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Tuan Trinh: Zen and the Art of E-Commerce Recommendation

Tuan Trinh: Zen and the Art of E-Commerce Recommendation

Plummeting three stories and suffering serious injuries to one’s leg, arm, and back could never be considered a positive event, but some people are able to bounce back from such an experience and emerge a better person. That’s what happened for Tuan Trinh. The Hanoi-native spent three months in the hospital and many arduous weeks afterward learning how to walk and return to normal life. The downtime allowed him ruminate on Buddhist texts as well as the lessons he’d learned while studying in Sweden. Simultaneously becoming more willing to take risks and to stop and soak in the “beauty of life,” Tuan recovered and not long after founded NextSmarty, a technology company that allows small- and medium-sized e-commerce companies to more effectively recommend products to customers.

Supercomputer, Buddhist philosophies, and European work ethos 

When the computer store staff installed Tuan’s new super-computer nearly a decade ago, they asked if they could take a photo of it. It was the most impressive setup they’d ever delivered and they wanted to show it off. The fact that he bought it with his wedding money that most people spend on a house or children’s education says as much about his commitment to technology as it does his wife’s support of his passion. The purchase wouldn’t have surprised anyone who’d known Tuan for long. He developed an interest in technology during high school when the internet was in its infancy in Vietnam. After first using the Internet to connect with and make friends across the country, he became fascinated by the fundamentals and theories that powered it. Such curiosity led him to study computer science at university.

Even before Tuan adopted a Buddhist perspective on the trappings of earthly desires, he placed limited value on amassing financial wealth. Upon graduation, he turned down more lucrative positions at outsourcing companies and joined the startup where he had interned during school. He enjoyed the freedom, flexibility, challenges, and opportunities to grow that the position offered. But Tuan was quick to admit what he did not know, and during his four years with the operation, he discovered he needed to obtain a more thorough mastery of computing fundamentals to really explore his interests. He thus decided to enroll in a master’s program.

Explaining his decision to enroll at Uppsala University in Sweden, Tuan says, “They are the best for innovations and well-known for their distributed systems.” While there, he observed a difference between his peers’ and professors’ mindsets compared to Vietnam’s more conservative mentality. They “work smarter, not harder,” he explains, “and they take risks.” He quickly embraced the philosophy.

While visiting his family in Hanoi and waiting for Ph.D. enrolment results in Sweden, Tuan suffered his accident. After recovering and with the support of his family, he returned to working remotely for companies based in Silicon Valley as his health forced him to abandon plans to return to Europe to pursue a doctorate. While he appreciated the work, it didn’t satisfy his natural curiosity, and in his free time, he tried to solve technical problems “just for fun.” So when a German jewelry company came to him looking to increase sales by improving their online recommendation system, he took on the task free of charge; he simply wanted to see if he could do it.

Tuan & his team at “500 Startups Demo Day: A Regional Startup Showcase”

Tuan asks this question when explaining the challenges inherent in designing an algorithm for small- and medium-sized online retailers. Visitors to these sites are less patient than Amazon shoppers, clicking an average of only two to three times before leaving the site. To yield more purchases, Tuan tried to use algorithms from larger marketplaces, but sales at the jewelry company didn’t increase, so he spent two weeks analyzing the data line-by-line to better understand customer behaviors.

The algorithm Tuan developed in response to the information he gleaned from such close study proved quite successful with the site’s conversion rates increasing 55% and return on investment rising 11.5%. Others quickly took notice. RecSys 2017, the recommender system industry’s premier conference, published his paper, 3D Convolutional Networks for Session-based Recommendation with Content Features,” which summarized his findings. The research was later added to a reading list for graduate students enrolled in a course at the University of California at San Diego.

Fearing conflict of interest and eager to act on the entrepreneurship that is “in my blood,” Tuan quit his Silicon Valley positions and founded NextSmarty with aims to do for other companies what he achieved with the jewelry company: increase sales through effective, algorithm-based recommendations that rely on data in different ways compared to the conventional methods used by larger companies.

Tuan’s plans didn’t go as smoothly as he’d hoped. He admits that his initial success may have resulted in some overconfidence, as attempts to expand his algorithms to other verticals such as music streaming and online dating took a lot of time and effort. The team later decided to focus solely on e-commerce. It didn’t discourage him, though. Rather, it reinforced with what he’d learned in Europe: one must take risks, which inevitably involves failure. Being humble enough to accept and learn from mistakes is the only path to success.

