Further to my earlier post, Mentoring Startups: 10 Lessons We Have Learned, I want to also go over our learnings through running, what is today, the world’s only global virtual incubation program.
1. Reach & Scalability: We have successfully created a virtual incubation program that entrepreneurs all over the world are using. The self-service curriculum is quite rich now, which makes the program scalable. Also, the online mentoring roundtables have been extremely productive, as discussed in the earlier post. We’re also running an active content organization that helps our portfolio companies get coverage, as well as distribution for their messages through social media (reach over 100k currently).
2. Inclusive vs. Exclusive: We have successfully reset the definition of entrepreneurship within the program from Entrepreneurship = Financing to Entrepreneurship = (Customers + Revenues + Profits), Financing and Exit are optional. This has enabled us to be inclusive, as opposed to exclusive. Unlike YCombinator that takes pride in how many entrepreneurs they reject, we take pride in the fact that we do not reject anybody. Over 99% of entrepreneurs seeking financing get rejected. We work with ‘The Other 99%’ irrespective of their fundability, helping them grow to become successful businesses, and to raise financing if appropriate. Also, you don’t have to move to Silicon Valley to get incubated with us, which also gives us tremendous flexibility on whom we can work with.
3. Silicon Valley Bridge: HQ’ed in Silicon Valley, right off Sand Hill Road, we’re deeply networked into the Valley, and also intimately familiar with the Valley’s methodology. We follow the best practices of building businesses, but consciously break the norm of being obsessed with financing – something we consider a fatal flaw in the system.
4. Duration: Incubators around the world are running 3-month programs. This, in our view, is not sufficient time to accomplish much. We have a program that runs on an annual membership basis, and entrepreneurs can renew their membership, continue to use the program for as long as they see fit. We launched in Dec 2010, and we do have entrepreneurs who are in their third year of the program. As such, we can really see the trajectory of a startup, and help over the longer term. It takes time to get to $1M in revenue, especially if you are bootstrapping.
5. Business Model: We do not take equity. Entrepreneurs are slowly waking up to the fact that equity is not free, and giving up 5-10% equity for $15k-$25k in funding is not exactly a great deal. We charge $1000 annual membership fee and our ROI calculation suggests that we offer $375k + 5-10% equity worth of value to those who use the program well. We believe, to do true incubation, you need to decouple equity / investment and incubation, or else, incubators will try to come to the rescue of victory as they do now.
6. Working with Co-working Spaces: We do not offer any physical co-working space. This makes it very easy for us to partner with other co-working spaces through our Incubator-in-a-Box program. At scale, we would love to have a large string of such partnerships all around the world. We are working on some already, and will expand the network in due course. If you want to partner, please do reach out.
7. Working with other Incubators and EDOs: We do not consider any other physical incubator, accelerator or EDO competitive. We work with many of them as partners, and hope to work with more. Out of the over 7500 incubators in the world, most fail. Wherever you are, if you wish to use 1M/1M as a supplemental program to your existing offerings and enhance the quality of your program, please feel free to do so. We can help you succeed. In particular, we know that most incubators around the world are looking for a strong tie into Silicon Valley. More here: Incubators | Accelerators | EDOs. We also have an affiliate program that some of our partner use.
8. Working with Corporations: We’re working with many major corporations on their corporate incubation programs, both internal (intrapreneurship) and external (partner eco-systems). You will find a lot more details here: Technology Companies | Media Companies | Platform Vendors | Internal Innovation and Intrapreneurship.
9. Platform for Investors: There are major disruptions under way in the VC / Angel universe. More and more, we’re hearing from VCs and Angels that they need to create ‘platforms’ – not just money, but an extended portfolio of services that help entrepreneurs succeed. Well, 1M/1M is happy to be your platform partner. More here: Angel Investors | Venture Capitalists.
10. Working with Academia: Education is getting disrupted by technology in a big way. Deans of Engineering at large universities are looking for scalable ways of imparting entrepreneurship education to their entire base of engineering students. Liberal Arts colleges are rethinking their curriculums, and both programming and entrepreneurship are under consideration as required subjects. Community Colleges are trying to roll out effective entrepreneurship programs. But how to deliver on the promise of teaching entrepreneurship to large students bodies without breaking the bank, without making education even more expensive, while preserving a certain level of quality? Well, 1M/1M can help.
I could go on and highlight another 50 things we’ve learned, but for now, these offer a good snapshot.