StartupCampWaterloo15 – vikings, bikes, baseball, and organizing your time!

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It had almost been a year since StartupCampWaterloo14 and it felt like it was long overdue. The folks at Boltmade opened their office up to StartupCamp so we tried a different venue and stuck to our original format. It was a load of fun!

Thanks to everyone who attended StartupCampWaterloo15! You folks made it a great event. The following is info on who presented.

From my browser history we had:

http://bykme.ca/
https://complice.co
http://millionaire-labs.com
http://scoremorebaseball.com

Others on the whiteboard:

TheBIKEProject – Renish Kamal
Sharebubble – Lucas Cohen
FromTheseRoots – Mic Berman

Also, our new friend from Iceland via Halifax wrote a great post about the Toronto-Waterloo communities. Take a look: http://vikingentrepreneur.com/mars-communitech-and-the-toronto-startup-scene/

Our next event will be in May. It will be warmer.

Creatively Destroying Higher Education: What have I learned?

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The Creative Destruction Lab at Rotman, in just over 2 years, went from an idea to something that is having a very positive impact on students and founders in Canada. We focused at the broken market for judgement and how the mentorship structure or processes that existed were not optimized for either side of the market – the mentor/coach and the person being mentored.

It has made a difference in Toronto and Canada.

In the Fall I made a decision to leave the amazing folks at the Rotman School of Management at the University of Toronto. It was a really tough decision as my heart and soul went into building the program but with so many great people supporting it felt like the timing was right. As of January 2015 I am focused on teaching a course for Rotman Commerce and I decided to join the best software/product people I know, anywhere, at Boltmade (that is another post).

When I look back at my time at Rotman there are three big things I learned:

  • Mentorship needs to be managed closely, it isn’t good enough to just have people with successful jobs or titles or experience simply meet with people.
  • The University of Toronto is an important resource to the country, graduate students even more so.
  • There is no single model for supporting entreprenuers that works for every school/community.

Mentorship must be managed

When the CDL was started we looked at mentorship walls incubators and accelerators had (web pages that list dozens of mentors) as something we didn’t want to do. Instead we focused on the G7 Fellows being the only mentors that we were going to focus on because:

  • G7 fellows have built (and exited from) successful companies.
  • Everyone’s time is the limited resource.
  • We wanted to reduce mentor whiplash.

The first point, building successful companies (and exiting), is the qualification that we used to speak to the level of judgement that someone has experienced. Building a company is a roller coaster and reaching a certain milestone (exit) requires both luck and good judgement to win out over the bad. That perspective gained on the journey is invaluable.

The founders that are just starting out and those that have built a $100M+ company share a common constraint on their time. Respecting that constraint and optimizing how time is used is essential. That means keeping the volume of email down, writing specific emails, and having very specific requests. Managing time allows you to sharply focus on what is important.

On founder/mentor whiplash, that is something I have written about before. I strongly believe that my key point on the expertise it takes to educate people. Pretty much every program out there that isn’t directly tied to education likely lacks the expertise to effectively educate people. That doesn’t mean that they all get it wrong, if they are focused on education and apprenticeship they could be getting it right. If they are ignoring the importance of education and the expertise required then they might not be as good as they could be.

The University of Toronto is one of Canada’s most important resources

Quietly situated in the middle of North America’s 4th largest city, the University of Toronto’s St George campus houses over 90% of its ~18000 grad students. There is $1.1+ Billion in research annually. A large amount of that is medical research but what is left is still more research dollars than any 2 schools in the country that don’t have a medical school. It’s big and it is the top ranked school by all measures in the country.

What this means is that it attracts some of the best talent in the world. That talent has direct ties to major international cities and the campus educates globally minded students. This is huge. The people there aren’t trying to be the best in Canada. They are trying to the be the best at whatever they do. Anywhere.

Compared to almost all other schools in the country there is a huge number of graduate level students in science based research (Waterloo only has ~3000 grad students in total, 1/6th of UofT). Grad students in Canada are an untapped resource. Too many employers dismiss them as over educated or inexperienced in work. They find high paying work in other countries as a result (the whole internationally connected thing kicks in).