While Tuan scaled back his ambitious efforts to expand the business, he never lost his propensity for exploring technologies in his off hours out of curiosity. And while he meditates every morning for an hour before going into the office to attain a sense of balance, he says that when he gets overwhelmed, he takes a full week off to read about and tinker with a technology topic not directly relevant to NextSmarty.

 

MBA students are taught to swim on dry land, while entrepreneurs jump into the water before learning a single stroke

The company has grown steadily since its 2016 founding, eventually attracting interest from 500 Startups Vietnam. In addition to giving financial support and advice on a wide range of issues including HR, staffing and growth, they suggested he join their first-ever batch of the Saola acelerator. The timing was perfect. As NextSmarty expanded, Tuan increasingly had to manage day-to-day business operations that don’t come as naturally to him as technical matters. Saola taught him how to better interview customers and interpret their comments as well as get sales and technical teams to share a vision.

A variety of expert lecturers with different backgrounds meet with Saola participants to share tangible advice and theoretical knowledge about many of the business matters Tuan has never formally studied. MBA students are taught to swim on dry land, while entrepreneurs jump into the water before learning a single stroke, Tuan says of his time before Saola. He’s done a great job keeping his head above water up to this point, but the accelerator taught him critical skills to move forward.

After a more-than-one-year relationship together, NextSmarty recently hired its first CEO. For many, giving up key responsibilities may be seen as a loss of power, but Tuan is uniquely humble and realistic about his strengths and weaknesses. He believes a CEO will allow him to focus more on the pinpoint efforts he excels at. This, along with what he learned through Saola, should spur vertical expansion in Southeast Asian markets with the ultimate goal of being the premier recommendation tool for small- and medium-sized e-commerce companies in the region. 

In addition to gaining more clients, Tuan hopes to investigate the interplay between online and offline customer trends. He’s observed an interesting back and forth between the two and is eager to see how AI can facilitate better experiences in both areas. Mindful to supplement these business goals with mental and spiritual health, he says he hopes to go on a week-long meditation retreat sometime soon. Rather than distract from his goals, such moments for reflection helps him maintain perspective and remember “we only have one life.”

 

Written by Paul Christiansen

NOTE: This article reflects the personal views of Paul Christiansen and not necessarily the views of 500 Startups. Nothing in this article should be construed as an offer, invitation or solicitation for investment, or be construed as investment advice. Data provided is as reported by portfolio companies, third-party sources, and/or internal estimates and may not have been independently verified.

San Francisco
814 Mission St., 6th Floor
San Francisco, CA 94103, USA

© 2010-2019 500 Startups

Mike Villar wants to put romance back into advertising

Mike Villar wants to put romance back into advertising

A battle-hardened marketing veteran, Villar wants you to practice constraint. “Relationships escalate one step at a time. Selling without a story is like asking someone to marry you on a first date,” he told the dozen startup employees going through Saola, an accelerator program run by 500 Startups.

The entrepreneurs come from a handful of early-stage companies; their bios read any combination of data scientist, Silicon Valley veteran, Ivy League grad, competitive programmer, competitive gamer, mathematical physicist, computational biologist, 3x founder, defecting corporate lifer. To some of them, “sales” is a dirty word, an oil slick contaminating the purity of science. That’s why 500 summoned Villar: a high-functioning storyteller who’s obsessed with “putting narrative to data.” Villar said f*ck you to sales (as we know it) a long time ago. He levitates above the content scrap yard. He’s seen the matrix of advertising. He wants you not to flush that precious VC money down the toilet by buying tone-deaf Facebook ads. 

Villar dropping truth bombs about paid advertising

Before choosing a career in business, Villar spent five years in pre-med: “I thought I wanted to be a doctor. After taking comparative anatomy and slicing people open, I realized that this was not working out for me.” Wired for science, he follows a data-driven approach to marketing religiously. Villar peppers his talks with acronyms from ARPU to CAC to UGC SEO, using metaphors culled from poker, casino and slot machines (if you start to see a theme here, “Paid marketing success is just controlled gambling,” he confirms.) The guy has digital marketing down to a hard science. Back home in the Philippines—also known as ‘America junior’—Villar runs an agency called Growth Rocket for e-commerce clients, most of them based in America. In his former life, he failed miserably at starting up (twice) and lead marketing for a few companies including ZipMatch, a real-estate marketplace, also a portfolio company of 500 Startups. In 2016, ZipMatch sent Villar to Distro Dojo, another startup program under the brand of 500. “500 Distro Dojo is growth marketing accelerator that invests and trains startups around the world,” reads a message on the official website. Villar still fondly remembers the intensive program: “The beauty of programs like these is that you gain access to experts. Apart from Saalim (Chowdhury) there were a couple of other experts who flew in and just looked at the products and rapid-fired ideas to improve.” 

