Atlanta, Badgy, FlashpointGT, startups, Technology

Comparing Accelerator Classes, and the Evolution of Flashpoint

It’s inevitable that successive classes of startup accelerators will be compared, and so, with this week’s demo day for the second class of Flashpoint, Georgia Tech’s startup accelerator, I’ve heard countless comparisons to the first class, which I was a part of. So how do you compare different classes from a startup accelerator?

Comparing startup accelerator classes can be as misleading as comparing children. Comparing a class of 9 month old startups to a class of 3 month old startups is as absurd as comparing 9 month old and 3 month old babies. You may think you remember what those 9 month olds were like, but without photos, video, and careful note taking, the comparisons are likely to be wrong. Further, Survivorship Bias means we’re likely to recall the successful survivors of each accelerator class while forgetting the failures.

So what empirical criteria exist to evaluate startup accelerator classes? I would suggest that initial quality of companies entering a class, viability of graduating companies after 6-12 months, and funding outcomes are all plausible metrics for evaluating startup accelerator classes.

Incoming Company Reputation – How hot are the companies even before they start the accelerator? This can be an indicator of the reputation of the accelerator. Any new accelerator will do well to cherry-pick a bit on their first class and pick some known commodities. Success takes time. Picking companies closer to success helps the early reputation of the accelerator. Our first class had local brand-names in Pindrop Security, CodeGuard, RideCell, and SportsCrunch, who had all raised real-deal rounds. The new class’ only known company was We & Co, with some funding in the bank, and a west coast swagger that confused some locals.

Founder Pedigree – I’ll naively examine this from a perspective of previous startup exits. The first Flashpoint class had Pindrop’s Paul Judge as Chairman and a couple of founders with 8-figure exits in their past. This second class has been impressive. 3 companies have founders who have built $100M+ companies, and at least one other company has founders with an 8-figure exit. Flashpoint attracted more proven founders in its’ 2nd class, which is a good thing for everyone involved. Flashpoint attracted more proven founders in its’ 2nd class, which is a good thing for everyone involved.

Survival – Long term viability is not comparable for a newly graduated accelerator class. Few will mention it, but 3 companies from Flashpoint’s 1st class have effectively folded (moving on from an unviable business is a good thing).

Fundability & Exits – 7 companies from the 1st class have more funding behind them (), and 6 more companies are still active without new funding. 6 months from now, we’ll see how this fresh class has done, even though the thriving survivors from the first class will be even more advanced by then, and presumably some of the new grads will have moved on.

Atlanta can be a tough town for young startups. Few graduates from either Flashpoint class have their entire business sorted out. If they did, few of them would be asking for investor money. If you compare 6 month graduates to fresh graduates, the older class looks better. Comparing incoming momentum, my Flashpoint class had a certain shimmer, but the fresh crop has a nice track record. Over the long term, we’ll all help each other succeed.

Some people were harsh on the new graduates. The hard truth for Atlanta critics is that people who have seen Flashpoint demo days AND demo days of other cities have said that our startups are much BETTER both in pitch and in company quality than other demo days (with the notable possible exceptions of TechStars, 500 Startups, and YCombinator). I’m encouraged by the current Flashpoint class teams that are carving out their funding rounds with messages refined in the fire of Flashpoint. I’m discouraged by teams that aren’t seeing as much traction. Most of these teams are chasing big markets with plausible plans hatched from real conversations with real customers, and the willingness to admit when their assumptions are wrong and adjust course. They’re good startups working hard to become good companies. It may take more cycles of creating companies, selling, and reinvesting, but Atlanta should be finding ways for these companies to thrive.

Atlanta, Badgy, FlashpointGT, startups, Technology

Pivoting without Passion

For web startups, the “pivot” has become a nearly universally applauded badge of honor. There is much to be said for having the boldness to admit you’re wrong about some aspects of your startup and adjust course. Far too many startups have failed by following the same failing strategy into the ground. I’ll use the term “pivot” loosely, even allowing for a change in vision, but a pivot into an area where a team has no vision is a recipe for failure.

The pivot-madness has grown so strong that the pivot-backlash has begun. The Harvard Business Review slams a YCombinator founder for “Too Many Pivots, Too Little Passion“, but they’ve read the situation exactly wrong. They present the story of Brandon Ballinger, who vacillated between 5 different ideas before settling in on one for YCombinator’s demo day. Startup founders ought to be people of passion – perhaps even people of many diverse passions. If a YCombinator founder explores several markets they’re interested in before identifying one that shows some traction, that’s not a bad thing. In fact, it’s far BETTER than picking one of their passions, chasing it for 12 weeks, and hoping for the best. Having multiple passions doesn’t indicate a lack of passion.

In my time at Georgia Tech’s Flashpoint Startup Accelerator, we saw a number of pivots in our class. We had a company pivot from helping people buy cars to resolving family conflicts, from digital publishing to corporate newsletters, from deals for nerds to deals for churches, and many more. All pivots were rooted in Customer Development, and showed some degree of market traction. In the long run, the success of these teams seems to have been more rooted in passionate the team was about their validated business than about the degree of traction.