The opportunities for founders and anyone else:

  • You will find really skilled people with deep technology expertise and global connections.
  • There is a lot of research that looks like science fiction to enhance your product or build a product around it — you just need to look.
  • Your company can attract global talent to a city that has has a world class institution. A lot of the really talented people in the world have a partner that has some interested in research.

…and so much more.

There is no single model for supporting entrepreneurs — its art not science

Once upon a time there was just Y-Combinator. Then TechStars took a version of it and then everyone seemed to think there was a single model to rule them all. That model is essentially:

  • People apply and those applications are filtered/selected and a cohort is created.
  • That cohort runs for ~12 weeks where the founders work with mentors towards a due date.
  • Demo day happens and investors compete to invest in these newly minted companies.
  • Success follows!

My more detailed views are a post when I say there is just one model that works – Y-Combinator. I still believe that. If you are going to exchange equity for coaching/training and you have a certain type of company then YC is the only place you should go.

When it comes to supporting entrepreneurship in research based institutions there is no single way to do it. I don’t think there is a single program that could or should try and take on all the different ways to do it. Why? Organizations need to focus. You can provide a single service to a certain customer base but if you try and make everyone happy you inevitable be mediocre at everything.

University of Toronto is the only example I know of that has many different programs being delivered by many different ‘owners’ that have absolute control over how that program is run. That allows them to focus on their areas and deliver the best possible program. There may be some overlap and there may be some mistakes but no one really knows how this is done so the experiments are invaluable and should be watched by everyone interested in entrepreneur education/support.

Overall

I am really excited about the future of entrepreneurship in Canada. I don’t think anyone yet knows how or if there there is a common model to educate entrepreneurs in higher education. We do know many different ways that work and lots of others that don’t work as well. It is an exciting problem that I have worked on for nearly 10 years – I will continue to support entrepreneurship but in different ways.

The Role that Education Institutions play in Entrepreneur Education

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The role education plays in entrepreneurship is a discussion built on the assumption that entrepreneurship is a skill that can be developed. I believe entrepreneurship is a label we place on the human ability to organize, develop tools, and collect resources to survive.

Being taught to have the confidence and ability to effectively apply those skills in a business sense may not suit everyone’s interests but you can be taught how to better leverage your ability in a business situation. Few will ever be truly great entrepreneurs but most can be happy and make a living being an entrepreneur.

If you accept it is a skill that can be developed then the tough questions to ask are: Who can teach it? What role do education institutions have in the development of entrepreneurs? Do we need more resources? Does education need to change?

In October I participated in the Quebec City Conference – a gem of a conference that focuses on venture capital, policy, and supporting companies. I found myself in a room with a number very smart an accomplished educators (this includes a number of other experienced Directors of programs, VCs, academics, and founders) of entrepreneurship in Canada we covered the topic of the role of education in entrepreneurship.

When I left the room I was left thinking that opinions over education and entrepreneurship are shaped by their understanding of what education is (or isn’t). A lot of people only have the perspective of a student in education and they are focused on the classroom only.

I think education institutions as a whole have a general set of responsibilities:

  • Teach people how to learn.
  • Create an environment where students can explore their interests and develop expertise.
  • Through education and research, develop civic minded citizens — otherwise what is the public interest in funding it?

Entrepreneurship education is something that is being discussed specifically like it is something different and special. I think there are three key areas that people are currently lumping into one:

  • Developing companies and supporting founders as they begin the journey by providing space and/or specifically designed extra-curricular programming.
  • Developing students knowledge and skills to either build their own company or succeed at being an employee in an early stage company, otherwise known as (build your own) career preparation as part of their formal education.
  • Intellectual property (or research) commercialization

The three key areas require different things and are measured by different metrics but at the same time are deeply dependant on one another to be successful. I am highly skeptical that a single ‘program’ or department could do all three well. I also think higher education by its design was already doing all three but their core business metrics don’t allow them to focus on it.

Whatever the solution is in higher education with regards to entrepreneurship education it must be anchored in its responsibilities as an education institution. To me that means the outcome is a culture shift — the environment needs to support people that want to build businesses and the people at those institutions need to be incentivized to support the people and the activities around building businesses.

Culture shifts are harder than creating a program. They take longer than election cycles and my guess is that they are a reflection of the culture in the broader community. They talk of education as a whole needs to focus less on the belief that education is broken and focus more on what is working and how to make it better.