When Saalim Chowdhury, director of the Saola program, put out a feeler on his LinkedIn to see whether anyone was interested in coming to Vietnam to mentor startups, Villar was among the first to answer. “When you transition into an established industry or a cushy job, you kinda miss feeling alive. You miss that urgency where everyone is on the same page and not just kicking back and becoming complacent. Startups bring that out, and you don’t see that a lot anymore. This week has been really invigorating for me,” he talks of working with the Saola startups. He continues: “I miss the pace. I miss the problem-solving. The problem-solving in startups is unparalleled, something you’ll hardly see in a traditional, established enterprise. Every day you’re solving a new problem. That makes you feel alive.” 

While pushing the startup founders to conduct growth experiment at the same high speed, Villar also wants them to reflect on the core of their stories. Amid a whirlwind of a week in Vietnam, Villar sits down with 500 Startups to talk paid marketing, founder support, and modern customer courtship:

 

Have the 10K-foot view

“To a man with only a hammer, everything looks like a nail,” Villar cites the law of the instrument as the main reason marketers are wasting resources. “But once you see the whole picture, you don’t become defensive if one channel doesn’t work. You typically see that with specialists, people who say, ‘We’re gonna make everything happen with SEO.’ No you’re not. Because that just doesn’t work. You have to take a step back and look at everything and form a holistic understanding of it,” he adds. Villar encourages sharing this vision with the whole team: “People need to be able to correlate the work that they do for the company with the bigger picture, and not a lot of companies do that. Again, you need to be able to zoom out and have the 10K-foot view, as opposed to be myopic.” 

 

Jab, jab, jab, right hook

Back in 2017, Cision anticipated that “the biggest change [to paid media] will be a pivot to storytelling and relationship building.” Villar echoes other marketing professionals in this emphasis on story: “There’s no sale without the story; no knockout without the setup. Remember jab, jab, jab, right hook. If all you do is throw right hooks, you will get KTFO’d.”

Naturally drawn to narratives, Villar enjoys graphic novels and worldbuilding with his son. “My personal mission is to read my kid a bedtime story every night until he’s not interested in bedtime story anymore. What we both enjoy is the choose-your-own-adventure kind of story. And those don’t have books. I’d lay down a scenario for him and basically ask him to choose what he’s going to do as a character in the story. For example, I’d tell my kid a story, ‘You are an intergalactic astronaut who fights evil. You see a spaceship in the horizon, what are you going to do? Are you going to approach it, or are you going to run away?’ That kind of story.”

 

Extract the ‘why’ from the data

A story, by definition, needs a point. As Villar puts it, “there’s always a story behind the data. I always tell my analytics team that everyone can put a report together. With digital marketing, there are so many data points that sometimes people are obsessed with very shallow metrics: email open rate, email click rate, post engagements, etc. The question you should be asking is how that influences your brand, and how that drives the bottom line. How does that translate into value for your client? Piece that story together and put things into narratives.”

 

Take care of your engine before burning more fuel

When asked about a daily habit, Villar cites meditation as the most nourishing. As with many startup founders, a lot of what he does is self-imposed suffering. Villar recommends meditation for startup founders who’re dealing with anxiety: “At the end of the day, you take a step back and you feel like everything is okay. If you zoom into the everyday chaos of your life, everything feels hopeless and f*cked and there’s no end in sight. But if you could excuse yourself from that battle, climb up the mountain top and feel like ‘okay, I just need to do this and this,’ then it’s not that bad.” 

Villar knows too well that founders don’t have the luxury of work-life balance, but agrees that a part of VC funding should go into making sure founders don’t crash and burn. Sitting in 500 Startups office with a coffee in his hand at 6PM, he shares: “I don’t buy into this hustle-until-you-die culture. At the end of the day, you should still care for your health. Hug your kids. Do whatever makes you happy.” He then returns to taking evening calls with his team based in Los Angeles and Manila.

 

Written by Lace Nguyen

NOTE: This article reflects the personal views of Lace Nguyen and not necessarily the views of 500 Startups. Nothing in this article should be construed as an offer, invitation or solicitation for investment, or be construed as investment advice. Data provided is as reported by portfolio companies, third-party sources, and/or internal estimates and may not have been independently verified.

