Archives for the month of: January, 2014

We are undoubtedly experiencing a worldwide startup accelerator bubble.  There are over 9 accelerators in Brazil alone. Surely this must be good thing?  Well not really. Nearly every new accelerator follows the Y-combinator  model which has worked well in Silicon Valley but has been largely unsuccessful elsewhere.  So what are the problems?

  • Competition for the best startups – Current accelerator models require a sizable cohort to be built before programme kick-off. This presents the real challenge of finding enough quality startups at the time the accelerator is scheduled to start.
  • Over-rigid programmes – A typical accelerator runs a 10-12 week programme. This is a massive commitment to a startup that may be ready to scale. Founders should be able to get follow on funding when they are ready, not at the end of a programme
  • Inflexible start dates – Startups also require flexibility of start date. Missing the enrollment of a programme can lead to a high potential startup having to wait half a year to join the next cohort.
  • Lack of perfomance monitoring – there is little subjective monitoring of progress on most accelerator programmes.
  • Low valuations – accelerators provide small amounts of seed capital for a relatively high equity share in the startup. This can cause real challenges at later funding stages.

What is the answer?  New accelerator models will use technology to attract, assess and monitor programme entrants. It will provide flexible support as and when it is required. It will drive the startup to achieve distinct milestones such as building an MVP or proving product market fit. Finally, it will use sophisticated valuation techniques to ensure that the programme adds significant value to the startup process. We are building out the Dreamstake platform to deliver these attributes.

Dreamstake provides end-to-end support for entrepreneurs wishing to get a startup funded in the shortest possible time. The startup rating system allows entrepreneurs and investors to monitor progress.Dreamstake Academy provides guidance on how to create a successful startup. Dreamstake will link startups with suitable mentors and professional advisors.
Startups that have successfully achieved an acceptable rating will be given the opportunity to feature at monthly demo days and investor pitching events.

 

evocha-dreamstake

I’m a co-founder of Evocha, an online-only clothing brand offering premium quality men’s shirts. We began planning our startup around June 2012, and after a year of careful planning we launched the business on July 30th 2013. Within two months of trading we realised that we had missed the mark, and subsequently made some significant changes to our strategy leading to a pivot in December.

We have since experienced an average of 70% growth each month, attracted the interest of angel investors and entered into an incredibly lucrative partnership to increase our exposure.  So what went wrong? In our case our focus was too broad. We were going after menswear, womenswear and accessories, and it meant that we were ok at doing a bunch of things. But we wanted to be recognised for being awesome at everything we did, and that meant focusing on one product and becoming the best in our category.

We decided that our product would be men’s shirts. In retrospect it wasn’t a bad idea for us to explore different categories and opportunities early on, as it allowed us to gauge the success of each potential opportunity and narrow down on what we thought would be the most lucrative. We simply waited far too long to launch and find this out.  We’ve had to disappoint some customers. And not just any customers – some of our best customers. One customer for example particularly loves the silk blouses we put out in November, but unfortunately we won’t be releasing any more.

We developed strong relationships with suppliers that we won’t be working with anymore. It wasn’t easy to say no to that monetary and intangible value, but we knew that our target market was too broad, and as a startup we couldn’t service it to the standard that we wished to deliver.  Since pivoting, everything is far clearer. Our goal is to offer the perfect slim-fit shirt. We make a number of variations upon the perfect shirt – different fabrics, different cuffs etc. This adds variety to our store, but ultimately we won’t ever deviate from making the perfect slim-fit shirt.

Our customers are incredibly loyal, and without wishing to tempt fate we have yet to have a product returned. We deliver value, and we are clear about exactly what that value is, and who it is for. Everything about our marketing has become easier, because our target customer is now very clearly defined.  We learned more in 2 months of trading than 12 months of planning, and at our current rate of growth I can only imagine where we would be right now if we’d launched earlier.

If I could give any advice, it would be to simply launch your business. Go through the process of development and iteration publicly. Accept any criticism and spend each day making your startup better. There is no substitute for the feedback of strangers, and you need impartiality at this stage. Find someone who couldn’t care less about you or your business and get them to endorse your product without any suggestion or coercion. I can guarantee that this will be the most gratifying feeling, and it truly makes it all worthwhile.

Check us out at www.evocha.com, I’d love to hear your feedback so we can continue to make our products and service better.

 

Dreamstake provides end-to-end support for entrepreneurs wishing to get a startup funded in the shortest possible time. The startup rating system allows entrepreneurs and investors to monitor progress.Dreamstake Academy provides guidance on how to create a successful startup. Dreamstake will link startups with suitable mentors and professional advisors.
Startups that have successfully achieved an acceptable rating will be given the opportunity to feature at monthly demo days and investor pitching events.

We were recently asked to reiterate what Dreamstake was all about. The answer is really quite simple: we want to see Europe create more great tech startups. So here is a reminder about what we truly care about:

  1. We want to support startups with big plans. This means those with scalable business models, those who can disrupt industries in order to make positive changes to the world we live in.
  2. We care about the engineers, because we believe that they are crucial to building innovative businesses. We prefer teams which appreciate the importance of technology.
  3. We support all the change that is happening in the seed funding world. We are advocates of crowd funding and other funding platforms, particularly those which bring about greater access to capital in a responsible way.
  4. We want to make it attractive for investors to invest in early-stage tech startups. We do this by rating all startups on the platform and by providing ongoing support to all of those who already receive funding through our processes.
  5. We believe that European startups aren’t being served well by the current media channels. There are too many rip-off conferences and negative press. We want to provide alternative ways for startups to get the word out, by providing free demo days and social media coverage.

Dreamstake provides end-to-end support for entrepreneurs wishing to get a startup funded in the shortest possible time. The startup rating system allows entrepreneurs and investors to monitor progress.Dreamstake Academy provides guidance on how to create a successful startup. Dreamstake will link startups with suitable mentors and professional advisors.
Startups that have successfully achieved an acceptable rating will be given the opportunity to feature at monthly demo days and investor pitching events.