10 years of blogging: coder to dad to entreprenuer

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In April 2004 I started blogging. When it started, I wrote about things that I would have posted on uw.general (the wild west of amazing backchannel at U of Waterloo once upon a time) – status updates on the main web page, standards, and other interesting things. That evolved into an interesting timeline of life events over the years. In looking back I can see my transition from a coder working away at web stuff to a dad and entrepreneur. What I learned going back over my blog’s 10 years:

  • Writing more means I have become a better writer or expect more from my writing which means I blog less.
  • Going through my old posts reminded me that startups need community more than anything – that is what gave me the confidence to build one.
  • It is fun to build things. I don’t want to ever stop doing that.
  • I need to shift back to a balance of sharing life events and writing about things I am passionate about.

This is my current top 10 in the last 10 years.

  1. Back then I was really excited about web development, this is when I first started thinking about Ruby on Rails in January 2005.
  2. It wasn’t until the summer of 2006 when I really got excited about development — that summer was a big with the development of some interesting things on rails.
  3. January 2007 my first son was born (and it was mentioned in the Daily Bulletin at the bottom!) – I posted about the next 3 kids but this one was the first.
  4. January 2007 started the mobile project that became VeloCity. As part of that project we built a twitter clone, UW Chatter. It didn’t go anywhere but it was cool.
  5. I started a new job in with the Special Projects Group and I was President of the University of Waterloo Staff Association – that work inspired TribeHR for me.
  6. StartupCampWaterloo was launched. It was small. In early 2008 we hosted the second one at it was big, over 100 people attended including the infamous David Crow and future CDL G7 member Jevon MacDonald. Then in the fall of 2008 we got really excited about the Startup Community in Waterloo at StartupCampWaterloo3 even though the economy was falling apart.
  7. TribeHR was unveiled at DemoCampGuelph – that demo had a bad connection to the projector, lots of laughing, and 4 years later it was acquired by Netsuite.
  8. IgniteWaterloo started and I did the opening presentation as a last minute stand in!
  9. The moment I truly felt VeloCity was successful and the startup community in Waterloo is heading to an awesome place with the amazing 7cubedproject.
  10. I learned how important things like fishing with kids are.

In 2013 and 2014 so far my posts have almost been entirely focused on the work I am doing. The last 2 years have seen a big shift in my focus to family but that doesn’t come out in my blog at all. I will work on that.

The next 10 years are going to be fun!

The Market for Credit and Supporting Entrepreneurs

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Over the last few years of growth in Accelerator or Incubator programs, the overall media coverage of early stage tech startups has increased in Canada. The lack of coverage before the programs existed made media coverage a metric of success. For any entrepreneur support program to be relevant there is a requirement to be mentioned in the media resulting in the Alumni Success Metric as a key metric used to identify success of any program.

I think we need to find a better way to measure these programs and the effect on the problem they are solving.

As more and more programs compete on this metric they spend more on marketing to rise above the others which results in an increase in the costs to deliver a program. I believe competing on this metric can foster animosity between programs and hurts collaboration between a large number of extremely talented people.

What is the problem?

Founders are taking advantage of everything offered to them (as they should) which results to this common scenario in Canada (not based on any particular company).

  • Founders went to University of Toronto (and/or Waterloo and/or Ryerson and/or WLU and/or insert school here) and worked out of Banting and Best (and/or the Garage and/or the DMZ and/or any coworking space).
  • Someone else on the team took a pre-accelerter or some other community education program.
  • They are clients of MaRS and Communitech and Halton Innovation and…
  • OCE has awarded them a grant., MaRS IAF will invest in them, IRAP might have had a role.
  • They might get into another accelerator program before they finally get a few key investors at the table and start to grow.

When they get VC funding or something big worth a media push, what happens? Up to 10 organizations want to be listed and each of them release a story about how proud they are. Few if any list the other organizations or programs or people that helped (because the list is huge).

How this may hurt entrepreneurs?

Funding and product announcements aren’t success, they are a milestone that is blown way up in the local media as a result of everyone getting excited (excitement is good, celebrate the good things). It is possible that the positioning of programs media releases could confuse the market that the company needs to reach.

That said, the media coverage froth is likely localized to Canadian media so it probably has no effect on where the companies market likely is: the United States.