San Francisco
814 Mission St., 6th Floor
San Francisco, CA 94103, USA

© 2010-2019 500 Startups

5 things you’ll learn in the 500 Startups’ accelerator program

5 things you’ll learn in the 500 Startups’ accelerator program

Written by Poornima Vijayashanker

As a founder you might be thinking, “Is a startup accelerator program worth my time? What could I possibly learn from a startup accelerator program that I couldn’t just learn on my own?”

I’d say if you have a network filled with prospective investors, employees, customers, and attorneys who have years of expertise on the ins and outs of your the particular market and industry your company is serving, and of course, the time to share all of it, you’re all set 😉

Don’t have it all? Here are 5 things you’ll learn, specifically from the 500 Startups’ accelerator!

PreMoney 2018

1. The startup accelerator program keeps up-to-date on what is going on in the fundraising market.

The fundraising market is continuously in flux.

One area of flux is the amount of investment. In a span of 15 years, the private investment market has gone from contracting to expanding to contracting again. Many factors contribute to this caterpillar effect, here are a couple:

Fundraising typically expands during a period where companies have exited by either going public or have gotten acquired. As a result, founders decide to put their new funds to use by becoming an angel investor or contributing to private investment funds in hopes of receiving better returns than what public markets are providing at the time. Venture capitalists operate the same but manage other people’s money and receive it from limited partners.

Contraction soon follows an expansionary period, and how much depends on if there was a glut of companies that received funding, who couldn’t raise additional capital, were not able to successfully exit, or if limited partners and angel investors start pulling back and scrutinizing investment practices and areas. Usually, they go into a holding period until one of their investments has successfully exited.

As a busy startup founder, do you think you’ll have time to keep up with the flux?

In the 500 Startups’ Accelerator, our staff is dedicated to keeping up with these trends. You’ll have an opportunity to meet with them, and learn what matters to the success of your company, such as:

  • how to grow your company to attract investment
  • how much capital you need to raise
  • which investors are actively looking at companies like yours and writing check
  • what are acceptable or unacceptable deal terms, for you and your investors

PreMoney 2018

2. The startup accelerator program knows how investors think and will prep you for meetings.

Another area of flux is how investors evaluate companies for the various stages of funding, e.g., Seed, Series A, B, C and so on. Here are a couple of examples of this flux:

10-15 years ago, a first-time founder who had built a prototype (irrespective of the industry they were disrupting) could probably get meetings with investors and raise around $250K of seed capital to get going. Fast forward, and today, first-time founders better have traction, traction, traction, and know what that means concerning their industry and business model. Not to mention having answers to questions like why now, why them, why they chose specific distribution channels, and how their product is defensible?

The investors who previously wrote $25-$50K checks to 10-20 founders are now deploying larger checks to fewer founders.

Plus, it’s hard to tell how an investor is evaluating your company.

  • Did they say no because they have 10 other similar investments?
  • Did they say no because they have seen 10 other similar investments fail?
  • Did they say no because have talked to 10 founders like yourself, and they don’t think you and your team are the ones to execute?
  • Did they say no because they think the market you are going after is contracting?
  • Did they say no because they don’t understand how the market you are going after is expanding?

Hard to say, and you probably won’t get a ton of detailed feedback even if you ask! However, having invested in 2000+ companies, you can count on 500 Startups to teach you what will and won’t resonate with other investors.

500 Blockchain Track

3. The startup accelerator program connects you to other founders. You can learn how other founders run their companies.

Everyone has their style of leadership, but entrepreneurship can get pretty lonesome without a trusted peer group to lean on.

The 500 Startups’ Accelerator provides co-working as part of its 3-month startup accelerator making the daily grind a lot more manageable and friendly.

Here’s why other founders found it invaluable:

“At the low-point of my startup, I had a serious founder issue that I could only chat with my fellow 500 Startup founders. Thanks to 500 Startups’ accelerator for the great friends and family, who provided me solid advice and support when I was down.” — Aaron Blumenthal

500 Batch 24 Demo Day

4. The startup accelerator program stays up-to-date on the legal landscape.

If you’ve launched a product and are making money, do you need to worry about legal?

You have probably received advice like: “You don’t need an attorney to start a company!”

It’s when there’s a “people problem” staring right at you, such as a disgruntled employee, co-founder issue, or customer complaint that you think about getting legal counsel.

