From team to company – founding issues

team

In my role as mentor at the MIT Venture Mentoring Service and the MIT Sandbox Fund I very often find teams that have been formed in academia but have the goal of founding a company if their business idea proves out.

There are a number of very important issues surrounding the formation and operation of these teams that I recommend founders consider carefully.

Goals of the team

While the goals of the team are often set out by an application process, as in the case of the MIT Sandbox, other teams that involve students and/or faculty may well not be. Even in the former case, goals may change. So I advise the members of the founding team to clearly set out their goals for the project and document them. An example goal might be learning the basics of doing a startup to prepare team members to do their own startups when they graduate. These goals may need to be revisited, but that’s ok. I find that when any disagreements or disputes occur it can help the team to revisit their “first principles.”

Personal goals of the team members

I have written elsewhere about the importance of alignment of the founders’ intentions. Each each team member gives careful consideration to their own personal goals for the project and then hold a team meeting in which each member expresses their personal goals. If there are major conflicts, such as one member is simply interested in learning more about the area the team will be working on, say machine learning; another wanting to turn the project into a startup company; and a third simply wanting to fulfill a course requirement, then the team is going to run into problems. At minimum awareness of everyone’s goals may help, but it may be necessary to change the makeup of the team, so that all members plan to turn the project into a company, or everyone is simply interested in learning – about startups and/or the topic of the project.

Team membership

A key issue with young teams is the makeup of the team. Often it is a mix of full time students from the same university, a team member or two from another school, and perhaps an experienced entrepreneur or a faculty member. Problems occur when some team members feel that others may not be pulling their weight and disputes often align along commonalities. “Hey we are all working on this full time, but you have a day job and we don’t think you are putting in the effort we are!”  Founders should give some thought before bringing in someone they just met at a networking event, for example versus another student enrolled in the same school and course. It is important that roles and responsibilities be clear. Issues like who is working full time on the project vs. part time or who is responsible for managing the team’s grant money  need to be clarified upfront, before becoming bones of contention.

Relationship amongst team members

Closely related to team membership is the relationship amongst the members. What are their connections? Fellow students? Attended the same school? Have the same major? The stronger the pre-existing relationships amongst team members, including friendship and having worked together previously, the greater the likelihood of success.
Y-Combinator has found that the most successful teams are lead by founders with a strong pre-existing relationship. If you have worked with or known a team member, look for commonalities, such as common interests or mutual friends. The more and stronger the pre-existing connections, the stronger team.

Duration of the project

This may seem simple, but it effects the focus and efforts of the team. Will this project end with the academic year? Will it end when key founders graduate and move on to other things? Or is the plan to transform the project into a company and the project into a business entity, an LLC or C-Corp?

Definition of the project

This is usually de rigueur for applications for academic funding or entering an incubator or accelerator. And it’s the item most likely to change as the project moves forward. But like the goals of the team, it’s useful to pin this down at the outset and revisit it when circumstances change, such as finding no interest from beta testers, or a founder leaves, or a major competitor emerges. Most startup ventures end up partially or completely changing their business model

Project deliverables

In trying to help mediate disputes amongst founding teams I’ve found that poor definition of who was responsible for doing what and by when seems to be a common problem area. It’s critical that the team agree on not just what the deliverables are needed to complete the academic project or get to early startup stage, but who on the team will deliver what and when. Steve Jobs instituted a role for all Apple teams called the DRI – the Directly Responsible Individual. The concept is simple, but requires effort to maintain. Read this article on Medium about how the DRI model worked at TripAdvisor.

“Any effective meeting at Apple will have an action list,” says a former employee. “Next to each action item will be the DRI.” A common phrase heard around Apple when someone is trying to learn the right contact on a project: “Who’s the DRI on that?”

Using the DRI system may be one of the most powerful tools you can have in your team’s toolbox. Equally important is the concept of KPIs: Key Performance Indicators. If you do nothing else after reading the article implement the DRI and KPI systems for your team.

What happens when a team member leaves?

