Posted by: viewfromtheriva | April 22, 2013

Life in a Start-Up Accelerator


I’ve just come back from two weeks in Sofia, Bulgaria as a member of the zzzzapp team (www.zzzzapp.com), one of the start-ups funded by the Eleven Accelerator Venture Fund (www.eleven.bg).

The "inspiration" wall at the eleven offices where all the new stat ups will work for the next three months

The “inspiration” wall at the eleven offices where all the new stat ups will work for the next three months

Although I have started several businesses of my own in the past,  this is the first time I have even been part of team whose focus is IT and whose product was literally created by and for the internet age.   For those of you who have not been introduced to the world of start ups, I am sure you remember the dot com days when it seemed that anyone with an idea got a zillion dollars.

It was the glory days of Silicon Valley when the work geek was invented to describe a particular kind of person whose entire life seemed to revolve around writing computer code and dreaming the impossible.  Today, these names are legendary:  Steve Jobs and his sidekick, the Woz; Bill Gates who peddled Red Dog stock (limited very cheap stock prior to actually going public) to wealthy doctors on Mercer Island near Seattle to raise money; Jeff Bezos who invented Amazon; some Russian geeks calling themselves Google and many, many others.

Tino, the creator of zzzzapp, on the left, Andrey, the technical guy who brought it ti life, and me, looking like their dad, who is now responsible for getting the world to use it...and oh yes, pay!

Tino, the creator of zzzzapp, on the left, Andrey, whose software wizardry brought it to life, and me, looking like their dad, who is now responsible for getting the world to use it…and oh yes, pay!

Most of these early dot com internet companies went bust, but some have become household names, reinforcing America as not just the land of opportunity, but as still the most innovative place on the planet.

The financial meltdown that engulfed all of us also spooked investors.  So it has taken a long time to coax them back to accepting risk–much less to fund an idea!  The leading edge of innovative investment is nurturing young entrepreneurs a different way—not just throwing money and hoping for the next big thing, but “incubating” the best and brightest and then “accelerating” them in a supportive work environment where they can be mentored by seasoned professionals.

What makes incubators and accelerators so attractive to  “angel” investors (private high net worth individuals who provide “seed” capital) as well as small and medium size venture funds, is that even small amounts of  money can make a huge difference.

Now there are accelerators and incubators all over the world providing $5,000-100,000 simply based on people and their ideas.  Not that every Tom, Dick and Harry gets funded–in fact, only THREE PERCENT of all start ups who apply for funding actually get accepted.

Home for the next three months, the terrific open space office of eleven in Sofia, Bulgaria

Home for the next three months, the terrific open space office of eleven in Sofia, Bulgaria

A crucial part of being accepted is that the one or more of the founders (a maximum of three people) need to spend from 1 to 3 months physically present on site.  In our case, Sofia, Bulgaria in a fabulous open office designed to hold 10-12 teams (up 30 people or so) who all share the energy and opportunity of being able to test their ideas and get enough cash to actually work on them full time.

The Eleven Venture Accelerator is a new kid on the block, having started last September with $12 million, but it is already generating considerable buzz since it has launched almost 20 companies, some of which have received a second round of seed funding and others of which are seeking Series A funding, which usually starts at $250,000.

Of course all this free support and cash isn’t really free….you give up part of the ownership in the company in return for pretty much blind faith that you someday will return the investment with a nice profit.  After all, at the seed stage, the funder is investing in the team more than the project, which has yet to actually be created!

In our case, we actually do have a product–using Wi Fi to give businesses a constant opportunity to showcase their goods and services to their on-site customers via a highly interactive “welcome” page; their customers a chance to act on these offers, as well as use applications and very relevant links; and advertisers to deliver their multi-media information to an on-site, location specific audience.

Our focus is “captive” tourism, like conference centers, duty free shops, etc.  We have 50 or so sites here in Split using zzzzapp and our venues and their customers love it.  So for us, the funding and mentoring is really a springboard to take us from a small seaside city in Croatia (Split) to see if zzzzapp will work in larger venues in the global marketplace– London would be nice!

The teams settle in for a presentation

The teams settle in for a presentation

The first two weeks of the eleven accelerator in Sofia are devoted to intense one on one meetings with mentors–up to 10 a day!  This is daily practice not only helps fine-tune your investment “pitch” to potential investors, but gets feedback from professionals who represent many aspects of business reality–finance, marketing, strategy, product, software, etc.

Like speed dating, the sessions with mentors provide invaluable feedback as well as help sharpen your pitch to potential investors.

Like speed dating, the sessions with mentors provide invaluable feedback as well as help sharpen your pitch to potential investors.

Although I was the oldest team member there, I have long believed you CAN teach an old dog new tricks, so it was a real pleasure to not only be with people way less than half my age, but to hear seasoned mentors tell us what they thought we could a whole lot better.

Unfortunately, I had to return to Split after the first two weeks, but will be back during the next 10.  The road ahead is daunting, but with eleven’s help and our continued focus on what we are doing, I really think we have a serious shot at putting our name on the list of start ups that made it.  Our goals are modest-$185 million in sales in 18 months.

Hey, it’s 2013, no time to think small–we’re part of an accelerator!

flying there

Flying to Sofia over the German alps…but the drive back was 13 hours, 8 by car and 5 by bus.

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