My company, Badgy, was pressured heavily and repeatedly to pivot. My passion for Badgy comes from previous work in social networks and social games. While many mentors assumed my strongest passion was for social apps, I knew when they pressured me toward building social analytics or social conversation management solutions, that just wasn’t my passion. My passion is ultimately in a fascination with human behavior and motivation, with finding ways for people to find unexpected joy in activities they haven’t seen or done before. We pivoted to broaden our channels. We pivoted our value proposition from “engagement” to increasing distribution of social content, and eventually to driving sales – all of this still perfectly aligned with my passion around human behavior.

Much ado has been made of YCombinator’s invitation to accept companies with no idea. While this may seem insane at first, and it has been defended as a bet on the team, I believe it’s deeper than that. I believe they are looking for talented teams with things they are passionate about. Vision comes from passion, and I believe that every talented team with things they are passionate about can find a way to build those passions into a high growth startup if they are willing to throw away their assumptions and find the path to connect that passion to a market.

A current Flashpoint company I know, We&Co, is passionate about the service industry, restaurant servers, bartenders, retail workers, etc, and they’ve masterfully experimented in that space to find a growth market. Another killer Atlanta startup, Mowgli Games, is passionate about democratizing the creation of creative content. Although this started as a social game to create music that would monetize their users, they’ve moved beyond initial assumptions and have transcended the mundane label of “social game”.

So if you’re thinking about a “pivot”, take a step back. Figure out what pieces of your startup you are passionate about. “The whole thing” is not an option. “I’m passionate about doing a startup” is the worst option – startup-fever is not a passion, it’s just going along with the crowd. In basketball, once you stop dribbling, you have to keep one foot planted and you can move the other foot around to find an angle at a shot or a pass. If you don’t have any feet planted, you’re just spinning in a circle and looking silly. That’s what pivoting without passion looks like. It looks pointless, and it looks ineffective, because it is. First, figure out what you’re passionate about, then iterate around that passion to discover a business.

Atlanta, Badgy, FlashpointGT, startups, Technology

Insider Thoughts on Flashpoint – Georgia Tech’s Startup Accelerator

My startup, Badgy, just finished as part of the first class of Georgia Tech’s startup accelerator. Flashpoint is taking applications for its summer class, and since plenty of people have asked for thoughts and advice, I thought I’d share them in a more public format. Apply by March 18th.

First, Flashpoint is the best thing going in the early-stage Atlanta Startup Community. Many programs exist and continue to emerge. Flashpoint provided the best workspace, mentors, guest speakers, peer group, and curriculum of ANYTHING I have seen in Atlanta. If I were starting a new tech startup in Atlanta today, I would apply to Flashpoint tomorrow. I think they will do a better job this class setting expectations that teams should work in the Flashpoint space, because teams can learn a lot from each other.

Second, companies should know what it is that the LOVE about their startup. Flashpoint will push and prod at every assumption you have about your startup, what it does, how it should work, distribution, you name it. Many of the passions for your startup will form the core of what you are, and Flashpoint will help you tweak every non-essential part of it on the path to finding product-market fit. I think that some of the teams with weaker convictions were somewhat set adrift by this pressure-cooker process. If you just want to start a startup and don’t know why, this may not be the place for you. I do think that some of the feedback can be a bit harsh, and could have been more constructive and rooted in industry knowledge. But bring a thick skin and you’ll be okay – we were getting hammered to pivot until a month before demo day.

Next, Flashpoint is not going to get you “funded”. Yes, the Flashpoint investment fund will probably offer you some cash (up to $25k) to fund some of what you need to do. Yes, we went to awesome demo days at Union Square Ventures in New York and Andreessen Horowitz in Silicon Valley, but the companies with the best funding results so far were the companies that already had the best funding prospects heading into the program. The first classes of any accelerator are an unknown commodity, and will be treated as such. The funding rate of our class will be lower that TechStars/YC, and will probable be lower than future classes of FlashPoint. I think the next class of Flashpoint will see more VC firms send partners instead of associates to FP demo days. I think there will be many success stories from Flashpoint Fall 2011. Flashpoint will make you more fundable, and I credit it for preparing me better for investor conversations that have started even after and outside of demo days.

Also, Flashpoint is not a part-time job. Teams that were distracted by day-jobs and college responsibilities seemed to make less progress than companies that were “all-in”. This is a function of both attention and urgency. I’m skeptical of the idea of bringing corporate teams into the Spring 2012 class, but it’s an experiment and I’m sure Flashpoint will measure it by its outcome.

Lastly, understand that Flashpoint is itself a startup. Flashpoint is following the customer discovery and lean startup principles it puts its own companies through. That means that not everything will be planned, and that things will change in unexpected ways, just like you would expect in your own startup. Just like your own startup becomes better organized, planned, and successful as you iterate, Flashpoint is learning how to succeed in Atlanta, with out community and surrounding resources. The Flashpoint team cares tremendously about their companies’ success, because that’s ultimately how their success will be measured.

Comment with other questions. What do you want to know?