Teams change. Students graduate, team members lose interest, others take a new job or join a new project. Dealing with termination, of contracts, team memberships, partnerships or any other relationship is amongst the most difficult issues any team faces. What I’ve found is that few team plan for these type of events. It is sort of like why I believe people didn’t wear seat belts: putting on a seat belt brought to mind you might be in accident. Who wants that awful thought every time you get in the car? Likewise who wants to think that a team member might quit? But this is where IP issues -who owns the intellectual property developed by the team – come to the fore and why ownership has to either be made crystal clear by the academic program, the accelerator or a founder’s agreement. Whether the agreement is that team members who leave give up all rights to IP created by the team or whether they have the right to make use of any IP created – software code, team name, written specs, algorithms, etc – isn’t so important as total agreement of the team at its founding.

How are disputes handled?

I’ve found this to be a weakness or more clearly a lacuna, a gap, in many entrepreneurial programs. This is understandable. Most people like to avoid unpleasantness and teams are left to their own devices, unlike inside a mature company that may have formal processes for handling disputes. Consider putting in a simple rule such as any change in the team’s direction, makeup or other major factor requires either a unanimous vote of the founders or a majority vote of the founders. A founders’ agreement may even include a clause that business disputes, like IP ownership, go to arbitration, not the courts. Like having a team member leave, planning on how to handle major disagreements may seem like focusing on the negative. But it’s an insurance policy. And like an insurance policy, you hope you never have to take it out of its file folder.

The differences between a team and a company

This is very, very important. So I’m just going to point you to a previous post on the subject and recommend you read it carefully.

The path from a team to a company

It may well be helpful to agree on what will trigger the phase change from team to company. Events such as a beta test that meets or greatly exceeds its targets, strong interest from an angel or VC investor, attracting a powerful and successful entrepreneur to the team, or a major scientific or technical breakthrough are the types of triggers you might consider. Again it’s important that the team agree on what will trigger this major change from team to company at the outset of team formation.

This stuff may seem dry, boring and unnecessary or distracting. But you’ll find that if you ignore all these foundational issues may become more than distracting, they can become distracted. A couple of maxims apply: forewarned is fore armed and an ounce of prevention is worth a pound of cure.

 

 

 

 

 

 

 

 

  1. path to a company
    1. founders’ agreement
    2. IP creation: copyrights, patents, trademarks
    3. creating a business entity: LLC, C-Corp

Insight on mentorship from Nasdaq Entrepreneurial Center

 

corzine

Nina Corzine image credit: The Nasdaq Entrepreneurial Center

The article Why You Have the Wrong Idea About Who Is a Great Mentor by Nina Zipkin on Entrepreneur.com has some refreshing insights about mentoring. Nina Zipkin makes the excellent point that “finding the right mentor isn’t as easy as sending a cold email or going to a few networking events.” She’s right – it takes real work.

Zipkin interviewed Nicola Corzine, the executive director of the Nasdaq Entrepreneurial Center about mentoring. According to Corzine: … “advice that tells you to simply get a mentor is, while well-meaning, actually somewhat unhelpful.”

She knows whereof she speaks, as prior to joining the non-profit Center, Corzine spent 11 years as an investment partner with The Band of Angels, Silicon Valley’s oldest seed funding organization. It was in this environment that she learned the pitfalls of offering that kind of guidance about mentoring.

Part of the mission of the Nasdaq Entrepreneurial Center is to provide mentors to entrepreneurs. The Center is different from many incubators and accelerators as it accepts people based on who they are, not on their business. Unlike many accelerators which have an “up or out” philosophy Nasdaq “takes a very longitudinal approach to support, mentorship and entrepreneurial development. You’re welcome to stay with us all the while that you need support and help.”

So here’s the money shot question from Nina Zipkin for Nicola Corzine: Over the last few years what have you learned about what makes mentorship effective?

Again, unlike many accelerators, who believes that startup founders need to be around other high tech startup founders, Corzine says “here [there] is so much value to be had from high-tech and non-tech founders working together around similar business challenges that they are all facing.” Incubators focusing on similar challenges rather than similar businesses is unique in my experience. I do find that startup founders from whatever market or industry do share many similar challenges, from defining their business model, to figuring out how to acquire customers, to raising capital. And I also find that these are things not taught in most business schools.

