Thursday, 13 March 2014

TOO MANY ACCELERATORS – BUT IS THERE ACCELERATION?

First appeared on Techcabal
I hardly have time for my usual bullshit (even this, but I thought it was important). I just have a few points of advice for fellow founders looking at accelerators

Don’t be a guinea pig.

If you can, WAIT and talk to the first group of founders that graduate from these accelerators. They will tell you the good, the bad and the ugly. These accelerators will invariably make mistakes with the first set of companies and the type of mistakes they make will tell you whether you want to risk your baby with them or not.

It isn’t wise to work with an accelerator that wishes to own 20% of your company

Leadpath, I’m looking at you. An accelerator is supposed to get you started. Your series A which should come immediately after the accelerator will take another 30%. So just when you are starting to hit your stride, 50% of your company is gone. Harsh. How will you stay motivated? (You won’t). Personally I think 10% is a lot set but given this is Africa, I think it makes sense to stick with accelerators that will take below 15%.

It is all about the demo day

An accelerator is supposed to be a high leverage moment in the life of your startup. You literally have 3 months to create the most value you can because you are in the spotlight and everyone is watching. Every move you make matters. But no matter how hard you work in an accelerator, it will not matter if the right people are not there at demo day. That is just the fact. “If a tree falls in a forest and no one is around to hear it, does it make a sound?”. Your accelerator needs to be able to get top investors (not prospectors) to come to your demo day otherwise your 3 months of handwork will just be a fucking waste.
Accelerator owners might not want to be straight with you about their investment connections but there are a few ways to find out if they have serious connections to growth money or not:
Ask who their LPs are
If their LPs are funds, they probably have good connections with them. I think Savannah can be trusted in this regard.
Find out who is in their mentor network for startups
If an accelerator owner thinks he can teach you everything about your business without reaching out to subject matter experts, he is a joker. Accelerator owners with good mentor networks will be able to connect you to money.
Are they operators?
Accelerator owners who are operators that have raised and successfully exited from a previous company are much better than a bunch of ex-bankers thinking an accelerator can make them a quick buck. The previous have the backing of investors they have made money for before and who trust their judgement. The latter are useless to you until you IPO (which is a long way away).
There are a lot more key things to note for those looking to join accelerators but this is all I have for now.
Key thing to remember is that whether you accelerate or not in an accelerator is largely in your hand. Remember that an accelerator is the highest leverage period of your startup’s history – it will make or mar your startup. You can take advantage of it and build a quantum of value in a short period or you can waste your time and go slow for the rest of your life.
Your decision.

What to look out for before applying to join an Incubator in Kenya.

