As part of our Institute for Innovation Development FinTech Radar program, at our recent 6/23 NYC Financial Service Forum hosted by the NASDAQ, we asked Jesse Podell, Managing Director of Startupbootcamp FinTech NYC to share with us his role in leading a major FinTech accelerator and how financial advisors and executives can play a major role in the process:
Jesse Podell: "Today, the terms incubator and accelerators have become interchangeable. There are no real hard & fast rules. Startupbootcamp nominally is an accelerator. First thing to know is we are not seed funds. Accelerators and incubators are organizations that provide something of value besides money and that is network and business support. What money is given is not much, just help in costs of residing nearby for the duration of the program. It can range from $10,000-$100,000.
Structurally, in an accelerator there is more typically a cohort-driven structure where there is a date you apply, date you start, a 10 week business program time period, so it has rigid start dates and end dates. An incubator typically has been more a space-driven thing where startups can come and go. These organizations can be backed by a corporate sponsor(s) or a specific development fund. Our accelerator is backed by multiple corporates, including Intel, Google, PayPal, Salesforce.com, Rabobank, Santander, Mastercard, Thomson Reuters; whereas, eBay has an incubator which is just donated office space where they want to curate the cool people and companies that come in there. Some accelerators are generalists that take in companies that are working on cross-section of cool stuff or they can be sector specific focused, or even based on specific stages of company development, like pre-series A or post-series A. We at Startupbootcamp have a number of global accelerators and today we are talking about our FinTech focused accelerator which is our largest vertical with FinTech programs in Singapore, London and now NYC, and further expansion plans to add Mumbai, China and Mexico City.
So what does Startupbootcamp specifically provide? The special sauce for us is really about mentoring and Bill Hortz and IID has been involved in this. It’s bringing people from the field to talk to the startups, for relationships, for business grooming, introductions, and perhaps to become an angel investor one day. We have a core team of 4 key program leaders on our FinTech accelerator here in NYC, including myself, and a wide range of experts, executives, fellows and entrepreneurs in residence, as well as, over 300 mentors involved in our program. We would like to include more financial advisors and asset managers. Overall, we are a collective where a lot of interaction happens.
So how did we end up with 10 companies for this current class and 13 week program? We started by going on a Fast track tour to 13 cities across the world that was basically one part roadshow for the accelerator, one part pitch event for the startups, and one part a sort of meet-up for the community. We don’t expect every startup to sign up for the accelerator, just a good way to meet the community of entrepreneurs across the world where there may not be a lot of FinTech clubs, meet-ups, or support. We learned innovation can happen anywhere with great startup companies with great ideas and capabilities. From this tour we got a whole batch of applications, had a Selection Day with 120 mentors who guided us to the top 20 companies and to get them in to do a pitch and then we further narrowed it down to 10 companies for our cohort. All are pre-series A funding, teams are 3-4 people, the usual size of a pre-series A startup. Out of applications from 40 countries, we have three from Europe, seven from the states.
What is also interesting about this process is that these companies are iterating through this whole time frame; learning, experimenting, and pivoting the focus of their companies based on the interactions they are having through the program. Bill Hortz’s chart he used in his intro today was great in highlighting that today there is a very different dynamic in the business world vs. the guiding principles used by his examples of Borders, Blockbuster, Kodak, etc. It’s no longer about going slow and making sense of what you got. The innovation rate has changed and lean is what you need - that’s what Bill is talking about. It’s now about building things that people want. It’s not about building what you think is right. It’s not about spending a huge amount of time and resources to build things. These startups can be nimble. They can build very quickly and change very quickly. The one principle that guides most of these amazing startups today is what is called Lean – there’s a book called Lean Startup which has changed the lives of every entrepreneur I know. It’s basically the Bible and this is what it looks like: you build, you measure, you learn and you repeat. So you build a prototype, test it out, you measure and learn if it makes sense and go from there. It’s about running tiny experiments. It’s very similar to the agile movement. Lean Startup is a book everyone should read if you are truly interested in innovation. It’s about validated learning. Not just going out there and building what you think people will want.
Also, if you come to our accelerator space in NYC – and all members of the Institute are welcome to come - you will see this chart all over the space which is called the business model canvas. This business exercise walks you through the best thing a company can do, especially in early stages, visualizing key partners, customer segments, revenue stream, and other key areas of your business. Startup leaders use post-it notes with this chart since nothing is etched in stone. Post a note saying I think this is the right way to go and these decisions and insights are changing throughout the program. It is a really important business exercise, something you should do within your own organizations. Go look up business model canvas on Google and learn more about how to use this vital business tool.
For entrepreneurs, we know that the road to success is not a straight rising line, but more of a massively squiggly mess of a line going up, left, right, back down, all around, till it finally gets to its successful destination. Truth is most startups cannot say they are “crushing it” as they are in constant state of learning and pivoting their direction to get it right. Our first group of cohort FinTech companies stay at our large dedicated space for 4 months where we have mentors and wide range of support and connections for them. After the program, some will raise money, but not all. I don’t measure success in this program based on will they raise a big series A round of funding? We do help by cultivating relationships with 50 seed funds. But, my part of this arc is to help them learn, help them connect, and if they discover they are not building something that people want, help them decide whether they will shut it down and start something else? Many startups in our program have already pivoted on what they do. They are getting very smart. We have support from our other global teams that run programs in other cities. We build relationships with banks and wealth managers that these teams may want to talk to. Some are talking to both large and small financial institutions and running pilots for proof of concepts (POC).
On the issue of our mentor values, we bring people into our space that are curated by ourselves, Bill Hortz, and other friends of the program. The idea is not to bring in arrogant people that think they know everything and are going to sit there and tell the startups everything that is wrong with them. We look for humble people that have the tough love of sharing what the startups need to hear, but who also ask the right questions and talk it through. Mentor activities can be very structured, or a round robin event for the day where you meet different startups that you can become an ongoing advisory mentor for a few. It could be at a cocktail hour exchanging ideas and you jointly decide to keep in touch and hookup on the phone once a week or grab coffee. The key to being a mentor is to just help them without looking for credit. Help them because someone helped you in the past. Help them because you want to be part of something exciting, part of future of this industry.
Please follow us on our social media sites (LinkedIn, Twitter, Facebook) and join us on Demo Day on July 20th at Metropolitan West in NYC. It’s free and you’ll meet a lot of amazing people and companies there. Also become a mentor or introduce us to a new mentor for our program. Towards the end of the program they are really focused on better understanding target customers, investor readiness and pitch training. Who do you know that can help them with that? Who do you know that may want to invest in these companies? Lets us know. Reach out to us, that’s what we are here for. It’s OK to ask stupid questions as we are all learning how to get into this next wave in financial services."