Mentorship is an educational process, as Corzine clearly sees:

There are stats that learning that can actually happen by bringing a community of individuals together that don’t necessarily all stem from a single domain or a single industry, but do have a common denominator of the business challenge as the unifier.

The final issue she tackles is mentor-founder fit, which I wrote about myself in a previous post. The major problem Corzine finds is that often founders can not really articulate what it is that they need from mentors to be successful. Another issue of equal importance is managing the expectations of both founders and mentors. Corzine concludes:

Where we’re really working on in this field is helping entrepreneurs better define their needs to mentors and better give mentors the ability to have a framework for knowing how to handle and address the entrepreneur’s expectations in that process.

While I’d really like to see those stats about learning from a diverse community that she refers to, from my experience I think that the Nasdaq Entrepreneurial Center is taking the right approach – at least for early stage ventures. I’ve found that as ventures mature their mentoring needs become more domain and market-specific and their need for mentors with experience in their market grows. That’s one of the reasons why MIT’s Venture Mentoring Service, with well over 150 mentors works so well. VMS recognizes that founders’ needs do change and is ready, willing and able to swap in new mentors from the large mentor pool as needed  to meet the needs of the entrepreneur.

Preparing for Demo Day

demoday

Virtually every incubator or accelerator program culminates in a “Demo Day”, where the ventures who have graduated from the program get a few minutes to present their ventures to an audience of potential investors. Programs like Y-Combinator have had great success getting their ventures funded from these Demo Day events.

The key to success at Demo Day is being investor-ready. In fact, organizations like MIT’s Venture Mentoring Service are very selective about which ventures get a slot. They carefully poll the venture’s mentors and others to narrow down a list of ventures they believe are ready to present to investors.

The penultimate event to Demo Day is the Pitch Scrub. The basics of a pitch scrub are simple but highly execution sensitive.

  1. Pitch examples – providing ventures with examples of winning decks can b e helpful. But a deck is NOT a presentation, it’s support for a presenter. Better yet is a video of a previous year’s set of winning (that is ventures that gained investments) presentations.
  2. Pitch elements – providing a standard outline can help ventures ensure that their presentation touches all the bases of interest to investors. But ventures should be encouraged to be creative. Keep in mind investors are going to be sitting through a lot of pitches and their eyes will glaze over if every one of them follows the same format. So providing the key elements and leaving it up to the venture as to how they are presented should result in much more creative and differentiated presentations.
  3. Presenter – while it is ideal to have the CEO/founder present, he or she may not be the best presenter on the team, perhaps because they aren’t a native English speaker. Mentors should help the team select the most effective presenter, usually based on experience in public speaking and/or pitching.
  4. Tech support – nothing can derail a presentation faster than a technical glitch. Presentations should all be done from the same computer and in a standard format – PowerPoint or pdf. Support for non-text elements has to be not just tolerated but encouraged, particularly video and animations.
  5. Timing – virtually every day demo has strict time limits on presentations, ranging from about 3 minutes to about 10 minutes. Mentors need to help their team fit the time slot, with a little slack time as a buffer. The temptation with ventures is to try to say too much. In time-constricted pitches less is more. Teams have to be ruthless about cutting the presentations down to fit the time slot.
  6. Product demos – while demoing an actual product is very effective, Demo Day producers generally either don’t allow this or discourage it for two reasons: one, it is hard to fit a demo of a product plus a presentation about the company in 3 to 5 minutes; and two, the risk of a technical flub outweigh the benefits of showing the actual product. A short video is far safer and can be almost as effective.
  7. Focus – in general investors prioritize the team above all else, followed by the market opportunity (size and growth rate) and the product’s value proposition and differentiation. Iv’e seen too many ventures rely on founder photos and brief  bios rather than show investors why each team member is a great fit for the company and how they will contribute to its future success.
  8. Pitch scrubs – presentations need to be critiqued. The team and friends and family are far too close to the venture to be good critics. Even a team’s mentor or mentor team may be biased. That’s why the best preparation for a Demo Day is to have experts who are totally unfamiliar with the venture provide the feedback. A team of 2 to 4 experts is ideal – too few and there won’t be enough feedback, too many and there may well be feedback overload.
  9. Rehearsal – ideally ventures should incorporate feedback from the pitch scrub and then perform a dress rehearsal for another team of critics.
  10. Talk to veterans – speaking with founders who have presented at precious Demo Days can be very helpful. Even better if they can be enlisted as reviewers.
  11. Attend a Demo Day – while most Demo Days are restricted to investors try to find one you can get into. Nothing like watching another founder present to get a good idea of what you are in store for.
  12. Practice, practice practice – during the period between the dress rehearsal and Demo Day the presenter needs to get their presentation down cold. In some ways a Demo Day presentation is a lot easier than pitching to investors, as investors are notorious for interrupting presentations. Most Demo Day’s only allow questions after the presentation, if at all. But if questions are allowed, the team needs to work on what questions are most likely to be asked and to have short, concise answers ready for each question.
  13. Followup – most Demo Days allow time for investors to network with presenters, so ventures should be prepared to follow up with investors, especially those who showed interest by asking a question during the Q & A period. If the CEO did not do the presentation, then he or she must be out there buttonholing investors. The goal of followup is simple: Get the meeting! No investor is going to get into an in depth discussion with you at a public event, your goal is to get a private meeting with them at their offices.