Even waiting until things go well is too late. Founders who start looking for counsel when they need an LOI, convertible note, or some other legal document drawn up become THE bottleneck to closing deals!

Not to mention that business law is also in flux.

Do you know what general solicitation means?

Case in point, as a founder you need to know what the boundaries of doing business are in the US and abroad. 500 Startups brings in attorneys to give talks and share best practices around building a company. They also showcase what to look for and how to work with legal counsel.

This alone ends up saving you $$$$.

500 Batch 20 Demo Day

5. The startup accelerator program provides access to growth marketers and growth marketing techniques

“There are many marketing channels. I’ll try them all till I find the one that works!”

However, do you have the budget, time, and energy?

You might think of hiring an agency or a growth hacker, but finding, vetting, and hiring them can be challenging!

The challenge with going with an agency is that they typically require a 6–12-month retainer and usually a minimum of $3K-$5K per month, not including ad spend. In case you’re curious ad spend, depending on your market, could be a minimum of $2K to $10K+ per month.

Hiring a growth hacker is similar to the agency, you’d need to hire someone on an ongoing contract and set aside funds for the ad spend.

The other BIG issue is that if you hire a growth hacker-slash-agency when you aren’t sure which channels your customers are on, you will blow through a fair amount of money running experiments. Of course, growth hackers and agencies don’t mind. They are getting paid to run experiments regardless.

Moreover, while they do their best, they cannot guarantee results immediately, which is why they ask for the retainer.

At the 500 Startups’ Accelerator, we’ll walk you through experiments, and help you optimize the results.

The 500 Startups’ Accelerator assigns each company an advisor focused on distribution. Their sole role is to help you grow, grow, grow.

These are experts who know what is and isn’t going to work and why, which saves you time, money, and energy!

Chandini Ammineni who runs 500 Startups’ growth program says:

“Startup founders tend to do what’s the next coolest thing in marketing, instead of what is right for them. Part of that is lacking focus and not knowing how to prioritize. The 500 Startups growth program, helps startup founders figure out next steps for the stage of their company. We have people on staff who have worked with hundreds of early-stage startups and have amassed a wealth of knowledge. They know what does and doesn’t work based on the size of a company, customer segment, product type, pricing, and other factors.”

 

NOTE: This post first appeared on 500.co under the title “5 Things You’ll Learn In The 500 Startups’ Accelerator Program

 

San Francisco
814 Mission St., 6th Floor
San Francisco, CA 94103, USA

© 2010-2019 500 Startups

You have been accepted into 500 Startups. Now what?

You have been accepted into 500 Startups. Now what?

Author – Eugene Vyborov, CTO, YayPay (A 500 Startups Batch 20 Company)

Among the 180+ independent accelerators around the world, American programs hold sway and considerable appeal. Getting into a US-based accelerator is a dream for many startups, especially ones that are based outside the United States. It’s easy to see the attraction: accelerators offer access to the American ecosystem of innovation, collective wisdom of successful entrepreneurs, visibility to prominent VCs, and a trip to the US, all in one package.

From reading cover stories in magazines, one might buy into the idea that once a company is accepted into a prestigious accelerator program, its path to success is clear. The reality is far from it. As I have previously mentioned in “5 Things International Startups Should Know Before Joining a U.S. Accelerator,” acceptance into a top program is just the beginning. My earlier article was based on my experience at Techstars Boston. Now that I have completed Batch 20 at 500 Startups, I am ready to share my thoughts on what it takes to maximize the opportunities and deal with the challenges that come with joining the 500 Startups family.

Let me begin by saying that accelerator programs like 500 Startups are highly competitive. Thousands apply, 30-50 get in. In fact, you have a better chance of getting into Harvard than joining a new 500 Startups batch. If you have been accepted, you definitely have a reason to celebrate. Now, the real work begins.

Purple Go at 500 Startups Batch 23 Demo Day

Here is the thing. Accelerator “freshmen” tend to overlook the need to build a solid foundation in terms of logistics, mental shifts, and financial reserves. By accepting the invitation to join 500 Startups they have signed up for a marathon – and the sooner they begin training the better. Participants must trust the process that is built by experienced investors and entrepreneurs, but they must also come prepared. From having been a part of both Techstars and 500 Startups, I can tell you that the accelerator process is powerful, but it has no magic. All any accelerator can do is accelerate the path the company is on, for better or worse. There are things founders can to make sure they are on the right path – before they pick up the speed.