This intense market for credit can be frustrating for everyone who delivers programs. In reality it takes a community to raise a startup. From funders that have done it before to programs designed to focus attention, lower the risks associated with getting started, and build peer groups. We should all celebrate the entrepreneur and collectively be excited there is so many people out there helping them.

The metric is good for something.

Where I think the Alumni Success Metric does work is that helps inspire new founders. Knowing that good things have happened for those that come before them in the same program is the same metric Higher Education uses to recruit undergraduate and graduate students.

How do we avoid the zero sum game around credit?

The metric is not useful for defining the success of any program as most of the support happens in parallel in accelerators or incubators. It is extremely difficult to know what helped and when and where or what made the difference. It creates something for programs to compete over when they should be collaborating.

The stories about companies growing shouldn’t be “x program’s y company has done z” but instead be about how the company achieved this milestone and all the people that helped along the way.

A metric needs to exist that can demonstrate how effective a program is without having each program battle it out with marketing.

Step #1 is that we have to stop thinking of service organizations or accelerators or incubators as startups. They aren’t. They are philanthropic organizations offering a support group and networking services for founders, funders, and service providers.

The main goal is not to build sustainable models around these organizations (how can most realistically generate revenue outside of an education or philanthropic model?) but build a sustainable ecosystem that doesn’t require the current level of philanthropic support. Every philanthropic organization should hope that one day the problem they are solving is no longer a problem. That should be no different with supporting entrepreneurs and everyone should work together to achieve that outcome.

Waterloo Region’s LRT: the debate that won’t end

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The Region of Waterloo is undergoing a major public works project that will place Light Rail Transit along the core of two of the major municipalities in the Region: Kitchener and Waterloo. This ambitious project is being sold as an important infrastructure project for the future of a rapidly growing and exciting place to live. I support the idea of it. I see the long term benefits and I think it will help build a better city.

Sadly, even after a decision was made the debate goes on. It will be a highlight of the upcoming municipal election which I fear could get some people elected based on the public’s feeling on a particular issue that will be oversimplified and placed into sound bites. LRT is so much bigger than an election cycle or two.

I think there is complex set of reasons why this argument will not end but these are my three big ones:

  1. Population density and how/why people use their cars is a big risk that is being brushed over. The “field of dreams” argument (build it and they will come) can not be a suitable response! Explain it to people in how they get around now and how it will be better. If you can’t there is a problem! Figure out how to manage the problem.
  2. If you oppose it or question it openly you are shouted down as being against “the future.” When a young community leader spoke up at council they tried to discredit him instead of discussing his main point that people won’t switch to transit from cars. What are they so worried about? Engage these people and their different views. Adapt! It will make it better.
  3. A very dynamic and flexible leadership group is needed to ensure the plan can adapt to future realities. One example, it might make more sense to place the GO train in Cambridge. The LRT doesn’t get there and a transportation hub is planned for Kitchener — what if you can’t likely have a 1 hour train on that line for 20 years but you can next year in Cambridge?

There needs to be less storytelling and more practicality in the discussions. Good leadership tells it like it is and deals with issues head on. This community needs to take on the issues like the crippled transportation infrastructure with Toronto and not sweep potential risks out of view with idealistic statements of what they hope will happen. Also, there needs to be a larger theme of a walkable city that isn’t just about tech startups but involves the future of recreation, manufacturing jobs (because the discussion can’t ignore the largest employment sector in the region), research, and retail. Make this future more inclusive.

Lets talk big. Talk positive. Include the young leaders and diverse economy into the discussion!

Otherwise, I fear, something that could be so positive for the Region, the Province, and the country might not become a reality.

 

The “Tech Cluster” discussion must include Hamilton

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There is no doubt in my mind that when we are talking about tech in Canada and the future of the economy, Toronto and Waterloo will play a big role. It is one big ecosystem and it’s growing. There are some limitations to this growth and the big scary one is the relative lack of transportation infrastructure west of the Halton Region. This problem is making people choose between communities which isn’t good for growth.

A recent Huffington Post article where I was featured highlights the problem for technology (and just about any sector really) jobs. For myself I work in Toronto where there is a much larger concentration of research (17 000 grad students, $1.2B in research at UofT alone) which is important for me as I am constantly looking for founders with the potential to build scalable companies. With four kids the quality of life that I would like for my kids would be hard to provide in Toronto.

