by Marc Pitart, founder and CEO of onlineresume.us
Acceleration and incubation programs are on the rise and have helped start and scale many successful businesses over the past 10 years. There are many different kinds of accelerators – private and public based accelerators, accelerators that take equity, as well as equity free accelerators. The experience of participating in these programs can vary depending on factors such as your work experience and career background, the stage of your company, as well as the industry you are attempting to disrupt. Based on my own experience working for two different startup companies, Keteka and onlineresume.us, I will break down several important pieces of advice in order to help you better navigate the application process, what to do in case you are not accepted, and how to successfully prepare for participation in these kinds of programs.
Before you apply.
Do your research before you apply and read the T&C.
It’s always good to do some background research on the acceleration program as well as the country culture where it is located, previous to submitting your application. My personal advice is to go a step further and research the history of the program or the institution that runs it. Why was it founded?, Who founded it?, What’s their impact?, etc. This will not only inform your application, but if accepted, this is going to help you get on the same page as the staff, as well as be more successful in business meetings outside of the acceleration program.
Some accelerators only accept FinTech or bioTech companies. Do your research on what the industry preferences are for the program at hand. Make sure to read the program’s Terms and Conditions (T&C). You don’t want to land in an accelerator that isn’t right for you. If this happens, the risk of having an unpleasant experience is much higher, as an early stage startup cannot afford 7 months off the correct path. It’s true that some accelerators claim to accept companies from all industries and sometimes they do. However, it is important to check the portfolio of the program and see how many companies from your industry have participated. If there are none, that should raise some doubts, as they may not have the correct resources or relevant contacts for your business. If there are only a few companies within your industry that completed the program, I recommend that you contact one of these startups directly and ask about their experience. On the other hand, if the program’s portfolio demonstrates that they worked with quite a few companies in your field, you are good to go.
Contact accelerator staff.
It is very important to ask the accelerator staff members questions, even during the application process. Follow them on Twitter and/or other forms of social media, in order to find out about Q&A webinars they host or to contact them directly. They are normally very open to answer questions, and may also help you advance through the application process, since they will be more likely to remember you when they evaluate your application.
In case of rejection.
If you get rejected, keep trying!
This might sound a little bit cliché, but when you experience it, you realize it’s actually very true.
By applying and getting rejected, both your application and company will get better. Accelerators normally provide a reason (or list of reasons) why your venture has been rejected. Even though they tend to be somewhat standardized reasons, you can often read between the lines and use this feedback to improve your application or even your startup company altogether. You may actually discover that the reasons why they are rejecting you are the weaknesses in your business.
Getting rejected is not fun, but you really do learn a lot from it. Some people have a difficult time handling rejection. Believe me; I’ve been there. Some applicants may get even more frustrated when they see that some companies that were accepted, are in their eyes, less valuable than their company. Maybe they are right, but the truth of the matter is that even though you haven’t seen the other companies’ applications, they were probably stronger than yours. So, my advice is for you to stop complaining and take action. Analyze the reasons you were rejected and improve your application and/or company based on the constructive feedback.
Real-life rejection reason examples.
To give you a practical example, I’d like to analyze the reasons why my startup was rejected from participating in Start-Up Chile’s Generation 17.
Here are two of the reasons we were not accepted:
- The market strategy is not clear. More research and explanation is needed to understand how the business plan will be executed.
- More metrics need to be identified such as product testing, market validation, and/or customer validation in order to show that a market opportunity exists.
Reasons for rejection analyzed + tips.
Focusing on the first reason for rejection, it is important to take into account that it is often hard to see things from another perspective, outside of your own point of view. The market strategy made complete sense to me and my team members. We had designed it and we were executing it. Of course it made sense to us. It doesn’t only have to make sense to you and your team, it has to be comprehensive to everybody that you pitch it to. We learned that we weren’t communicating our market strategy in a way that made sense to those outside of our company and specific industry. We needed to improve how we communicated this strategy to others.
Try to comprehensively communicate your market strategy in a way that makes sense to everyone, including people outside of your company and specific business industry. A good way to test whether you are communicating your strategy successfully is by pitching it to someone outside of your field. Pitch it to someone with a startup or business related background, but who doesn’t have experience in your industry. If they understand your strategy, then it is more likely that those who analyze your application will also understand it.
