SXSW 2014 Accelerator vs Incubator Presentation

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Information about SXSW 2014 Accelerator vs Incubator Presentation
Business & Mgmt

Published on March 11, 2014

Author: billaulet

Source: slideshare.net

Summer  2012   •  Summer  2010  –  Startup  Central   •  Summer  2011  –  Wicked  Awesome   Summer  StartUp  Program  (a/k/a   WASSUP)   •  Summer  2012  –  FSA   •  Summer  2013  –  GFSA    

Time   Success  

•  Complete  the  Ramp   •  Entrepreneurs  Not  Companies:     Teaching  our  students  how  to  fish     rather  than  catching  a  fish   •  Fulfill  MIT’s  Mission   Goals  of  FSA  

ValidaDon   MIT  Entrepreneurship  Ramp   InspiraDon,   Idea,   Technology   Classroom   Extra-­‐Curricular   15.390   Escape           Velocity!   The  Grand  Plan:  “The  Ramp”  

We  needed   something  to   support  students!   ValidaDon   MIT  Entrepreneurship  Ramp   InspiraDon,   Idea,   Technology   Classroom   Extra-­‐Curricular   15.390   Most  OQen   Unable  to   Achieve   Escape   Velocity   Plan  vs.  Reality:  Before  FSA  

ValidaDon   CompleDng  the  Ramp  with  FSA    MIT  Entrepreneurship  Ramp   InspiraDon,   Idea,   Technology   Classroom   Extra-­‐Curricular   15.390   Escape           Velocity!   Accelerator  

•  Peter  Thiel       •  Fellows  Program   •  $100k  to  dropout     Challenge RESULTING CONCLUSION Photo of Peter Thiel by David Orban via wikipedia.org Stay in school Be a Serious EntrepreneurORX AND

Changing  Face  of  Entrepreneurship   Herbert B. Jones Foundation’s Milestone Achievement Awards University of Washington

•  Educa=onal   •  Honest  broker   •  Exis=ng  extensive  entrepreneurship                             eco-­‐chamber  &  value  chain   • Tremendous  opportunity  for  a   complementary  program   MIT’s Unique Role

•  Space   •  SDpend   •  Structure   •  Status   How  GFSA  Works   ˅ Globa l

  Community   • Support  -­‐  emo=onal,  pride,  culture   • Learning   • Peer  mo=va=on     Space

1.  Baseline:  $1k/month  per  person   – Creates  full  focus   2.  Milestone  Awards   Stipend Area   Mtg  #1   Mtg  #2   Mtg  #3   Mtg  #4   Total   Customer   $5K   Product   $5K   Team   $5K   Financial   $5K   Cumula=ve   $20K   3.  Discre=onary  budget  available  

1.  April  6  –  1st  round  of  applicaDons  due   2.  April  –  interviews   3.  May  1  –  decisions   4.  3.5  month  program   5.  Demo  Day  at  t=0  FesDval  (mid-­‐September)   6.  Goal:  student  capabiliDes  reach  escape  velocity   Structure Student Team Mentor Network •  EiRs •  VMS •  Catalyst Prototyping •  Labs •  IDC Committee •  Holds team accountable •  Customized for team •  Members have BoD experience •  3 monthly meeting and 1 final meeting Tues & Thurs Luncheon Series •  JIT Education & connections •  Internal & external Informal Support •  Staff

General  Rhythm     Validate  &   invalidate   idea  based   on  Primary   Market   Research   (PMR)  &   refine  team   1st  30   Days   Con=nue   to  refine   team  &   focus  on   product   defini=on   &  dev   2nd  30   Days   Financials,   product   dev   iteraDons   &  polish   for   gradua=on   3rd  30   Days  

1.  Acceptance  with  Social  Norms       2.  Good  Housekeeping  Seal  of  Approval/Status     Status

ReacDon  of  Students  &  ApplicaDon  Process   ALL  APPLICATIONS   129  Teams,  376  ParDcipants,  241  MIT  Students  (All  Schools)   FIRST  SCREENING   26  Teams,  88  ParDcipants,  61  MIT  Students   GFSA  FINAL  SELECTION   10  Teams,  35  ParDcipants,  25  MIT  Students   Other  Summer  Accelerators:     40  Teams  –  MIT  Beehive  Coop   30  Teams  –  MassChallenge   RockHealth,  HealthBox,  YC,  etc.  

