The mistakes I have seen with our early-stage companies are optimizing the wrong things.  So too often people get too hung up on specific terms in a term sheet.  Determine what is most important and really play the long game.  There might be a difference in evaluation when you are taking an early investment but there might be other details or parts of a deal that are much more important than the initial evaluation if you are a founder or if you are an investor.  People get caught up in the wrong metrics or the wrong things that don’t matter as much in the long term.

What Accelerators can do for Startups

On the accelerator side when it comes to finding investments, we do a global survey of all of our members, we have 85 accelerator members in our network and that represents about 1200 new startup deals every year.  Last year overwhelmingly investments came through introductions, mainly through the community.  Introductions of who is the investor, who is the accelerator managing director, who do they trust?  They are going to trust the people around them or other portfolio companies that they respect in other founders or other entrepreneurs that are at a certain level, they are going to respect their opinion over any cold emails.  If you are a founder you have to optimize your time because that is one of the most precious resources you have because you obviously don’t have money if you are looking for it.  Finding the right partner that can help you raise your next round should be the founder’s focus.

My Final Advice

Never stop learning.  Learning means both learning about your trade and what you are doing with your business and also learning by meeting people.   If you are not at the place you want to be now, go find five people who are at the place where you see yourself or you want to be and to learn.  What did they do to get there?  Not that you are going to go on that path but there are plenty of things to keep learning in life and learn from other people.  A lot of people have been in the same place you have in the past, learn how did they get to where they are at if that is where you want to be.

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We at Global Accelerator Network first look at the team.  Is the team somebody you think you can work with.  So as an entrepreneur also you want to flip that on the investor to see if they are the type of investors you want to be working with.  The last thing we ask before we make an investment is can our team have a clear and likely benefit on that startup, if yes then it makes sense but if not then it is an opportunity to pass or to hand it off to someone else in our network that could have a clear and likely benefit for that team.

Different forms of funding

I wouldn’t say startups are always looking for funding.  A lot of them are but that funding might come in different ways.  It might come through revenue, investment, or exit opportunities.  Deciding when to jump in depends on where you can have the most benefit.  What is your thesis on the investment, what are you looking for and can you have a clear and likely benefit from that company?

Every source of funding is different. From the accelerator side and the incubator side, it is really about the stage.  Where are you at as founder?  What type of help do they do for their business right now?  That might be a community, a group of great mentors, it might be access to partnerships.  They might not be ready to go raise institutional funding.  Not every company that gets investments will go to the next stage.  So not every company is going to get into an accelerator program and not every company that goes to an accelerator program is going to be successful.  So I think it is really about the stage.  If you look at any life cycle of a venture or any startup, you go through life cycles and where you are at, at a certain time and how can the ecosystem help you grow your business.  Also from the investor side or the help side how can you help that startup at that time?  Everybody is a member of the ecosystem and a member of the tribe, it is just about where is the help needed for that founder right now and can you have a likely benefit on the team.

Outlook for 2018

Going into 2018 now, the ecosystem around the world has grown to a certain point where you as a founder, any company or an investor, you can create and grow your business wherever you are.  If you are based in Seoul, there is no reason for you not to grow and create your business here.  There are increasing resources, there is a huge community here, there are even investors who are looking for deal flow actually in your neck of the woods.  No longer do you have to go travel to San Fransico just to grow and create a tech startup.  You may have to go through there for one reason or another, but I think the ecosystem as a whole globally has really matured that if you are in Southeast Asia, there are unicorns and great solid businesses there that are being grown which is really showing that you can create your business wherever you are,  just finding the right resources and the right partners in your ecosystem is what I think is really important.

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At MOX and China Accelerator, we run corporate accelerator programs.  Right now we have relationships with around 85 corporates.  You need to be very careful when deciding to partner with a corporate.  Because a corporate can sometimes limit your flexibility and your ability to change strategy and enter into different markets.  What we do at MOX is that we select multiple corporates.  So we hear what specific problems they are facing.  Then we match them with companies within our portfolio that can help solve that problem.

Getting Funding

A research on CNBC shows that around 60% of the companies that exit from an accelerator program gets funded.  The reason for this is that accelerator programs have a network of investors that surround them.  They have a network of mentors and media connections that can help get the company more visibility which can be a great help in getting the company funding.  The network of investors around SOSV alone is over 3,000.  They also have the biggest mentor community in all of Asia with over 280 mentors.   We leverage the investor community and the mentor community in order to create a perfect product market feed for the startups.  This is very helpful when the startups go for their fundraising.

Vertical Accelerator Programs

Thousands of accelerators are being born all over the world.  What I am starting to see is that the trend for the future of accelerators are that most will become very specific.  So they will provide to the startups a very specific help and a very specific advice in order for them to grow.  An advice I give to companies is to do your homework and understand through networking tools like LinkedIn what the accelerator community is around the founders of the accelerator.  Understand what is the background of the mentors that you have, and try to get as much value as possible from an accelerator program.  When I think about an accelerator program I think of a very very expensive MBA.  Startups give up 5-6% of their company to join the program.  So this time and this money need to be spent very carefully.

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At Startupbootcamp, 71% of the startups that exit the accelerator program receive funding.  This number is constantly updated on our website.  Accelerator programs, in general, provide a wide range of partners, mentors, investors, as well as talents that could help in business development for the startups.  But the key is whether the accelerator program fits you as a startup.  As a startup, you really need to do your homework on the accelerator program itself.  What is the accelerator program they are looking for?  What they are really good at?  Finally is the program the right program for them?  For example, when we recruit startups from all over the world in our Digital Health Program in China.  We got applicants that were doing e-commerce and fintech.  Therefore this shows that as a startup you really need to understand what kind of accelerator program you are applying for.