Keep in mind, that Demo Days are group presentations. Don’t plan to use the same presentation once you succeed in “getting the meeting.” For one thing you will have much more time – though you should keep the presentation short, and for another, if your prototype or product is demo-ready you should show it – perhaps even lead with it. Meetings with investors need to be conversations, not presentations. But get those meetings!

 

Mentors, Teachers, Coaches & Advisors

human resources

Steve Blank, noted educator of entrepreneurs, has a superb video series about startups which is available on YouTube. One video in particular very clearly delineates the differences amongst mentors, teachers, coaches and advisors, and explains the value of each to the startup.

Mentors, teachers and coaches advance your personal career. If you want to learn a specific subject you find a teacher or take a class.

If you want to hone specific skills or reach an exact goal, hire a coach.

The one that founders sometimes forget is the mentor. If you want to get smarter and better over your career, find someone who cares about you enough to be a mentor.

A key point Steve makes about mentors is, “Mentors are a two-way street.”  They think they can learn something from you in addition to liking you. And having been a mentor formally for over eight years and informally for many more years, I can’t emphasize this enough. I’ve learned a lot about fields I never would have entered myself, such as medical devices or bio-engineering and even more about founders and how they develop through the process of building a company. As Steve says, many founders will themselves eventually become mentors.

A favorite topic of mine is advisory boards and I often recommend that founders form and advisory board once they have solidified their business model enough to use it as filter in choosing advisors who can help their business be successful. Teachers, coaches and mentors help the founder to develop and succeed; advisory boards help the company to succeed. Boards may provide generic advice to the founders, VPs and even staff.

Steve recommends putting together an advisory board “as early as possible.” This is one point where we differ. Having formed advisory boards for each of the four venture backed companies I founded, my experience was that if you create an advisory board before you solidify your business model you can end up with advisors who don’t fit your company.

But his reasons for forming an advisory board are quite sound: get experienced advice to help you soft out whether or not your vision is a hallucination or not. Expand your circle of accumulated wisdom past your investors.  Your investors or Board are not necessarily your advisors. They may lack the domain expertise you need. And the Board is your boss, not your advisory board.

Steve doesn’t really address how you find mentors, teachers, coaches and advisors. Much like finding your first employees, this comes down to using your personal network and the networks of your founders to find previous employers, professors, retired executives, and even peers who are willing to act as mentors or advisors. These days virtually every incubator or accelerator comes complete with a mentoring team. You can find many useful courses via MOOCs – Massive Open Online Courses – from edx, Coursera, Udacity and others. Generally you will need to pay coaches. MOOCs are free, but exec ed courses from places like Harvard are decidedly not. Mentors and advisors are generally compensated by small stock grants.

You can get a detailed roadmap on how to build an advisory board from my post Strategic Advisory Boards. You may also want to read the post comparing and contrasting mentors with advisory boards.

