The Accelerator Conundrum: Navigating Your Path to Startup Success

The Accelerator Conundrum is a multipart series that challenges the prevailing wisdom of the tech startup ecosystem that entrepreneurs should Blitzscale out of the gate. Written by Sramana Mitra, the Founder and CEO of One Million by One Million (1Mby1M), the world’s first global virtual accelerator, it emphatically argues that a better strategy is to Bootstrap First, Raise Money Later, focus on customers, revenues and profits. 1Mby1M’s mission is to help a Million entrepreneurs reach a million dollars in annual revenue and beyond. Sramana’s Digital Mind AI Mentor virtually mentors entrepreneurs around the world in 57 languages. Try it out!

Alright, let’s cut through the noise and get to the brutal truth of the startup accelerator world. Many entrepreneurs, starry-eyed and naive, leap headfirst into 3-month accelerator programs without truly understanding the long-term implications. It’s time for an incisive commentary, a necessary dissection.

1Mby1M Udemy Courses with Sramana Mitra: Financing

Raising money to build a startup is a huge challenge. To be able to raise any money at all, you must first understand how investors think. We have developed the following courses catering to entrepreneurs in different stages of their entrepreneurial journey.

The Million Dollar Club: Mansa Systems

San Francisco-based Mansa Systems, led by founder Siva Devaki, is one of them. Mansa provides cloud, mobile, and social enterprise solutions, including cloud storage, secure document sharing, cloud telephony and more. In order to differentiate the firm from its competitors, Siva initially focused on Salesforce CRM, partnering with the company to build apps for Salesforce customers and publish them via AppExchange. Today, the company provides both products and services that extend the Salesforce CRM capabilities.

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The Million Dollar Club: Sapience Analytics

Another Pune, India company, Sapience Analytics, is the creator of an enterprise class solution designed to increase productivity and create ‘automated work visibility’ across the enterprise hierarchy – with no added managerial responsibility.

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The Million Dollar Club: IndiaCakes

Also in the Million Dollar Club is IndiaCakes, an online cake delivery shop based in Pune. Founder Manit Nagrani started off by observing that Indians around the world would like to celebrate their loved ones at home on special occasions by sending them cakes.

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The Million Dollar Club: MMIS

Portsmouth, New Hampshire-based MMIS develops and markets software products for secure collaboration and compliance for healthcare and pharmaceutical businesses. Founder Michaeline Daboul has shepherded the company through significant pivots to arrive at a value proposition that customers are resonating with.

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The Million Dollar Club: Orangescape

Chennai, India-based Orangescape, a platform-as-a-service (PaaS) company, has reached its million-dollar mark by catering primarily to large enterprises trying to move out of Lotus Notes to Google. Co-founders Suresh Sambandam and Mani Doraisamy spotted a gap in Google’s App Engine and over the last couple of years, successfully plugged it for many large customers.

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The Million Dollar Club: iFood.tv

It was 2006, and Vikrant Mathur and Alok Ranjan were learning how to cook. After seeking out advice from every cooking website they knew, they found that text-based sites were lacking in their instructional capabilities. No resources existed that incorporated visual elements or a means to reach out to recipe authors with any questions. The two decided to take matters into their own hands.

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The Million Dollar Club: Introduction

If you haven’t already, please study our free Bootstrapping course.

I had two conversations last week, each of which reinforces a simple phenomenon that I have constantly emphasized over the last five years in my writings.

On Wednesday, I had lunch with Brian Jacobs, General Partner at Emergence Capital. We were discussing our respective startup portfolios, and Brian mentioned that his firm’s preferred stage for investment is when a company has about a million dollars in revenues. Presumably, at that point, the experimentation with product, business model, pricing model, customer acquisition strategy, cost of conversion, and other key issues have settled down. That means, a cash infusion of, say, $7 million will result in a somewhat predictable set of outcomes. Most importantly, the fresh cash would accelerate customer acquisition, and hence revenues.

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Series A Crunch: How 1M/1M Can Help

If you have the stomach for it, the metal to carry on, the energy to bootstrap to a point where either you CAN get funded, or generate enough revenues and become profitable, we can help.

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Series A Crunch: Bootstrapping Works

Just because you have been rejected by VCs doesn’t mean you cannot build a great business.

Marc Benioff was rejected by pretty much ALL the VCs he approached. Didn’t stop him from building Salesforce.com into a multi billion dollar enterprise with global impact.

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Series A Crunch: Forget Freemium

What is your business model? Do you have one, or is it TBD?

Is it Freemium?

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Series A Crunch: Obsession With Exit

Do you know the difference between a business model and an exit strategy?

Are you building a business that has a real, viable business model?

Or are you trying to do an Instagram?

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Series A Crunch: Tyranny of the TAM

What is TAM? Perhaps, the biggest factor in whether a VC funds you or not. TAM = Total Available Market.

Note: Top Down TAM doesn’t matter. You need to present a Bottom-Up TAM Analysis.

And to get funded, that TAM needs to be very large. Billion. Two billion. Ten billion.

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Series A Crunch: Revenue vs. Equity

Do you understand the impact of infusing cash into your business? You do, right?

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Series A Crunch: Customers vs. Investors

What have you been doing for the last six months? Chasing customers? Chasing Investors?

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Series A Crunch: Real vs. Pseudo Entrepreneurs

Much is being said on a daily basis about the Series A crunch. This is our series on the subject. In short, byte-sized posts, I will give you my thoughts on how to deal with the issue. Please note, this advice is entirely for entrepreneurs, not investors.

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