The quality of life issue is something that can be overcome by living in a lot of different communities outside of Toronto. You can have better access to and from Toronto to areas that have a similar quality of life as Waterloo in almost every direction away from Toronto but not west of Halton Region. Those other communities are 45-60 min train ride which is just another 15-30 min over the average commute if you live in Toronto.

The discussion on tech ecosystems has shifted from Waterloo or Toronto to a larger technology cluster of Toronto AND Waterloo — which is great! The problem, I think, is that only talking about Waterloo and Toronto for technology is limiting the stories being told of the amazing technology companies that exist in a broader cluster around Toronto.

If you are going to talk about a Technology cluster in Ontario it can’t be just about Waterloo, it must include the QEW corridor down to Niagara and it should put more emphasis on Hamilton. This area includes the regional municipalities of Halton, Hamilton, and Niagara (could also include Woodstock, Brant county, and Brantford). Combined they account for roughly 1.6 million people — nearly half the population is in Hamilton and it has the largest urban centre outside of Toronto in the south of the province. 

The conversation has to expand as I think it limits the economic growth by cutting off the story telling in the broader ‘technology’ sector. If all we talk about is Waterloo or Toronto we are distracting people from all the opportunity in a very broad area. Research, Software, and Hardware will be sprinkled around seeding growth everywhere. We also need to talk about and support the next evolution of technology manufacturing otherwise this resource rich country will keep exporting raw materials and be reliant on other countries to build our products.

This is not a zero-sum game.

Founders, do not apply to that accelerator

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It is that time of year again when all the accelerators start recruiting heavily for their new cohorts. Out they go looking for some great founders that ideally have some momentum already and the accelerator can take 5-10% of your company for $25-50k. They will market you, they will promote you, you will meet dozens of well intentioned people trying to help, and they will make you feel special.

But here’s the thing the accelerators won’t tell you… you can get all of that for free. What you have to do: build your company, focus on growth, and earn access to a trusted network that can apprentice under along your journey.

It will take 2-5 years to build your company.

You will hate it and love it.

It’s lonely building something even though you are surrounded by passionate people.

You don’t think you can do that on your own? You don’t know where to start? Start with customers. Start with reaching out to founders of similar companies that have exited or are doing something else. Don’t ask for money, ask for their time. Prove to them you can be coached and can move. Amazing things will happen next.

Only apply to an accelerator if it is a strategic move. It is crazy to give up that much equity unless you are absolutely sure you will get a return on that investment.

Remember: getting funded is not validation, getting accepted to an accelerator is not validation, and winning some prize is not validation. There is a lot to be said for natural growth. Customers paying for your product or service are. Focus on that instead of all the applications that will be tempting you over the next 6 months.

What is the Value of the ‘Alumni Success’ Accelerator Metric?

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There is a rapidly growing number of support groups and organizations that fit into the category of accelerator or incubator. What is the value one of the core metrics many accelerators use today ‘Alumni’ success and what does success mean? That success metric can be a funding event, exit, or some other significant milestone that has been made public. Each has a different value but the purpose is to say something positive about the accelerator which is, for many, a key ‘metric’ used to report back to those that back the program.

Why is it a metric at all? After all, shouldn’t accelerator/incubators be focused on making money? The role of accelerators in Canada according to Mark MacLoed:

…these programs are not meant to help investors discover the next giant. They are there to help investors and mentors identify, nurture and develop talent. In smaller markets like Canada’s, we are sorely lacking in proven, been there, got the t-shirt talent.

I generally agree with Mark as the purpose of all these programs is to build a funnel of qualified talent which has a value to those that back the accelerator. That could include investors and/or the government (the tax payer). I will add that what happens with all this support is self guided experiential ‘business education’ but that is another blog post.

When an accelerator releases something that states “congrats to cohort company x on raising money from y” how should future applicants weigh those releases when the company is an alumni of more than one program? How should the people that support these organizations value those announcements?

As a recruiting and reporting tool I can certainly see the value in getting the organizations name out there. The problem is that it starts to sound like a ‘party round’ where so many people have been involved in some way it is impossible to say who made the difference. The truth is they all helped. The value for any one organization is not as high as it would be if the company only worked within a tiny controlled system. That simply isn’t happening and that is a good thing. It takes an early stage business ecosystem to build more frequent and bigger success which includes all points between here and the valley.