Mentoring moves to France

 

macronMentoring continues to be a key ingredient in the development of entrepreneurial ecosystems. The latest entrant? France. The article The Next Silicon Valley? Head to France  by Tina Trinh describes how newly elected President Emmanual Macron’s plan to build a version of Silicon Valley in France. This represents a major cultural and economic change.

“The tradition has been in Europe and in France to invest in big, traditional companies and not specifically [in] tech startups. So we will dedicate a €10 billion fund to the investment in tech startups in France,” said Mounir Mahjoubi, France’s Secretary of State for Digital Affairs.

The French Tech Visa fast-tracks a process for participants to obtain a renewable, four-year residence permit. The goal is to bring startup founders, employees and investors to the country through a combination of mentorships, grants and subsidized work spaces. Note how mentorships is listed first, before even “subsidized work space.”

Of course, the first question I ask when I see mentorship included in such plans is where will the mentors come from? Macron and his economic development team have an answer for this:

In the French tech world, all eyes are on the privately financed Station F, which is set to open this summer in Paris. Billed as the world’s biggest startup campus, the 34,000-square-meter space already has major tech companies like Microsoft, Facebook and Ubisoft signed on. The companies will develop their products, as well as host and mentor startup founders in incubator programs. One thousand individual startups are expected to set up shop at Station F.

While mentorship from employees of companies like Microsoft and Facebook can no doubt be helpful, the problem with this model is that the best mentors for founders are those who have been founders themselves. If you haven’t started a business, built a team, raised capital, and had to meet payroll I doubt you can help founders with the many different challenges they face. In fact, employees of large tech companies may not even be helpful in mentoring entrepreneurs about product development, as the process in a large, established and well-financed company is so different from a cash-strapped startup.

The reason Silicon Valley has been so successful is due to many factors, not the least of which has been Stanford University, which supplies a steady stream of well-educated engineers and scientists, and has supported entrepreneurship for the past 50 years or more. Mentors tend to be founders who have cashed out successfully and have the time to be angel investors and/or mentors and the desire to “give back” – the key qualification for a mentor.

So trying to create another Silicon Valley by simply funding incubators and recruiting large companies to mentor founders is necessary, but not sufficient. The two main drivers of entrepreneurship are major universities and investors. It’s not clear that France is trying to locate its incubators and “hubs” where these two vital ingredients are present. Another smaller, but increasingly important ingredient is a great transportation system, as millennials are increasingly less interested in owning and driving cars and more interested in using public transportation to get to their jobs. Google, Apple and Facebook now have their own fleets of buses to transport their employees from San Francisco to Silicon Valley.

So if France is truly serious about generating a version of Silicon Valley they need to better understand what has made Silicon Valley so successful and why it continues to succeed through a virtuous circle of startups going public or being acquired and adding to the pool of angel investors and mentors who in turn can help yet more startups succeed.

Bon chance, Macron!

Y-Combinator using out-moded teaching method

lecture method.jpg

Lately I’ve been touting Y-Combinator and in particular their Startup School. And while I still have total respect and in fact amazement at what Paul Graham and his successors have accomplished, it took an NPR article and watching their latest Startup School video “How to Raise Money” to wake me up to the fact that they have fallen into the pedagogical model du jour – MOOCs – Massive Open Online Courses – as the way to teach entrepreneurship. To start off the video is very light on introductions of the two lecturers – Aaron Harris Partner at  Y-Combinator and Jess Lee Partner at Sequoia Capital.

Both lecturers are coming from the funding side: Y-Combinator and Sequoia, one of the most imminent VC firms in the country.  Both of them founded but a single company each. Jess Lee sold her company to Yahoo. Y-Combinator’s bio page doesn’t say what happened to Aaron Harris’s Tutorspree. Silence is not golden when it comes to what happened to your startup.

So neither are serial entrepreneurs – as best I can tell they each only raised capital for one company. And worse than that Jess Lee is a total neophyte – she’s been a VC for all of six months. I still recall Bill Kaiser of Greylock telling me that it takes seven years to become a real VC – you need to take companies public, experience failures and learn from your more experienced partners and by doing. Bill became a very successful VC and I wonder if he still thinks it takes severn years or if things have changed radically. Whatever the case, it sure doesn’t take six months.

