TECHSTARS FOR MOTORSPORT?
If you are going to build a Technology Hub, Techstars literally wrote the book. (Startup Communities: Building an Entrepreneurial Ecosystem in Your City).
In fact, Techstars co-founders, Brad Feld and David Cohen, first coined the word “Accelerator” (as it applies to business and not cars). Recently they told their story to “Talks at Google”.
According to David, back in 2006 Co-Founder Brad Feld was a busy guy. As a serial entrepreneur, former Managing Director of Softbank and Managing Director of Mobius Venture Capital, every Start-up founder in Colorado wanted a piece of him.
As David tells it, even though Brad was in hot demand and very short of time, he wanted a way to remain open to meeting new people. So, once a week Brad would schedule what he called a “Random Day”. On that day, he would meet with anyone at all for 15 minutes. Anyone.
Of course, lots of people took him up on his offer. And, after a 3 month wait, David finally got his meeting with Brad. David recalls that he entered the room and slid a piece of paper folded in half across the table to Brad. It was an outline for what would become Techstars.
As an investor in early stage companies, David was frustrated at the passive approach often taken by investors. Typically, Angel Investors invest a small amount in a large number of companies, essentially playing a “numbers game” where they hope 1 in 10 of their investments “hit it out of the park”.
Instead, David wanted to dramatically improve opportunities for both Startups and Investors by leveraging investor’s experience as well as their money. The key to David’s approach was to allow the Techstars’ investor network to take an active mentorship role in Techstars’ companies.
Ten minutes into the meeting Brad agreed. Brad had only two conditions. That David was not a “crook or a flake”. Apparently, David passed the test because Brad committed to David’s vision, and, together, they launched the first Techstars Accelerator program in Boulder Colorado in 2007. Techstars continues to thrive eleven years on.
Today, Techstars has built Accelerators worldwide, from Dubai to London. In each location, they pride themselves on providing deep engagement for Startup Companies lucky enough to be selected for their program. In return for providing programme events such as: mentor meetings, peer workshops, investor sessions and demo days, Techstars take an equity position in Accelerator businesses alongside corporate partners like Sony or Google. Uniquely, if any founder is not satisfied with the programme, Techstars offer to return Techstars’ equity. This is entirely consistent with their core value of giving with no expectation of reward.
As Brad says “Give before you get. If you follow that principle, you will build a great network. Make sure you are providing real value to the people you are trying to meet and network with.”
Leaders and Feeders
Crucially, Techstars also insist that all their accelerators be “entrepreneur led”. Founders are the “Leaders” of the network and all else flows from that. This means that VCs, Investors, Angels, Universities and the Government are all considered to be very much secondary to the success of any Accelerator. In TechStars’ parlance, these groups are all considered to be “Feeders” to the entrepreneur-led network. As Brad describes it, Feeders are “pulled” into or attracted to the core of the network solely through the vitality of the entrepreneur “Leader” network and their projects.
Brad explains that Feeder organisations are all hierarchies - they operate with their own politics, time frames and rules. He notes that these constraints are very different from a free flowing network, like Techstars, that thrives “by doing”. For this reason, Techstars has to be entrepreneur led.
How might all this work with Perrinn and Project 424?
First, Techstars has launched its first Accelerator for a specific industry – “Techstars Music”. Second, Techstars online Accelerator, “Techstars Anywhere”, leverages a global network of mentors independent of geographic location.
As we feel our way towards an Accelerator model that might work for Motorsport, a mashup of “Techstars Music” and “Techstars Anywhere” would seem to be a great template for a Motorsport Hub. Our Hub founders will not only benefit from the mutual support, mentoring, and funding inspired by a Techstars approach, they can also use Project 424 as a “Gateway Project” and focal point for collaboration to develop their business, technology and talent.
We are already starting to see this happen in small ways. For example, now that the car is designed and ready to be built, we are exploring partnerships with advanced material manufacturers all over the world. We have seen how New Zealand’s America's Cup Team could supply a company in Denver with waste carbon fibre which can then be recycled as raw material for a company in the "Motorsports Valley" (UK) to build parts for the car.
Brad, who has a disdain for Power Point and a love of product demos has a message to us all.
“Get to work. Seriously – just go do some stuff. You’ll be amazed at what happens as a result.”
Let’s see what happens when we build a Motorsport Hub galvanised by Project 424 and the Perrinn platform to do exactly that.