GFSA  EducaDonal  Component   TEAM   •  Founders  Agreements  &  Equity   Splits   •  Hiring  and  Firing  Employees   •  Developing  Company  Culture     CUSTOMER   •  Primary  Market  Research/   User  Innova=on     •  Developing  a  Persona   •  Securing  your  First  Customer   •  Decision  Making  Unit/   Decision  Making  Process         FINANCE   •  Legal  Issues  and  Startups   •  Building  Financial  Statements   •  Entrepreneurship  MicroEconomics:     CoCA  &  LTV   •  Alterna=ve  Ways  to  Raise  Capital     PRODUCT   •  24  Steps  to  Successful  Product  Launch   •  Protec=ng  and  Growing  your  Core     •  Itera=ng,  Refining  &  Evolving  Your   Product   •  Building  a  Pricing  Model    

GFSA  Clinic  Leaders   MIT  Management  and  Engineering  Faculty   Eric  von  Hippel   Maf  Marx     Catherine  Tucker     Fiona  Murray     Sanjay  Sarma    

GFSA  Clinic  Leaders   Internal  Trust  Center  Resources     Bill  Aulet   Managing  Director ChrisDna  Chase   Entrepreneur  in   Residence  &   Student  Evangelist Kyle  Judah   GFSA  Program  Director Elaine  Chen   Rethink  Robo=cs   Jim  Dougherty   Great  Hill  Partners   Charlie  Tillef   50-­‐50-­‐50  Consul=ng   Brian  Halligan   HubSpot   Entrepreneurs  in  Residence   (EiRs)  

GFSA  Clinic  Leaders   External  Resources   Başak  Özer   Nokia Jack  VanWoerkom   Home  Depot   Staples     Christopher   O'Donnell     HubSpot   Kevin  Rustagi   Founder,  Ministry     of  Supply     Kit  Hickey   Founder,  Ministry     of  Supply     Paul  English   Founder,  Kayak.com Prahar  Shah   Founder,  Mobee Aaron  White   Founder,  Boundless     Learning   Joe  Greenstein   Founder,  Flixster   Dharmesh  Shah   HubSpot   Jim  Baum   CEO,  Netezza Chuck  Kane   Founder   One  Laptop  Per  Child  

•  Extremely  Important  “Forcing  FuncDon”  &  Closure  Event   •  Three  Goals  for  Three  Audiences   –  Students   –  GFSA/Beehive     –  Integra=on  of  External  Players   •  PosiDve  effects  already  seen   –  3x  increase  in  student  par=cipa=on  in  t=0  events  from  last  year   –  Fills  pipeline  to  make  next  year’s  GFSA  much  stronger   –  Dozens  of  teams  proac=vely  asking  to  move  into  the  Beehive   •  Videos  of  Demo  Day  presentaDons  can  be  seen  at:            hfp://entrepreneurship.mit.edu     Demo  Day  “GraduaDon  Event”  

0   1   2   3   4   Customer   Product   Team   Financials/Other   Overall   ParDcipant  Data  Validates  AssumpDons   Ability  to  ArGculate  Theory  

0   1   2   3   4   Customer   Product   Team   Financials/Other   Overall   ParDcipant  Data  Validates  AssumpDons   Ability  to  Execute  

ParDcipant  Data  Validates  AssumpDons    Net  Promoter  Score  of  +73       “This  was  one  of  the  most  valuable   experiences  I’ve  had  while  at  MIT.”           “We  learn  a  lot  of  theory  in  class,   but  now  we  know  how  to  execute.”         “The  program  fills  the  chasm  that   oEen  limits  ideas/projects  from   becoming  real  businesses.”         “This  experience  helped  us  to  quickly   develop  the  product  that  addressed   real  market  needs,  and  with  a  high   market  potenIal.”           “This  real  world  experience  really   helps  clear  up  a  lot  of  misconcepIons   about  the  struggle  as  well  as  the  pay   off  in  the  end.”       “I  have  already  advised   professors  at  other  universiIes   about  the  program  and   suggested  that  this  is  the  real   way  to  honor  your  students.”    