Our business model back then was very complex, and it included a B2C as well as a B2B business model, that wasn’t being implemented yet. It was all hypothetical. We needed to be more specific. For example, in terms of the B2C plan we needed to provide more details on the markets we were addressing and the channels we were using to tackle them. Regarding the B2B model, we had to start reaching out to prospects to get feedback and this actually helped us shape our B2B product. In turn, this allowed us to describe it with greater detail and knowledge in our next application. From our research we knew Start-Up Chile was keen to B2B startups, so we didn’t want to dismiss this business model and just focus on our B2C business model. We actually had to develop it a little bit more, not only be able to explain it better. We came to this realization by better understanding what our B2B clients needed.
Don’t describe a 100% theoretical business model. Make sure to talk to clients and offer them your product before you define your business model. It probably needs some tweaking and by talking to your clientele you will more easily discover necessary changes that should be made before applying to an accelerator program. The best thing is that you get helpful insight for free!
In terms of the second reason for rejection, this feedback was particularly painful for us as a team, since we had a ton of metrics that, from our point of view, were good enough to validate our company’s market opportunity. For example, 30,000 free users had created a resume using our service, we were having 10,000 organic sessions per month and 20% of them where finishing a resume. Yet, we were predicting that 1% of our visitors were going to convert to our premium account, which was undergoing development at the time. Not only was that an inaccurate estimate, but the real number of conversions, after developing the premium account, ultimately ended up being much higher. We were basically selling ourselves short, because we didn’t have the tool ready in order to evaluate the real number of conversions. Thus, we decided to invest in the completion of features included within our premium account and incorporate the number of real paid accounts in the next application. In addition, we already had some really great quotes from our free users, so in the next application we included them in the application video.
Invest in the completion of features that are needed in order to accurately identify business metrics such as product testing, market validation, and/or customer validation. This will make your company a better candidate for the accelerator because you will more successfully demonstrate its market opportunity.
Make full use of your current client/user feedback. Include their positive reactions to your business, product, and/or service somewhere in your application – especially if there is a required application video or presentation.
The point here is to consider which of the reasons for rejection are actually valid. If you find the criticism to be true, analyze and improve your application and/or product based on this feedback. In the end, the only other options are to keep applying without making any changes and improvements, or to give up. Neither of which makes any sense. If my team members and I hadn’t made some of these necessary changes or had simply stopped applying to Start-Up Chile after the second application, we would have never gotten in to the program and we certainly wouldn’t be where we are today.
After you are accepted.
Congratulations, you made it! Now what? Sit down and wait until the program starts? Just wait for the money to flow in and then start spending it on the execution of your business plan?
Come on! You can do better than that and if you do, the investment of the program is going to be worth twice as much.
Read the T&C 5 times and start preparing.
Once you have been accepted read the Terms and Conditions again and:
- Plan your expenses (even before they ask you to) and make sure they align with the expenses that the program allows.
- Plan your cash flow cycles. There are programs that give you all the money in advance, while others work with reimbursement. So, it’s very important to plan your cycles.
- Add every deadline to your calendar and take advantage of the materials provided. For example, Start-Up Chile accepts very big cohorts of up to 100 startups, yet their staff is no more than 15 people, so they do a great job with the “soft-landing.” In other words, they make a big effort to prepare the startups before arriving to Chile by providing a handbook guide and a calendar to complement the T&C document.
- Again, talk to alumni and staff and plan your arrival. Regarding accommodation, I totally recommend figuring it out before the program starts or even before you get there. Use long-term rental sites, but always check local real estate agencies to compare prices so you don’t overpay. Otherwise, you are going to be searching for a place to stay at the same time that your fellow founders are, so there will be less offers. Plus, it can be extra stressful to be in the beginning process of the program while also having to search for a place to live.
Be a hustler, even if you aren’t one.