What does that look like? I have interviewed 3 fellow founders and Marvin Liao himself as they prepared to wrap up their journey with 500 Startups’ Batch 20. Here is their advice:

1. Focus on bringing a great product.

An idea, no matter how brilliant, does not cut it. Some programs (like the Y Combinator) will consider applicants in early stages of development, but both Techstars and 500 Startups require that you have a functional product that’s ready for the market. There are some exceptions (a highly innovative idea, or a proven team with strong credentials and a solid track record) but they only confirm the basic rule.

The “functional product” requirement means that you must have a product and it must be good. The accelerator process will fuel evolution and improvements, but your starting point must be sufficiently strong to allow the product to morph without crumbling. Invest your pre-accelerator time and money into making a product that people love. Resist falling in love with the technical aspects of your product, and get the market to fall in love with the way it solves their problem – before you go any further.

YayPay at 500 Startups Batch 20 Demo Day

2. Have a plan for integrating what you learn with the team at home.

The three international startup founders we spoke with all brought several co-workers with them. In the words of Ragnar Sass, the founder of Clanbeat out of Estonia, the ability to include teammates was a “deal breaker” that helped him choose 500 Startups above other accelerators. If your company hopes to break into the US market, it is critical that everyone on the team understands the Silicon Valley, he said.

“I believe that this area is the best environment for developing your business. 500 Startups is also friendly for the non-founders. It is very important that everyone on the team actually understands the Silicon Valley.”

-Ragnar Sass, Clanbeat (Estonia)

That brings us to an important point: few startups can afford to re-locate their entire team to the US for the duration of the accelerator program. You will need a plan for sharing what you learn with your home-base team to bring them along. “Translating” the Silicon Valley culture and conveying the less technical ideas and changes can be difficult. You must have a way of “converting” the knowledge and bringing everyone together, even while you are separated by geography.

PreMoney by 500 Startups

3. Get comfortable with networking.

Participants repeatedly state that networking opportunities are some of the key benefits of participating in 500 Startups. And yet, that networking won’t happen by osmosis. You must have a plan for reaching your mentors, building relationships, and establishing connections that will be strong enough to persevere after graduation.

“It’s all about the people. You can meet your new friends and a lot of very smart people. 500 gives you access to strong mentors who help you understand your real market, give you feedback and advice on how to work with your clients.”

-Alex Zenovich, Friendly Data (Belarus)

The good news is that the 500 Startups program is custom-built to encourage collaboration. Because participants share a co-working space, they get to see each other’s victories and defeats. Don’t under-estimate the power of random conversations over lunch!

4. Remember that “sales” is not a dirty word.

500 Startups is strongly focused on customer acquisition. Whether or not you’re a technical founder, you must understand that just building a great product is not enough.

“Openness to learning sales and marketing is really important. You need to have a mindset for it.”

-Marvin Liao, Founder, 500 Startups

Distribution is the name of the game, and organizers structure the content around helping each batch of companies get to their customers fast. Every startup gets a distribution mentor, but you won’t experience traction until you absorb the idea that “selling” is key to your company’s success.

500 Startups Batch 23 Demo Day

Bonus advice: beef up your English skills!

If you don’t have a high degree of comfort with the English language, there is a limit to how much you will get out of the program. Marvin Liao shared that he would love to see more foreign companies go through the 500 Startups, but the language barrier prevents many great companies from applying. When international teams are present, their conversational facility with English makes an enormous difference on their ability to build the network and maximize their progress.

“Two-thirds of this batch are from the US and a third are from overseas. I do not have a quota. We like international companies, some of our best teams are from overseas. The biggest part is whether they speak English. If you don’t speak English, you won’t do well here.”

-Marvin Liao, Founder, 500 Startups

500 Startups: Lessons learned

Don’t think of joining a US-based accelerator as a binary “yes/no” proposition. The answer may well be “not right now”. Timing matters, as does the degree to which your product is ready for the market. Your team must be open and ready to absorb the volume of sales and distribution learning that has been described as drinking out of a firehose. The application process is highly competitive, and if your team and product have known gaps you may be at a disadvantage compared to companies that are further along in their development.

Lastly, think about what happens after the program. Many participants aim to maintain at least some presence in the US after graduation. Mark Masongson, the CEO and Co-Founder of Canada-based UrbanLogiq, said it best:

“Now that we have access to this network, we cannot close the door on that.”

-Mark Masongson, UrbanLogiq

Marvin Liao has seen companies have success with maintaining an overseas development team and a US-based sales and marketing team.