Take advantage of the accelerator program

Another key point is that you really need to spend time in a program once you are selected.  Because for our program, for example, we organize a very intense program for months.  Most of our curriculums, trips, mentor sessions, one on one with investors, master classes, workshops, startups can benefit a lot of that and will add to their success after they leave the program.

Vertical Accelerator Programs

Future accelerators will be more and more specific.  Because this will allow accelerators to foster the ecosystem in the specific area.  That is very important to help the startups to scale their business.  On the other hand, also help the accelerator itself to really get access to the resources in this industry.  The stakeholders include the decision makers from government offices, institute researchers, university professors, corporates in the industry, investors, lawyers, and financial analysts.  All these stakeholders are good at this specific industry or area the accelerator is working on.  The community or ecosystem like this is a key factor for the success of all the parties.

Corporate Accelerator Programs

Also, I see more corporate accelerators emerging.  Specifically, in China, there are over 4,000 co-working spaces, incubators, and accelerators.  But most of them are supported by the government and most are run under the philosophy of property or space operation model.  More and more corporates, as well as the multi-national companies in China, have also started to build their own innovation center, incubator, or accelerator.  They are opening up their resources to the startups as well.  Some names that come to mind are Tencent and Alibaba who have run a lot of innovation centers across the country.  There will be a lot of opportunities for international startups to come to China to work with the corporates over there so make sure as a startup you enter into an accelerator that fits your company.

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In SOSV as well as MOX, we try to go very very deep into the vertical.  So we have accelerators that focus strictly on biotechnology.  We have accelerators that focus on food technologies.  At MOX, we specifically target startups in mobile applications.  Therefore at MOX Accelerators what we do is gather a community of mentors that are specifically for mobile and specifically for emerging markets.  So we try to provide as much help as possible in order for the company to enter into markets they are not familiar with.  For example, emerging markets like India, Indonesia, Philippines, are very difficult to tap into.  Which is why most of the companies are coming from U.S. or Europe.  So they know very little about these countries.

What MOX tries to do is provide the help necessary to enter and be successful in those countries.  One of the main things we are trying to solve with MOX is that the cost of user acquisition is actually higher than the lifetime value.  The money that apps can generate into this market.  Which is why we try to localize the product and through partnerships we have in those markets, we try to reduce to zero the cost of user acquisition.  This is why we are very very specific.

MOX is a strange beast

What we try to solve is a problem that is across multiple stages for companies.  So we have publically listed companies that were trying to solve this problem.  The problem of having to pay a lot of money for acquiring users into those markets.  Therefore we are trying to provide free user acquisition for those companies.  These solutions are applicable for companies in multiple stages.  How do we do this?  We divided our program into three phases.

The first phase is that we integrate different tools in order for the companies to have a metrics and analytics to understand what the market is about.

Second, we test the market with real users.  So we can understand what is the reaction to that particular product.

The third phase is having relationships and partnerships phone manufacturers and telcos.

We try to pre-install the app, sideload the apps or push the app into different markets.  This helps even publically listed companies to acquire users and acquire value.

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We at Startupbootcamp China run an industry focused program in each of the cities.  For example, in Chengdu China, we run a digital health program, so when we are looking at the startups that are applying for our program around the world we are looking at different factors that really matter to us.

First, we look at the core members of the team, their background, as well as their work and experience in the industry, matters a lot.

Second, since we are based in China, our value proposition is to help the international startups who are interested in coming into the Chinese market to scale your business then you need to show me that your product or business solutions are good for the Chinese market and you are really interested in the Chinese market.

Third, is that we can see the core tech in your product that also feeds our vertical in a program we are running.

Our History

During the first program we ran in China, we had our 13 startups exposed to over 200 angels or VCs in China in different cities.  This was for during the program and after the program.  VCs have the capital and we as an accelerator provide services that help the startups, especially international startups, to start their business and scale up their business in China.  So capital as service and service as capital, we work very closely on that.  However of course not EVERY VC suites the program or suits the startup we are working with.  It is a lot of work to select who would be the best VC to work with a specific startup.

Startupbootcamp is a corporate innovation-driven program.

Globally we are working with corporates like Cisco, Intell, Amazon, that provides free or discounted service packages to the startups in our program.  In each of the vertical program in different cities, we worked with corporates in the industry very closely from the very beginning of the program.  So the corporates came to join us either as a sponsor of the program or an LP of a program.  So we do identify the needs with corporates.  As well as source the startups from around the world.  Then select the best fit for them.  The program will be from 3-4 months.  In between the 3-4  months, the representatives from the corporates work very closely with our startups.  It is no secret that the collaboration between startups and corporations are key to the success of both parties.

Startups vs. Corporations

These are two different worlds the startups and the corporations.  For example, the corporates are very good at the resources, users, distribution channels, and R&D facilities.  However, the mind and the skill set, as well as the passion, are not in a corporate’s DNA.  They have a hard time searching for new solutions or new business models.  Startups, on the other hand, have a very rich mindset, skill, and passion for creating new business models.  So from the very beginning, Startupbootcamp programs worked with corporates very closely for that.  As a matter of fact, beginning of this year we published an article called “Collaborate to Innovate”.  It is an article based on a survey we ran on over 300 startups and corporates that we’ve worked within the past few years.  What the article showed were the tips and mistakes made from startups and corporates experiences working together.

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