrific stint as a member of FoundersFund’s Facebook app fund — and, in doing so and saw there was another hole in the market. He felt that there were a number of smaller, scrappier startups that were getting ignored – ones that could be found in the barrios of Rio, the foot of Table Top Mountain in Cape Town, the concrete jungle of New York City or even the cobblestone roads of London.
500 Startups was born on the premise that investment of smaller sizes to bring companies to the attention of other investors would be a good thing – and that by extending across international geographies — the next Facebook or PayPal could find traction that they might not otherwise see the light on investment.
In the years since its inception, 500 Startups have grown their investment fund and extended their program to provide for bigger investments to a point that they now invest funds into a company in their own convertible loan note which gives the company freedom to grow and benefit in future investment rounds.
In their years of investing in companies, 500 Startups have had a number of successes on their record which you can look at on their site. But our excitement was more than just capital – it was based around what 500 Startups boasts – a “Just F**kin Do It!” attitude.
What Happened at #500Startups?
Four months can go by incredibly fast and to cram all the experiences into a post is kind of tough – but here is a short listing of the highlights with some help from our Batchmates (fellow startups that we participated in Batch 19 with):
- Watching Preview Day for the prior Batch (Batch 18) in San Francisco after a 11 hour flight from London.
- Going through Marketing Hell Week the following week and learning how AARRR evolved into different specialties from various mentors/experts.
- Hanging with Batchmates in a spartan office with its redeeming factor of offering stunning views of Silicon Valley. This was particularly inspiring as we worked all hours into the day and night.
- Spending all sorts of time with our fellow Batchmates and learning about their products and experiences that they have overcome in the startup world.
- Perfecting our pitch decks to included five page teasers, ten-page followups and then two-minute Demo Day pitches for potential investors.
- Conducting investor meetings and and honing our Demo Day debut – practice, practice, PRACTICE!
Pros and Cons – or “What Did We Learn?”
Aside from the program above, a lot came out of the experience that I think we (and others) really benefitted from – from a company self reflection point of view and who we want to become.
How does 500Startups compare to Techstars and YCombinator?
Around the same time we got accepted into 500 Startups, we had already submitted to YCombinator (YC) and Techstars in London. We were waiting for YC to respond and wondered would it be “better” to do YC over 500 Startups or do both or what.
Please note: the following reflects what we learned from other Batchmates, locals in the industry and in general other founders who have undergone the programs themselves.
- YCombinator — Great brand, larger number of companies (100+), no shared coworking space, primarily weekly meetings on Tuesdays and mentor/office hours when needed. Rumour has it that YC “picks winners in the first few weeks and then directs its energy primarily on those winners.” The other companies are supported, but at a much lesser intensity and YC does support “cross-pollination” between YC companies. Very little handholding, great alumni/speakers, smart financials and an incredible reach and investor engagement.
- Techstars — Much smaller class, much more handholding with service providers (e.g., design finanicals, legals, etc), coworking space and stronger event programming efforts, not as strong a brand as YC or 500 Startups. Excellent programming and nurturing of startups. Investment effectiveness usually addressed at the beginning through the Techstars investment thesis of local investors (e.g., angels, institutionals) where feedback on next class is added.
- 500 Startups – Often likened to the Roman Colosseum – ”Throw all teams into the arena, throw raw meat into them, see who and what comes out at the end.” Much larger Batch and thus, less handholding. It is speculated that batches are separated into odd and even groups whereas even-numbered groups are the “control” group and odd-numbered are the experiment groups. Great co-working space, educational opportunities, event programming, strong focus on distribution and growth to match companies to the right investors.
For OWLR, at our stage, 500 Startups was certainly a great choice. They are very much into showing you that you have to make the most of what you get out of their program and not to expect so much “handholding”. They give some introductions, but you have to hustle and make the hay yourself; no one is doing the matchmaking.
- Great for non-business founders – The focus on understanding data-driven choices (which may seem obvious) is only as powerful as the person being receptive to the lessons. After the education and the drive to understand how the business is driven by metrics – it is well-worth the trip!
- Commiserating with like-minded founders – The startup world is a scary place and one must be open to taking big risks. The worse part of building a company is having outside influences sometimes get the best of you; people around you are working at (relatively) stable jobs, having the stresses of parents and loved ones worrying about your future as well as expressing concern for your well-being – all valid and justified reasons of course. Being around a large group of people who understand the pain and daily roller-coaster really helps to buoy yourself against the natural ups-and-downs from the effort of building your vision.
