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

 

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© 2010-2019 500 Startups

More on Saola Accelerator

More on Saola Accelerator

Image: 500 Seed Accelerator Batch 23

This is a “saola”, a long-horned ox so rare that it’s often called an “Asian unicorn.” (nevermind that it has two horns!). Saolas are found almost exclusively in Vietnam.

I believe there are other Asian unicorns to be found in Vietnam, which is why 500 Startups Vietnam is pleased to announce the launch of the Saola Accelerator, our version of 500’s flagship program in San Francisco with local experts weighing in. It’s the right time to build a springboard for Vietnam’s next tech unicorns. Read on for more information about the current landscape, what Saola aims to do, and what kind of startups we’re looking for!

(tl;dr — Apply here now: bit.ly/500saola)

 

The Current Startup Landscape, Briefly

Vietnam has shown how much it can do with very few resources. From one of the world’s poorest economies in 1990, it has averaged nearly 7% annual growth since; no wonder Bloomberg has called Vietnam “Asia’s newest tiger economy“. The BBC has even speculated that this country could become the next Silicon Valley, though I would like to think that Vietnam’s entrepreneurs are building something else, with meaningful value-add especially to the world’s emerging economies.

Early-stage Vietnamese startup founders are symbolic of this scrappiness. They have demonstrated the courage to take the entrepreneurial leap, the heartfelt candor to attract early hires, and the all-in hustle to hack out a product and bring on customers, and they have done this with very little financing and experienced guidance compared with more mature ecosystems. Some startups have hit meaningful scale anyways, such as VNG (thought to be Vietnam’s first unicorn), Sendo (closed $51M Series D led by Softbank Korea), Topica EdTech (closed $50M Series D led by North Star Group), and Momo (closed $28M from Goldman Sachs and Standard Chartered Bank). They’re empowered not only by the pursuit of financial gain, but by the desire to benefit Vietnam as a whole and to bring Southeast Asia up to par with any developed region of the world. Hence the presence of 500 Startups Vietnam and our belief in the birth of more unicorns to come.

 

First-Stage Accelerators

Being a founder may be one of the loneliest jobs in the world, but they shouldn’t have to “go it alone”. In more developed startup ecosystems, there are usually many accelerators. In the U.S. alone, there are more than 700 accelerators (Crunchbase searchBrookings Institute study), providing financing, knowledge, skills, access to customers, hands-on operations & growth help, and/or social & emotional support. 500 Startups, Y Combinator, Techstars, and Mass Challenge are among the more notable accelerators. Yet many other accelerators struggle or fail, due to various reasons including too little mentorship, lack of business development, misaligned stakeholders, and others. (Read: it’s really hard to run an accelerator!)

Vietnam is plainly earlier in this journey. According to the Ministry of Science and Technology, there are fewer than 50 self-described accelerators and incubators. The most active programs include:
– Topica Founder Institute (TFI), the Vietnam chapter of global startup launch program Founder Institute
– Vietnam Silicon Valley (VSV), a public-private partnership with the government of Vietnam
– Vietnam Innovative Startup Accelerator (VIISA), a joint venture between local technology company FPT and investment firm Dragon Capital

These programs have generally worked with founders in their earliest stages, as reflected by their programming (e.g. TFI’s) and their investment amounts (TFI – N/A, VSV – $20KVIISA – $15K). Yet several notable Vietnamese tech startups have emerged, such as Appota (TFI), WeFit (TFI and VIISA), Lozi (VSV), and WisePass (VIISA). The programs have played a role in startup formation and founder education, which is why we’ve been happy to spend time with participating founders in trainings, mentor sessions, etc. However, Vietnam has been lacking in programs specifically for founders that are ready to scale.

500 Startups Vietnam has been aiming to fill the gap with our straight seed investment:

  • We have invested very actively. We invested in 18 startups from 2016 to 2017, which made us the most active VC investor in Vietnam over that time (compared with other investors in TFI’s 2016 and 2017 annual market reports). And our 2018 startup total has surpassed our combined total of the prior two years.
  • We have offered a variety of tactical business support, including connecting founders with potential key hires and business partners, supporting PR, reviewing UX and IT infrastructure, etc.
  • We have provided advice for fundraising including strategy, messaging, and connections.