“The best companies are the ones that keep the engineering team home, but double down on the sales and marketing front in the US.”

Marvin Liao, Founder, 500 Startups

“I won’t say that it’s easy, but we have seen enough examples,” Marvin said, citing the success story of TalkDesk that has a development team in Portugal and a sales and marketing team in San Francisco. The badge of “500 Startups portfolio company” does not come without sacrifice, but it is well worth it!

NOTE: This article first appeared on 500’s website under the title “You have been accepted into 500 Startups. Now what?”

Eugene Vyborov is technology entrepreneur, geek, Co-founder and CTO of YayPay – Batch 20 company that uses AI and machine learning to accelerate cash flow and automate accounts receivables.

500 Startups Batch 20 Demo Day

San Francisco
814 Mission St., 6th Floor
San Francisco, CA 94103, USA

© 2010-2019 500 Startups

This pitch deck will rock your 500 Startups application

This pitch deck will rock your 500 Startups application

We’ve talked about how to make your application to 500’s accelerator stand out, and one of the key points we mentioned was ensuring you have a solid pitch deck. But what does a good pitch deck look like? We’ve looked at thousands throughout the years, so we have a few pointers on what makes a good one, and what mistakes to avoid.

We typically only spend a few minutes reviewing each deck, so keep it brief and don’t overload it with excessive text and images. A well-crafted pitch deck doesn’t need more than 10 slides and will have all of the following key elements (get our free template here):

Slide 1: Your Logo & Elevator Pitch

You only have seconds to make a great first impression and introduce your company, so how do you get us (or any VC) excited about what you’re doing?  We recommend using the following format to introduce your company:

A [product type] to help [target customer] with [#1 problem] by [#1 benefit] using our [secret sauce/differentiator].

No expert jargon, no buzzwords—explain it like you would to a 5 year old. It should be simple to communicate, and at the end of those few seconds we should know who your customer is, how you solve their problem, and what makes your product unique.

Slide 2: The Problem

After the introduction, the first thing you should do is talk about the problem you’re solving. Explain it from the point of view of your customer, rather than the global problem. For example, if you sell remote monitoring software to hospitals, instead of saying “40% of patients are not getting the help they need after discharge,” say: “Hospitals are losing $30B by not having the resources to monitor patients remotely.”

Slide 3: Your solution

Now that we know the problem, it’s time to tell us your solution. It’s important to introduce your product at this point, or you risk losing your audience’s attention. Tell us about your product’s key features and list the top benefits to your customer, and explain how you plan to solve the problem you presented in slide #2. This is a great time to show off some screenshots if it applies.

Slide 4: How it Works

Here you can go into more of the nitty gritty about the user experience and how the tech works.  This is a great place to showcase any proprietary or differentiating technology as part of your product. This is also another good opportunity to show off a few screenshots or workflows if they apply.

Slide 5: Traction

The best way to get our attention is to show us user or revenue growth; so if you have it, put it right after your product explanation. Typically, you would only show one metric of growth and put it in a chart. Highlight the current state of this key metric, such as last month’s Monthly Recurring Revenue (MRR – if you have a subscription business), or Gross Merchandise Volume (GMV – if you have an e-commerce or marketplace). Another metric to highlight is your growth rate Month Over Month (MOM). If you’re a B2B company, put a few of your more notable client’s logos next to your graph if you have them.

Image: 500 Batch 23 Demo Day

Slide 6: Business Model

How are you making money? And if you aren’t making money yet, how do you plan to in the future? Use this slide to tell us about your top sources of revenue, and prioritize them by size. Examples of common revenue models are:

  • Direct: e-commerce, subscription, digital goods
  • Indirect: advertising, affiliate, lead generation

Slide 7: Competition

You can’t avoid competition, whether direct or indirect, but you can show us how you’re different from them. The last thing you should do is say you have no competition—there’s always competition, and saying you’re the “first” to do something often shows a lack of knowledge about your space. Be honest, and show us where you excel in areas that they don’t. We like to frame this as:

Unlike [existing alternatives], [your product] [primary differentiator] and [secondary differentiator].

Your product should be the only one to offer this combination; and if you put it in a quadrant, your product should be in the upper right corner while your competitors would be in the other (lesser) quadrants.