- Creating a haven – This may sound identical to above, but the fact that 500 Startups provides a co-working space for the Batchmates is a key benefit. By providing an open-space with minimal furnishings almost ensures that others will engage – even the most introverted. We all spent time in Batch Meetings, mentor sessions, food nights and even celebrated birthdays together. These simple environs allowed for such comradery that even after the program, we are still in constant touch with our Batchmates regarding investors and conversations – celebrating and commiserating our success and learnings.
- Access to Investors – Unlike the cold-calling that you may or may not do, bringing interested investors to the office is one of the excellent efforts that 500 Startups provides. Oh yes, we do continue the pursuit of contacts, but the investors themselves are also somewhat self-selecting, putting themselves out there for connection and access. Granted, you might get speed-dating type conversation, a Draper Dragon meeting – but there are always others looking as well and that is a terrific benefit that you are more visible in the marketplace.
- Good hearted team and organization – While we will include cons regarding aspects of our engagement in the programme, the overall 500 Startups team from Elizabeth, who was the head of our program, to Lupin, Tanya, Eric, Aaron and Rob, our track’s fearless leader and the person who most supported our inclusion of 500 Startups. This list would not be complete without the person who took care of everyone and everything, Chelsea – a person that few of us could do without. Thank you all.
- Dave is a spiritual guide, not a physical presence — it may be different in other Batches, but Dave was there only a couple of times over the four weeks. We did get a day of his tutelage, but even then it was short and sweet.
- Sometimes, your POC is (too) busy — following on this theme, our POC (point-of-contact) was either too busy for conversation, parsimonious with his time (“You have five minutes, speak now.”) or simply traveling the world for 500 Startups funding. Truthfully, when we had time with our POC, the gems of learning and knowledge were incredible. We felt that we really benefitted from that guidance. But as things got heated, it sometimes felt like our “father” created a barrier when we could have used his guardianship. Now — to be incredibly fair — he was in the midst of one of the biggest raises for 500 Startups, trying to find future startups for 500 Startups around the world and managing his batch of startups in this Batch. We wish we could have had more time with him — if only he was more comfortable with the Beam!
- Lots to do, no time for it all — almost every year, I go to conferences and there are a multitude of events to go to, schmooze and the like. And, like all of you, I often lament at the inability to do all of the programming I want during such a limited timeframe. At 500 Startups, the act of the programming, the deliverables (the aforementioned pitch decks), the process of filtering 2000 potential investors combined with the constant effort behind running and building your company is a pressure you may or may not thrive upon. Sometimes, we were seeking some help in the process (some more detail on the investors we were being potentially introduced to), but this point is also a pro — since it is about balancing yourself and your priorities.
- Map the program out sooner — one thing that surprised us initially was the expectation that we had to be in the offices the entire time, rather than what other accelerators do — which is expect people to come in and out of the space over time. In two weeks, we dropped our lives in London to join the program thinking we had to be there the whole time. If we had a better understanding of the calendar for the four months ahead of time, we might have made slightly more informed choices and saved some money (re: flights and housing).
- Centralize on a set of tools — too many channels for information, too many sources of “the truth”, sometimes work projects given when maybe could have benefitted from some standardization. One internal conflict occurred when given a list of investors — which had little to no detail aside from they were sourced from 500Startups. While this was accessing POC’s personal contacts, a number of the Batchmates were frustrated since there was little explanation and some (erroneous) expectations that the details were “supposed” to be provided if other Batches has been using this list before.
Winding this up
One of the challenges about writing this post about 500 Startups is that others will read this and wonder “Why is he slagging off on them?” And to be clear, I am in 100% support of what 500 Startups did and do.
Every day is a chance to learn.
Every day is a chance to make something better and more in line with our values and vision.
Every day is a chance to help others.
500 Startups — like many other accelerators — give new, up-and-coming and ongoing companies a chance to learn and grow — whether directly from the accelerator team, the companies within the batch or even the situations that surround the environs.
We grew in 500 Startups — with investment, with practice, with conversations and with vulnerability. What we learned is that every company in the Batch, no matter how successful or how fragile they are — they can contribute to all of the others in the Batch — and the world.
For the numbers people:
- OWLR grew from 450K downloads to 650K downloads.
- OWLR grew from 90K MAUs to 155K MAUs.
- OWLR released a revenue test with our users and have been doubling paying users every month since November.
- We have expanded our relationships with manufacturers, distributors and technology vendors to offer better and better services to our users.
Was taking off from London and spending four months in the Bay Area worth it?
To quote Fargo – You Betcha!