How and why these two were chosen to lecture on such a critical subject I have no idea, but there a dozens and dozens of serial entrepreneurs, including myself, with far deeper and more diverse experience raising money than both of these two put together.

I won’t spend the time to critique their lecture, you can watch it for yourself if you want to waste time “learning” that the time to raise money “is when you feel you are ready!” Well maybe on the West Coast! But here on the East Coast investors expect things like a world class founding team, lead by a great CEO; a real product or service; an engaged and rapidly growing customer base; and a solid business model.

In fact, Aaron Harris at one point indicates you can raise money without a pitch deck! Well maybe if you come out of Y-Combinator – which is the Stanford of incubators, and which insures you graduate with a killer demo, if not a real product.

So after watching Startup School great videos from the likes of Mark Zuckerberg, I found this one beyond disappointing. The way I’ve judged the many classroom lectures I’ve delivered is by the number and quality of questions after my presentation. Aaron Harris and Jess Lee got two! Yep, two questions from a classroom full of Stanford students studying entrepreneurship. Enough said.

But what I’m really upset about is not that Startup School laid a real egg with this video which will mislead thousands of entrepreneurs who aren’t in Silicon Valley and aren’t
Y-Combinator grads, but that Startup School has chosen the outmoded lecture method to try to teach thousands of wannabees how to an entrepreneur.

The nprED article Hey Higher Ed, Why Not Focus On Teaching? by ERIC WESTERVELT lays waste to the lecture method. I wish the powers that be at Startup School would read it. The author interviews Stanford physics and education professor Carl Wieman who won a Nobel Prize for his innovative, break-through work in quantum mechanics. His new book is Improving How Universities Teach Science: Lessons from the Science Education Initiative, While professor Wieman’s focus is on science education, what he has to say about the ineffectiveness of the lecture method applies not to all of educatoin but also to Startup School’s video lectures as well.

You argue that the well-established, traditional, large lecture format still used widely today across higher education is ineffectual. Why?

People doing research in this area, like myself, we measure (learning) and we just see that the learning that takes place is really minimal, and then if you dig into the way the brain processes and learns, it’s pretty clear why it’s so minimal. To learn something, you really have to be processing those ideas. I think of it as sort of exercising the neurons in the brain. Sitting there listening to someone — where it’s just flowing past you — you’re not doing that mental processing. You’re not exercising the brain and you walk out without really learning anything.

In one case study we did, we had students go to these lectures, and then we gave them a pop quiz right at the start of the next class. We saw their score on this quiz was about 10 percent. In other cases, where people have looked at long-term retention, where you measure something a few weeks later, they see a very rapid drop off. Even if students can score high on a final exam, three weeks later, it will be down dramatically. It’s sort of a very brief learning that goes away quickly.You just have to measure the results and you see that tradition doesn’t always mean that something is right.

While Professor Wieman doesn’t mention mentoring, he does liken effective teaching to coaching:

The other thing these teachers are doing — that a coach also does — is they break down performance in a field into the right kind of practice exercises. Dribbling with your left hand, and focus on mastering that, and then putting it together in the same way. Very much like a coach.

How do you coach entrepreneurs by having them sit through a video lecture? I realize that there is a lot more to Startup School than their video lectures and not being a participant I’ve not privy to what other methods they are using to try to teach thousands of people how to start a company. But Y-Combinator does say that they have created their own communications platform for their MOOC students  – which is great. I would like to see it! I just wish they would take some of the millions and millions of dollars they have earned from their investments over the years and invest in developing an active learning platform to replace their outmoded lectures with a 21st century pedagogical approach that could revolutionize online education the way Y-Combinator has revolutionized early stage investing.

Perhaps somewhere in the thousands of applications Y-Combinator receives every year there’s one or two aimed at replacing the lecture method with an interactive approach. How about funding them and seeing if they can’t feed their dogs much better dog food than the same old same old that teachers have been feeding their students for centuries?