I’m pleased to say that most of our startups are making substantial progress so far. Among those we invested in more than 1 year ago, more than 70% have raised additional capital or exited. Our startups have raised more than $90 million from downstream capital. 3 companies are already “centaurs” or on track to be soon. 2 companies have closed money from Sequoia. 1 company has been acquired.

But there’s so much more to be done: investing in more startups, supporting our portfolio companies scale to greater heights, and generally helping to elevate the ecosystem.

 

Announcing the Saola Accelerator

Since our first Silicon Valley accelerator batch in 2010, 500 Startups has worked with 1,000 companies in more than 40 program batches around the world, including the Americas (e.g. San Francisco, Mexico City, Miami), Europe (e.g. London, Stockholm, Berlin), the Middle East, and Asia (e.g. Seoul, Kuala Lumpur). Lots of hard lessons learned during that time, but we think we’ve gotten pretty good at it. 500 Startups is often called one of the top accelerator programs in the U.S. (including Forbes and Entrepreneur); and we even teach best practices to other accelerator managers.

We’re excited to bring that experience to Vietnam. We’ll invite one of our experienced partners to direct the accelerator and have an all-star cast of folks to help localize the program and work closely with participating companies. I’m also excited to be doing this in partnership with GS Shop, Korea’s foremost retailer with a very active corporate venture team (nearly 500 direct and indirect portfolio companies internationally). GS Shop and 500 Startups have had a close relationship for years, with investments and collaborations spanning from Korea to the U.S. and the Middle East. GS Shop plans to send aides to the program and also match 500VN’s investment in select portfolio companies.

This all means that participants in our accelerator program can get

  • MOAR support — scientific, actionable, no-bullshit help — from our accelerator team members with real experience on strategy, product, marketing, sales, & business development, fundraising, and international expansion.
  • MOAR money. US$100,000 net investment from 500 Startups Vietnam, plus a potential additional US$100,000 from GS Shop for select startups
  • MOAR perks. Access to US$500,000 in perks (free or discounted services) from more than twenty 500 Startups partners including Amazon, Microsoft, and Google.
  • MOAR community. The global 500 Startups family of more than 2,000 founders and mentors are here to support each other, be it resource allocation or wrestling with the most difficult questions 24/7.

As with any of 500’s programs, I expect that we will make some mistakes and need to adjust some things along the way. But overall we’re aiming for this to be a transformative experience for not only participating startups but also for the broader Vietnam startup ecosystem!

 

What We’re Looking For

Any startup can apply if it (a) is a tech or tech-enabled startup, and (b) has a Vietnam connection (e.g. serving the Vietnam market, having a Vietnamese co-founder, and/or having a meaningful portion of the team in Vietnam)

Those are just basic criteria. From there, we’re looking for startups with several of the following:

  • Great founders with commitment, integrity, speed, coachability, and resilience
  • Compelling product that is truly solving a real pain point, and doing so substantially better and/or cheaper than competing solutions. Bonus points for companies using deeper technology.
  • Big market opportunity, e.g. large and/or fast-growing
  • Meaningful traction. Founders often ask us what number they should hit before applying for funding. Unfortunately there’s no single metric or fixed level for this. Each business has its own numerical story to tell. Check out these posts by a16z for an idea of some metrics that we may look at.

Apply here now! bit.ly/500saola
Early Bird / Early Unicorn deadline: January 2, 2019 (your best chance to get in!)
Regular deadline: January 20, 2019

Late deadline: February 15, 2019 (applications are still considered)

PS: thanks for the regional coverage from:
Yahoo!,
Tech in Asia,
DealStreetAsia,
e27,
Vietnam Economic Times,
KrAsia,
Nhip Cau Dau Tu,
Vietnam Investment Review,
and others!

NOTE: this article first appeared on 500’s website under the title “Announcing the Saola Accelerator in Vietnam”.

This article reflects the personal views of Eddie Thai, 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.

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© 2010-2019 500 Startups