September 17, 2013, marked the first annual Be Great Fest, a red carpet event celebrating the Los Angeles startup community. Los Angeles incubator and accelerator Be Great Partners announced their launch of nine new co-working spaces set to be located throughout the greater Los Angeles area. Before the event, Irina Patterson, who heads up seed financing research and development within 1M/1M, interviewed Lin Miao, the incubator’s founder, to learn more about Be Great Partners and what they do.
Irina Patterson: Tell us in brief about the incubator.
Lin Miao: Be Great Partners is a leading technology incubator in Los Angeles with only one mission in mind: building successful products by investing in talented entrepreneurs.
IP: What year were you established, and where are you located?
LM: We started in 2012 and are on the Miracle Mile in Los Angeles, on the 21st floor of the Variety Building.
IP: How are you funded? Are you for-profit or nonprofit?
LM: Be Great Partners is supported by a $6 million friends and family/angel fund. We’re for-profit.
IP: What are some of the companies you’ve incubated?
LM: Quite a few: Close, Hexum, Kively, Scambook, Hullabalu, Skinny Bikini, Taste of Blue, Enplug, Dealflicks, Friendbuy, NatureBox, MeUndies, Achievemint, Republic Project, Skycatch, Lettuce, SendHub, Creative Market, Eversnap
IP: What was the purpose of setting up the incubator?
LM: BGP identified LA as an up-and-coming tech industry and startup hub. We strategically positioned ourselves in the heart of Los Angeles in order to capitalize on the city’s resources and potential. BGP hopes to nurture LA into the world-class tech center it can, and deserves, to become.
IP: Does the incubator have any particular industry preference, or is it fairly broad?
LM: BGP is focused on building disruptive consumer and enterprise applications.
IP: Introduce some key people involved with the incubator program.
LM: I’m our founder and CEO. I sold my first company for $60 million at age 24. I was named as one of Businessweek’s Top 25 Entrepreneurs Under 25 in 2007.
IP: What kind of experience do you look for in founders or founding teams?
LM: In founding teams, we look for a CTO who really understands what needs to be done to execute proper development. In a CEO, we look for someone with the vision and charisma to rally a strong in-house team as well as outside investors. Does the person know how to navigate a successful seed round? Can he or she turn their advisors into investors?
Founders that have a track record of successful exits are usually good indicators of a positive ROI. If the founders have yet to have a successful exit, what have they learned from past failures?
IP: What makes your incubator different from others?
LM: Be Great Partners offers the resources and infrastructure of an incubator without the rigidity of a “one-size-fits-all” program. We respect the particular and unique needs of all of our portfolio companies. While one company might just need a bit of legal guidance, another might need a complete development overhaul. We don’t waste our collective time or resources where these aren’t specifically needed.
Be Great Partners also has hands on experience bootstrapping our own products. This sets us apart because we are intimately familiar with the daily hurdles a startup faces. We use our successful experience to guide startups in the right directions.
IP: What are the core benefits provided by the incubator?
LM: We provide a great space to cut overhead costs. We have in-house PR, marketing, and legal teams, but most important, we offer the “BGP Brain.” The BGP Brain is a team of 25 on-site developers focused solely on the needs of our startups.
After the first couple months of incubating various startups, we recognized that many startups often run into scalability hurdles due to lack of specific development experience in the founding team. We built BGP Brain as a project-based hub of talent so that these companies can focus on the bigger picture and not waste valuable time and limited resources on these random, often one-time hires.
Our startups have been using the BGP Brain service over the summer, and thus far it has been a great success in solving a major pain point.
IP: What do you do with the businesses that you reject?
LM: When BGP rejects a business, we give them concrete reasons for why we are not ready to invest. Our hope is that this transparency and constructive criticism will guide them towards that next stage, whether that’s a partnership with us or with other investors and incubators.
How often the companies that you accept are at idea or concept stage, and how often are they with some decent revenue?
Most of our portfolio investments join us with some level of current market validation and a minimum viable product. There are other incubators who invest at the idea stage, but by and large that’s the rare exception to our investment strategy.
IP: How do you define success?
LM: Success is a direct result of practicing greatness, day-in, day-out. We practice greatness and aim for success.
IP: What is the typical return you seek, and over what period?
LM: In a perfect world, every investment would yield at least a tenfold return within a year. As we invest in eight to ten companies every month, we expect that 20% of our investments will yield 80% of our returns. As one of the first investors in NatureBox and their recently announced $8.5 million Series A earlier in the summer, I’d say we’re on the right track.
IP: What’s one particular piece of advice that you would like to give entrepreneurs looking for incubation?
LM: Aside from market validation, show up to your pitch on time! In a world of distributed denial of service (DDoS) attacks and fierce competition, it’s a simple yet very important thing you can do to add validity to your business.
IP: What is the single most important thing incubators can do to help businesses start generating or increase revenues?
LM: Have a solid revenue model, a solid plan to actualize that model, and the right team to implement it. Don’t be afraid to fail, and fail early. Fail until you succeed.