 

 

 

Mentoring is a key to scaling Y-Combinator

YC

The words “mentor”, “mentoring” or “mentorship” occur six times in the article
Y Combinator will accept 10,000 startups to prove there’s nothing magical about Silicon Valley
by Michael J. Coren on Quartz.com. That’s no accident, as it’s clear that mentoring is key to scaling Y-Combinator up by two orders of magnitude. Y-Combinator was started in Boston by Paul Graham in 2005 as a strictly face-to-face, relationship-based incubator. (For more the history of Y-Combinator see my post about the book The LaunchPad by Randall Stross.) The YC model remained the same as it moved to Silicon Valley and has stayed the same until this year. Meeting with Paul Graham, weekly dinners amongst the founders, and Y-Combinator staff, mentoring sessions – all was conduced F2F. In fact, if you were accepted into the increasingly selective Y-Combinator program you had to move to Silicon Valley, period.

For now, YC can only turn out about 300 companies per year through its bi-annual program in Mountain View, California. In technology terms, YC itself has not really scaled. Most of what it does remains analog and manual: mentoring in classrooms, weekly dinners, and a program requiring everyone to live in California for months at a time.

Is it possible to scale a program that was 100% based on real time, in-person interactions and relationships?

Well Y-Combinator is giving it a try through its Startup School, a MOOC (Massively Open Online Course) billed as a free online version of YC, promised to “teach people about how to start a startup, and equip them with the needed resources.”

The first cohort of 3,000 companies from 141 countries will be given a chance to “replicate much of the YC experience” through a virtual program with mentors, collaboration with peers, and video lectures…”

The companies use custom-built software to collaborate, pour over their weekly metrics, and attend weekly mentoring sessions with YC alumni (200 volunteered to meet with participants). This volunteer rate is a real testament to the lasting value of the network of relationships Y-Combinator has built with its alumni. Mentors hold group sessions with founders on Google Hangouts to hash out problems.

Sandiep Medisetti, founder of alumni relations startup Almabase. says his mentor, a YC graduate who volunteers several hours per week, has been instrumental in solving customer-relations challenges for Almabase’s 100 or so clients.

Accelerators supply young companies with education, mentorship, and financing for a few months to speed up their growth. The ratio of mentors to startups at the moment is 30:1, (although YC plans to increase this). It’s not clear how they arrived at this ratio, other than it’s the standard instructor to student ratio found in classrooms in public education, nor why they want to increase the ratio.

Y-Combinator claims only 20% of participants have dropped out after eight weeks (companies must complete 90% of weekly updates and office hours to stay in the program) compared to a typical attrition rate in MOOCS of 87%. However, it will take at least a few “semesters” to ascertain the graduation rate. And beyond how many founders actually complete the Startup School MOOC, how many of those ventures will go on to launch and succeed? That will take years to determine.

But Sam Altman, President of YC, stated in an interview in early May that: ““The original, long-standing goal of YC is that startups are good for the world and individual, and how can we get more of them?”

YC is at its heart an educational institution, whether they subscribe to that description or not. But unlike educational institutions, YC is driven by data and metrics, so I believe we can look forward to transparent reporting on how The Startup School succeeds in its ambitious goals. As someone who has viewed several of it’s video lectures and been a bystander as it gets off the ground, I’m impressed. However, YC is still depending on the lecture method – a staple of higher education, but one that’s effectiveness has been in question for years. The hoary quote I hear and I forget. I see and I remember. I do and I understand still remains true. I believe YC is going to have to move beyond the canned video lecture method to a more interactive way of teaching if it is going to meet its ambitious goals of scaling the YC model to tens of thousands of students.

 

 

 

 

Incubators offers child care and mentoring

 

childcare

Lis Tyroler, center, helped start Nido, a co-working space that offers on-site day care, in Durham, N.C.CreditJeremy M. Lange for The New York Times

The article Starting Up a Business, With Little Ones Close by AILI McCONNON in The New York Times is about incubators, this one that enables working moms, and dads, to take advantage of child care services as well as other typical incubator services, including mentoring.

Funded in a variety of ways that include bootstrapping entrepreneurs and corporate behemoths like Google, these spaces all perform vital functions. Some host meetings with a bank or investors, others help entrepreneurs learn all facets of starting a business, while some simply provide a common space to meet and talk with peers.