This is something very similar to the education system where every school at all stages of education can share in celebrating success of their alumni. If a higher concentration of success is coming from a particular school then that won’t go unnoticed and it should be supported and enhanced.

What I hope will happen peacefully and relatively unnoticed by the entrepreneur is that the organizations that have more success grow, those that low success fail, and new ideas are injected into the process as everyone keeps learning.

 

Accelerator Metrics and Developing Entrepreneurial Talent

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I spent a little time at StartupWeekendHamilton3 in April as a mentor and was talking to one young founder that proclaimed that there was one great accelerator in Canada. Who he said it was surprised me a little and got me thinking, what makes an accelerator “the best” and why should an eager founder care? The baseline in my mind is Y-Combinator. No one can argue it is the best seed stage accelerator based on its results. What is difficult for everyone to agree upon is what does it do to achieve those results or even harder, what defines success?

In my opinion the key things it does:

  • Social Capital via Paul Graham – how he teaches founders and the hacker culture he has built provides entrepreneurs with access to the very best social capital that exists for anyone starting a technology based company.
  • Peer mentorship – the structure of the 12 weeks enables peers to hold each other accountable. This competition amongst comrades is powerful as it turns around the human nature of playing to our own strengths and pushes founders to “keep up with the Jones’s.”
  • Hungry founders – funding is minimal. After a bit of a bump it has since been decreased and I would bet if you look at the successes out of YC the biggest ones started off with the least amount of financial resources.

There is some striking similarity to what YC does and the thinking/observations behind the Goldmine Effect by Rasmus Ankerson (watch it, it is interesting). The basic point is that if you can find the talent that has the potential vs the talent that already been refined you will get a better result. Money and facilities do not make a difference, identifying underdeveloped talent does. I think there are three core factors that go into determining the quality of a given program.

  • Where is the program located? Are there companies in the immediate area just a stage or two ahead that can help you grow?
  • Who is backing the program and what did they invest to make it happen? Do they get involved in the companies they invest in or do they “spray and pray” with their investment?
  • What type of companies have been successful in the accelerator in the past? Who gets funding afterwards? Are the B2B or B2C, SaaS or something else, etc.

What is less important:

  • Demo Day: The rock show nature of Demo Days is not a good environment for investors but you need to take advantage of the intros and the social capital on offer to build those connects yourself.
  • Money: Funding amounts from the accelerator should not influence your decision to go there. Good companies will get funding, build a good company and spend as little as possible doing it.
  • Mentor walls: In Canada there is a relatively small pool of people with both time and capital but there are a lot of people that can help you move the needle in different ways.

Right away some might say that the above “less important” items are what builds momentum and if you look at the YC companies momentum being 3x that of TechStars then how can I say that is less important? These things have the greatest effect after the startup object is already in motion, in my opinion. The less important items are used all too often as *the* way to get the startup object moving.

A simple score card to find out who’s best for you

If a score card was set up to measure a program it should look something like this:

  • The program is located near companies that I am interested in working with
    • 1 – none that I know of
    • 3 – some interesting founders
    • 5 – who we would exit to and/our would like on our advisory board are within walking distance
  • Investors in successful companies that have been in the program are
    • 1 – Not involved in investments
    • 3 – one of 12 investors in the companies that graduate
    • 5 – take a board seat and/or a significant position in the financing round following completion of the program.
  • Companies that have been successful in the program in the past are
    • 1 – nothing like us, we are B2B SaaS and all the successful companies are gaming companies
    • 3 – some are similar to us, there is no particular pattern to the type of company
    • 5 – just like us, we are a hardware company and everyone that has done well post-program are hardware companies
  • Funding we receive from the accelerator program is enough to
    • 1 – we can go 6-12 months no problem, its great to not have to raise or find revenue right away
    • 3 – it is ok but in 6 months if we don’t have revenue or financing we are done.
    • 5 – we can pay rent while in the program but we have to move and stay lean to survive.

This is by no means research quality metrics but it does start to assign some way to weight rankings… for you. If I was going to score YC I would give them a 5, 3, 4, and 5 which would total at 17/20.

What else should be on this scorecard?