OVERALL   • Huge  success  in  allowing  teams  to  make  progress  beyond   best  case  scenario   • Three  months  is  about  the  right  =me  –  less  =me  would   not  be  enough  maybe  a  month  longer  would  be  even   befer   • There  were  conflicts  with  academic  work  at  =mes  but   was  manageable  (WiCare  &  SmartScheduling)   • 10  was  a  good  size  for  year  1  &  could  grow  next  year  but   need  to  be  careful  on  scaling  too  fast     Lessons  Learned  

Lessons  Learned   SELECTION   • Team  should  be  the  #1  criteria  far  &  away  -­‐  the  best  teams   far  outperformed  the  teams  with  more  compelling  projects  at   the  beginning   • Developing  culture  in  the  GFSA  cohort  is  a  tricky  but  very   important  thing.    Keeping  a  collabora=ve  and  posi=ve  spirit  in   the  program  is  important  to  op=mizing  its  success.     • Have  mixed  skilled  teams  makes  a  difference  –  this  is  a  very   good  criteria   • Once  teams  get  funding,  they  should  probably  not  be  in   GFSA      

Lessons  Learned   IMPLEMENTATION   • Key  element  was  giving  the  teams  the  chance  to  revisit  strategy/ direc=on  without  a  loss  of  urgency  (there  was  only  three  months)   • Teams  s=ll  reconfigured  –  founders  issues  took  a  lot  of  =me;  Forcing  a   founders  agreement  milestones  halfway  through  was  very  produc=ve   • Board  mee=ngs  and  milestone  payments  were  extremely  implortant  in   complemen=ng  the  mentoring  Demo  Day  as  a  forcing  func=on  worked   extremely  well  and  was  a  huge  amount  of  work  to  pull    off   • There  is  a  limit  to  the  value  of  mentorship  and  at  some  points  it  can  get   to  be  too  much.  Teams  have  to  do  things  and  get  answers  themselves   rather  than  con=nually  listening  to  more  people.  

•  Accelera=on  works   •  General  Incuba=on  does  not  work  as  well   •  Avoid  Stagna=on:  Accelera=on  Trumps   Incuba=on   Conclusion  

More  info   •  The book •  www.disciplinedentrepreneurship.com     •  Progress Dashboard www.detoolbox.com     29

Coming  March  18:  New  Online  course   •  Google  “edX  Entrepreneurship  101”   •  hfps://www.edx.org/course/mitx/mitx-­‐15-­‐390x-­‐entrepreneurship-­‐101-­‐who-­‐1312    

Top  10  Teams   All  129  teams  that  applied   Number   Percentage   Number   Percentage   MIT  Undergrads   1   4.0%   45   19.7%   MIT  Master's   18   72.0%   113   49.5%   MIT  Doctorate   5   20.0%   62   27.3%   MIT  Postdoc   1   4.0%   8   3.5%   All  MIT  Students  (Including  2012  graduates)   25   100%   228   100%       0   0   MIT  Students  (from  above)   25   71.4%   228   66.7%   MIT  Alumni   4   11.4%   27   7.9%   Harvard  Students   2   5.7%   18.5   5.4%   Harvard  Alumni   0   0.0%   7.5   2.2%   Other   4   11.4%   61   17.8%   All  par=cipants   35   100%   342   100%       0   0   SAP  (4,  11,  MAS)   4   16.0%   25   11.0%   Eng  (1,  2,  3,  6,  10,  16,  20,  22,  ESD)   10.5   42.0%   98.5   43.2%   HASS  (14,  17,  21,  24,  CMS,  STS)   0   0.0%   2.5   1.1%   Sloan  (15  including  certain  joint  programs  with  ESD)   8.5   34.0%   74.5   32.7%   Sci  (5,  7,  8,  9,  12,  18)   0   0.0%   13   5.7%   Whitaker  (HST)   0   0.0%   4.5   2.0%   Other  (postdoc;  Opera=ons  Research  Center)   2   8.0%   10   4.4%   All  MIT  Students   25   100%   228   100%   Preliminary  Results  I:  Input  

Pre  FSA   Topic   Knowledge (articulate)   Capability   (apply)       Scale 1 - 4   Scale 1 - 4   CUSTOMER  average  (across  the  group)   2.4   2.1   PRODUCT  average  (across  the  group)   2.5   2.2   TEAM  average  (across  the  group)   2.4   2.0   FINANCIALS/OTHER  average  (across  the  group)   2.6   2.1     Post  FSA   Topic   Knowledge (articulate)   Capability   (apply)       Scale 1 - 4   Scale 1 - 4   CUSTOMER  average  (across  the  group)   3.5   3.3   PRODUCT  average  (across  the  group)   3.5 3.3 TEAM  average  (across  the  group)   3.5   3.3 FINANCIALS/OTHER  average  (across  the  group)   3.7   3.4 Preliminary  Results:  Skill  Building  

Thank  you!   Any  quesIons?  

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