One such space in Durham, N.C., called Nido was exactly what Ali Rudel said she needed to fulfill her dream of starting her own bakery while juggling the responsibilities of caring for her 3-year-old and 6-month-old daughters. They attended a Montessori preschool on site while she worked next door on developing her idea over 14 months.

20ebiz3-master675-v2Ms. Tyroler, center, with her children and Tiffany Frye, another co-founder of Nido.Credit Jeremy M. Lange for The New York Times

Google has been a pioneer in providing day care to its employees but with its Campuses it also provides combination incubator/child care to founders around the world.

Ms. Sielicka-Kalczynska, founder of Whisbear and originally from Poland, connected with various mentors at Google and was invited to a workshop in Palo Alto, Calif.

Google started the first Campus for Moms in Tel Aviv in 2013 and now offers this program on six campuses outside the United States. More than 650 parents have gone through the Google program, roughly 10 percent of them fathers.

Google does not charge for the program or take any equity in the new companies.

“We began as a start-up in a garage, so backing start-up communities is part of Google’s DNA,” said Mary Grove, the director of Google for Entrepreneurs, the Google division that runs Campus for Moms. The company does hope to draw on participants’ loyalty by introducing Google’s tools to start-ups.

Ms. Sielicka-Kalczynska now has a group of Google mentors in several countries. Whisbear just won the top award at one of the biggest baby trade shows in Europe.

It’s great to see new incubators spring up, like the one in Austin for foreign founders and Nido, for moms.

Accelerator provides mentors for foreign-born founders

According to the article in Forbes by Murray Newlands The Chief Architect Of Austin’s Tech Revolution Is Betting On This New Population, International Accelerator, is the only accelerator in the United States that is focused exclusively on foreign-born entrepreneurs. The International Accelerator is located in Austin, a hub of entrepreneurial activity.

In addition to helping the company incorporate in Delaware, introducing them to service providers and taking care of their accounting and even finding a home, according to CEO Angelos Angelou:

We provide them with mentors, interns, and identify one to two U.S. based board members to provide guidance and raise the profile and credibility for the company. Our goal is to make the company look, account and govern like a U.S. corporation from day one.

The accelerator currently has six portfolio companies for which they have raised nearly $11 million. They organized a business plan competition during SXSW which 100 startups participated. Four or five companies have been selected to join the accelerator.

Angelos provides the reason so many foreign entrepreneurs are coming to the U.S.:

There is significant  innovation from foreign entrepreneurs, but they lack the experience of growing and managing the scaling of their business. Where these startups are coming from, they don’t have a large pool of experienced management talent. This is what they are coming to the United States for, and this is where the International Accelerator steps in and plays a very active and pivotal role.

He might have added that where these startups are coming from they also don’t have a large pool of mentors to guide and advise as they will find in Austin.

An accelerator for foreign-born entrepreneurs

intel accelerator

Accelerators and incubators go hand-in-hand with startups and mentoring. The Forbes article The Chief Architect Of Austin’s Tech Revolution Is Betting On This New Population by Murray Newlands describes a new type of accelerator, one focused solely on foreign-born entrepreneurs.

Angelos Angelo is Founder and CEO of International Accelerator, the only accelerator in the United States that is focused exclusively on foreign-born entrepreneurs.

Angelou is an international expert on technology-based economic development, public policy, investment attraction, marketing, and entrepreneurship, and his efforts during his 12 years as Vice President of Economic Development and Chief Economist for the Greater Austin Chamber of Commerce to recruit tech companies are widely regarded as one of the biggest reasons Austin is a thriving tech hub.

According to research by Angelou 30% of all entrepreneurs in the U.S. are foreign-born and nearly 80% of the intellectual property in the U.S. in the high tech sector comes from foreign-born entrepreneurs.

The International Accelerator has an incredible team of mentors – I count 34 on the site.

Here’s what they say about mentoring:

IA matches each portfolio company with a mentor whose experience, knowledge, and network of relationships that complements the needs of the portfolio company. The mentor helps the portfolio company develop plans, goals, and objectives over the portfolio’s yearlong participation in the IA program.

IA mentors have been successful in their fields and they are eager to roll up their sleeves and use their experience to help their companies reach their fullest potential.

The International Accelerator is just one indication of why Austin has become a hub for technology development.