Hubs, Open spaces, Incubators and accelerators are now a common thing in Kenya. More are sprouting up in universities and a few more from India will set up base locally by end of 2014.They have a role to play in nurturing early stage and accelerating growth for startups which is a good thing for innovation.
Entrepreneurs at Growth Hub
Entrepreneurs at Growth Hub
Hubs, Open spaces, Incubators and accelerators are now a common thing in Kenya. More are sprouting up in universities and a few more from India will set up base locally by end of 2014. They have a role to play in nurturing early stage and accelerating growth for startups which is a good thing for innovation.
With all the options around, every so often you’ll see a ‘call for applications’ inviting entrepreneurs with innovative and startups to join. Just because there’s free space, shared resources, the bonding, sharing expertise doesn’t make you successful. The ping pong table, free internet, comfy seats and all the amazing people that pass by are all good things. Look out for opportunities that advance your prototype. There are certain places where the blind lead the dumb so hanging out there for years doesn’t get you anywhere.
Well I’d like to share a few points to help those starting out on what to look out for while choosing which one to apply to. These are solely my opinions and you should absolutely make that decision on where to apply and go hang out.
1.        Their Target:
In a call for applications the hub or institution defines the program, criteria of selection and eligibility. If you’re an early stage startup applying to join an incubator look out for their key focus     If they have one. Do they need agribusiness ideas, edtech, renewable energy, Consumer mobile & ICT or just anything idea that sounds innovative and cool. I’d recommend you to apply to those focused on a particular sector around what you’re doing. In a cohort of 12 to 18 companies in different sectors you’ll probably not gain much from the program if you’re all mixed up. The facilitators may not have expertise in all these sectors, the hub may not attract enough mentors with great sector experience for all these startups. However the reason most hubs prefer a mixed cohort is the difficulty of getting 14 or more fresh startups with good ideas in one industry to join a class. Another thing is some of them will tend to be working on almost similar stuff so you don’t need to be in the same environment learning with your competitor.
2.      Look out for the Facilitator bios:
The facilitators are the people who will take you through the program, the sessions and workshops. Look out for their bios, dig them up on LinkedIn to see what they’ve done and accomplished. Also look out for their experience around the industry you’re start up is in. This will help you decide whether you need to commit the next 14 weeks into a program.
3.      Core Strengths| Focus
Are you building a consumer mobile application? Are you into renewable energy? Health? Agribusiness?
Whatever it is you are working on look out for an hub that sort of focuses on that or has a good history and some success in that field. Go into the About us section of their website, ask around what they are really good at and use that to decide if they’re a good fit for your startup or idea.
4.      Their Connections| History| Network
Some of the local hubs locally are run by foreigners or guys with strong connections to some regions, countries or industries. These connections and history will tell you the kind of mentors they attract, investors who check out their graduates and more important their ability to introduce you to these people and partners. Check out their past programs, see the Impact Fund or development partners who have supported them. That will give you a better understanding of who they are well connected to and where.
5.      Look out for their successes:
Go to their portfolio, check out the logos there. Go to their blog and see the companies they’ve written about. Check other blogs and Google those companies and see if they acknowledge or mention that particular hub/program for their success. Ask around for the successes, and companies they’ve incubated or accelerated in the past and where they are now. That should tell you about the value of their programs. Certain startups will get incubation in one  hub, acceleration in another, get some funding from another contest or on completion of another program elsewhere so all these institutions will overlap somewhere on the big successes. However look out for consistency.
6.      Talk to the Graduates:
Google the startups in their past program/s, talk to the graduates about their experience in the program, the value and gains realized. Talk to both investees [companies that received some funding after graduation] and those that didn’t. This should tell you something about what they look for and the kind of training and mentorship received.
7.       The Mentors| Speakers and Investors:
Say your application was successful and you’ve been invited for an interview. After that session be free to ask them of who the mentors in the program will be. Or some of the guys who have mentored startups in past programs. That done, you may ask for angels who have attended their demo days in the past. This is important information, because I have heard of stories of people being mentored by competitors and pitched to entrepreneurs masquerading as investors. Just ask. Most of these places promise access to mentors but really do not deliver that, or manage a few to be shared among the whole cohort.
8.      The Source of Funding:
These programs are all funded by institutions or backed somehow by private companies. Look out for these partners and understand their history, what they do and the bottom line. Why did they support this particular program? Are they an impact fund? Are they a consumer electronics company? A mobile operator? Who are they and what do you think their expectations are from the program. Why is this information important? At the end of the day the hub has certain deliverables and promises to meet for the sponsor of the program. In certain cases, the people with the money dictate what their money should do or be put in. So just ensure your startup is helping the sponsor or partner deliver more value to their customers, raise more funding from your success or earn bragging rights. There’s nothing like FREE, understanding WHAT’S IN IT FOR THEM will help you pitch, and position your company for funding or more support.
9.      The Extra Benefits:
Are they giving you free space during and after the incubation for your team of 3? Is there some money for top 5 startups to develop a better prototype or carry out a pilot? Access to meeting rooms? Eeer refreshments and snacks? And anything else they’re offering on top of the workshops.
10.   The Cohort
Assuming you’ve been accepted into a program. Before signing that offer letter ask for other companies selected and what they are doing. Or better still attend the first session and find out. Entrepreneurs really help each other out and fix issues . It’s also a good place to network and make some new friends, partner with or even date L
Just ensure you’re in the right company. It’s really nothing much, but if you’re committing 14 weeks into something at least be around people who challenge you, are smarter and interesting too. Look out for problems they’re fixing, the products they are building, who they are, what they’ve done in the past and studied. This really helps you identify who to talk to during the snack breaks and seek help from.

How we tell our stories in Africa

                     
We have big problems and massive challenges in Africa but we need to re-package that 'African story' to read huge opportunities.

We cannot portray small holder farmers as poor people and expect more people to take up agriculture. Young people won't #Doagric with that 'poor for the unemployed in the village' association.

We have sanitation issues and waste management problems but we still talk of them 'garbage challenges' and dirt. Let's tell the stories of those recycling and showcase their products. Maybe even have policy in place to give incentives to those doing it and adopt + promote their products as customers.

We cannot have more B corporations if the consumer is not conscious enough to ask where the product/s is manufactured and how the raw materials are sourced. Because we glorify the good numbers + profits and huge turnovers not stories on values, ethics and quality work/products.

We need a more technical workforce yet we think of polytechnics as places for failures and blue collar jobs as juakali.

We think of the upcountry as 'mashinani & ocha' and the city + towns as 'places of great opportunity' then push guys to go back explore opportunities in the village.

The society views entrepreneurship as an “exit plan” or a "last resort" when there are no jobs, Instead, of preparing + encouraging + supporting+ mentoring+ investing in young people from an early age to think of entrepreneurship as a viable career option then tell & re-tell their stories.

We want to tell the world on Twitter whenever shit happens in Kenya but we don't want to #tag and trend the good stuff happening locally.

And the result is a mzungu lands in JKIA straight to a conference on Africa, tells the 'African story' better than us and raises more money to go fix our small holder agric problems deep in Bungoma.

We need and must change how we package, tell and share these stories. 

Tuesday, 11 March 2014

Got an Idea? Then what?

My neighbour has an idea, my friend has an idea, his colleagues have an idea too---everyone has idea---we talk about them. But an idea is not a business. And an idea doesn't make anyone an entrepreneur. So let's work on these ideas.