Slide 8: The Market Opportunity

We’re looking for markets that are BIG, so there should be either a market size of >$1B or an expansion plan that will get there. Two methods for calculating market size:

  • Top Down: Find research that has been published by a third party.
  • Bottom Up: Calculate users against transaction value and frequency:
    • X customers in your market
    • $Y average transaction size
    • Z number of purchases per year
    • X * $Y * Z = >$1B

Slide 9: Progress to Date

Showing major milestones in your business tells us how much progress you’ve made so far, and where you are in the business. Examples would be when you launched (or when you plan to launch), when you landed your first customer, and if you gained any sort of recognition or award. This is also where you can show when you received any previous investments.

Slide 10: The Team

Here’s your chance to highlight your team’s unfair advantage. Many VCs will tell you that the team is the most important part of the company, and that couldn’t be more true—especially at the early stage. Ideas often change and businesses pivot, but the founders stay the same, and it’s the founders that we’re betting on. Here’s a few ideas that will help you stand out:

  1. Experienced entrepreneurs: Have any of you built and sold companies before?  This shows that you have an execution advantage.
  2. Deep product or tech experience: This shows that you have a product or differentiation advantage.
  3. Deep industry experience: Show that you have insider knowledge, and possibly a network to leverage as your advantage.
  4. Sales or customer growth at a relevant company: This shows that you have customer acquisition advantage.

Be careful not to be too verbose here—too much text will likely be forgotten, so highlight only notable achievements. One or two brief callouts per key team member is the perfect amount.

That’s it!

Ten slides is all it takes to show us what makes your company great. If you follow this guideline, it will greatly increase the chances that your application will get noticed. And if you’re still struggling with where to start, we’ve created a handy 500 Startups Application Pitch Deck Template to get you going.

NOTE: This article first appeared on 500’s website under the title “This Pitch Deck Will Rock Your 500 Startups Application”

Author: Rebecca Woodcock

Rebecca is a Venture Partner at 500 Startups, where she manages the San Francisco accelerator’s health tech track. Previously she founded CakeHealth.com (acquired in 2015), to help individuals track and manage their healthcare expenses, and was a TechCrunch DISRUPT finalist. She is recognized as one of 70 Digital Leaders by the United Nations, and has also been an advisor to the White House health data standards movement for patient access. You can often find her kiteboarding in Baja California Sur.

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814 Mission St., 6th Floor
San Francisco, CA 94103, USA

© 2010-2019 500 Startups

Turing helps unlock Vietnam’s tech talent to the rest of the world

Turing helps unlock Vietnam’s tech talent to the rest of the world

“Vietnam is a hub of business process outsourcing along with IT outsourcing. It’s an excellent complement for multinational corporations managing big datasets and looking for data cleansing ahead of software development.” – Forbes

Vietnam has emerged with a rising tech talent pool: the many key factors attributed to this growth include an increase in STEM education, economic policies that encourage domestic and international entrepreneurs, and investments by private tech companies. The fruits of the combined labor of government and private investment are an increasingly skilled workforce that has pegged Vietnam as the technology hub for Southeast Asia. There is a great potential within the Vietnamese tech workforce that will greatly benefit companies throughout the world.

The tech industry demand for talent presents many opportunities for a workforce like Vietnam’s and presents a unique resource for companies across the globe. While India has been a primary outsourcing focus, Vietnam presents itself as a viable contender for the world’s market.

Vietnam currently has around 250,000 engineers, the number of tech jobs having doubled over the last three years. Despite salaries “shooting up” recently, Vietnam’s IT labor costs are estimated to be 40% less expensive than in China and India, according to VN Express.

Turing plans to close the gap between Silicon Valley companies and the relatively untapped tech workforce in Vietnam. At the touch of a button, customers have the benefit of finding the ideal candidates that will develop their products. 

Turing has built the first labor marketplace based on Artificial Intelligence to provide a scalable team of elite, pre-vetted, remote software developers to Silicon Valley companies. Turing’s AI analyzes data from various sources to build rich developer profiles and then matches them with companies looking for engineers. The company believes remote teams are the key to solving the tech challenges and delivering accelerated development.

We believe Vietnam will become a technology hub not just for Southeast Asia but across the emerging world. We’re working hard – like the talented entrepreneurs we support – to help make that happen.” – 500 Startups Vietnam

500 Startups Vietnam has invested in Turing to help talent in Vietnam get access to opportunities and make an impact on the global tech market. The joint effort will not only provide an easy way to pair entrepreneurs with Vietnam’s tech workforce, but also further the connections to an eager global market. 

San Francisco
814 Mission St., 6th Floor
San Francisco, CA 94103, USA

© 2010-2019 500 Startups