Some accelerator programs or incubators accept bigger cohorts than others, so the following information may be different for accelerators with small cohorts. However, based on my experience participating in an accelerator with large cohorts, you have to really take advantage of the opportunities that they provide, especially in terms of networking and mentoring. If you don’t, they are not going to pressure you to do so. These incubators have so many companies to keep track of, so you need to be independent and take initiative in making your best effort to utilize the resources available to you.
If the mentors are not assigned by the program and you actually have the opportunity to choose your own, make sure to do your due diligence first. Research your options and pick the right mentor according to your market and industry.
It is not necessary that you pick a large number of mentors. In fact, you can still meet up with many mentor candidates without them actually being your advisor. I recommend picking a select few to be your official mentors, but still sitting down to chat with the other options. Even if they aren’t your direct mentor, they might connect you with prospects or give you good ideas.
Networking & Connections.
Accelerators are all about networks, and being a part of one gives you access to people that you wouldn’t be able to reach or that would take you a lot of time to do so otherwise. Again, take advantage of this and ask for as many connections as you can. For B2B businesses, being part of an accelerator is like being handed a golden book of prospects. Yet, keep in mind that it’s all up to you. You have to actually ask for connections and check for updates in the connection lists. Nobody is going to tell you who to connect with.
Another amazing opportunity of participating in an accelerator program are the perks that they give you access to. Of course, this depends on the program, but most accelerators partner up with big corporations to provide perks to help their portfolio startups get started and scale. Some examples include AWS credits, discounts on payment getaway platforms like Stripe or Paypal, mass email marketing platforms like SendGrid, airline flight miles, etc. Remember, you are responsible for checking your benefits by reading the T&C and identifying the ones that could best serve you, as well as subsequently applying for them. The accelerator staff will help you if you ask, but you have to ask. Otherwise, they may not just freely offer assistance.
Be ready to receive constructive criticism, yet stick to your vision.
It seems contradictory, right? Participating in acceleration programs both as a founder and as an employee has taught me that it isn’t a contradiction. It’s a balance.
Some accelerators simulate board situations. This is a huge opportunity for startups that, like ours, don’t have a board, as it prepares you for if and when you have one in the future. At the same time, as I’ve seen in our case, as well in that of most of my fellow founders, it can present challenges. The biggest obstacle, by far, is taking constructive feedback without letting it affect your mood and motivation.
Unfortunately, there isn’t a magic checklist that exists in order for you to be able to identify good advice from bad advice. It often comes down to your gut feeling. I’ve learned that you have to train yourself to be able to take criticism that can be painful and oftentimes very hard to hear, especially when you are caught in the middle of your startup’s day-to-day scaling process.
It is important to ∫. At the same time, if you recognize that the feedback actually interferes with your company vision, then you have to be able to ∫. Thus, I encourage you to ask yourself the following questions when given feedback:
- Is the feedback coming from somebody in my industry? What’s their background? Have they worked in multiple businesses/startups? This takes time and you will have to investigate it.
- Is the feedback based on an opinion or does it come with data and/or real-life cases to back it up?
- Is there valid data or advice that indicates the opposite, or is it just your gut?
If 2 out of the 3 above mentioned questions apply, this indicates that there may be a valid case for the feedback given. In this case, even if it’s hard to hear, my advice is to take it. Be open minded, explore it, and most importantly, don’t take it personally. Feedback is meant to help you grow.
If after answering the above mentioned questions with honesty and objectivity, everything indicates that the feedback is wrong, politely move on. You can explain why you are not going to incorporate the feedback, putting a special emphasis on your arguments based on the third point. Never mention or discuss the first point; unfortunately, it won’t get you anywhere.
These tips have helped me and my team to take advantage of the Start-Up Chile program, open new business models, and understand our diverse clientele wants and needs. This has essentially lead to the tripling of our revenue in just one month’s time, as well as the increase of our CR by 5 times the initial rate. By taking this advice into account, you will be better prepared to navigate your own company when applying and participating in an accelerator program.
Marc Pitart is the founder and CEO of onlineresume.us, an online resume builder that empowers talented job hunters to rev-up their career profile by enhancing their overall application. Marc has a background in online marketing, with a focus in SEO and SEM. He has worked with various startups, such as the award-winning tours and activities marketplace, keteka.com.