iAccelerator

As part of the 4 month Program, we had Mr. Parag Shah with us, as a technical Mentor with the iAccelerator teams. Last year, Freeman had played this role and this year, Freeman had graduated into a Partner with iAccelerator, investing with companies at the same time, mentoring them on business strategies etc.

Parag took a sabbatical from his consulting work to assist the teams in Ahmedabad. This break also helped him conceptualize his own product and do his own thing in the free time.

He departed for Pune about a month ago to launch the Participatory Learning Project which matured in the 3 months of his being in Ahmedabad.

He shares his Experience of being at iAccelerator here.

One of the ‘innovation’ which took place at iAccelerator was the initiation of Internships for college students with the Teams part of the Program. Most of companies here have hired interns for the duration of the program, some interns have already gone back to their cities to continue studying or take up a full time job with another company.

Kumar Abhishek was one such person, who came to Ahmedabad from Bangalore to Intern with Aplopio, a company building a Semantic Search Engine for Hiring Managers and Staffing Agencies.

He was involved in the core technology work for building this Engine and has obliged to send us a small note, sharing his experience working with the team at iAccelerator.

“I had my internship with a startup company Aplopio, a company being incubated at the Centre for Innovation Incubation and Entrepreneurship [CIIE] as part of the iAccelerator Program. I worked there for about one and a half months. The most appealing thing about the internship was the work that I had to do. It is a very interesting thing to work for a product right from scratch, for a company. I learnt new programming languages and a new web framework. I got a real exposure to the core corporate development work which I always wanted when I was in college. Other supporting factor was the environment, the people around me. Almost all of them had quite a lot of industry experience and were technology geeks. All had a fair amount of knowledge of their work areas. It was really an enjoyable experience being with such people and I was learning things all the time, whether I was writing code or just listening to them discus their future plans.

Moreover the air conditioned office and high speed internet was another factor which kept people working all the time. Even I used to work late nights learning more and more things. Those months proved to be more than a year for me in terms of learning experience and the kind of exposure I got.

All in all, it was a nice time being with them and I had a real learning experience. Hats off to the Centre for coming up with such a nice program called iAccelerator for internet and mobile based startups”

Some of the companies are still looking at hiring interns and full time employees. Please do get in touch with us on info@iaccelerator.org in case this is something which would excite you and you would like to work with one of the portfolio companies around the country.

We are open to hiring interns for our next batch, which starts from the 1^st of December in Bangalore and the Internship positions will be updated on the Jobs Section of the iAccelerator Site.

If this does excite you, please do come back and have a look at the upcoming opportunities with our Portfolio Companies.

We received a mail recently asking for more specific examples of how we helped startups. I feel the response is of general interest so I am posting it here.

…

We work with teams of entrepreneurs to help them get established. This includes investing a small amount of money (upto 5 Lakh) to help them cover their costs during this initial period before they have a product or are able to raise investment money from traditional sources. The kind of help we provide tends to vary depending on the startup.

For example, we have one startup which is very senior and has developed a product in the business intelligence space. We have been working with him to identify those areas where he needs to focus his energies as we develop a go to market strategy. During this process we are introducing him to potential partners and clients who can help give feedback on the features we need and may be able to sell his products into markets he wouldn’t be able to reach on his own.

Another company already has a product in market which earns revenue. We found them a mentor & investor who got really involved in the company helping them understand how they can better monetize their existing userbase.

A third company we work with is made up of extremely smart and passionate people who recently graduated from University. With them we have spent time ensuring that they have good operating practices in place including project management, issue tracking, and source control
management.

Perhaps our most valuable contribution so far has been to create a very positive work environment and connect teams with other smart energetic people creating their own technology startup companies. We have found that more than the top down mentorship we explicitly provide, people learn from their peer group. For instance, on arriving, only one of our teams was hosting their web service on a grid computing platform (Amazon’s EC2). During our program they helped other teams make this transition and now we have 5 teams hosted in the cloud.

Thanks for asking these questions. If you have further
questions or want more clarity on any aspect of the program, please ask. Its helpful for us as well.

During a course of a Program, the participants sometimes find their calling and head off in that direction to fulfill their dreams. Sankar, a participant of iAccelerator, recently moved on to Bangalore to take his dreams forward. Bangalore was much more comfortable for him to work from, since he’s lived there for long.

Sankar was working as a Technical Lead with TCS and moved to Ahmedabad with his business partner, Selvan, to start a company called BitStat, an app for analyzing huge chunks of data.

His thoughts about the program:

” I feel iAccelerator is the complete knowledge repository for an entrepreneur. It was great for me to be part of the CIIE’s iAccelerator program. iAccelerator had taken my vision of the entrepreneurship to the next level. The presences of the in house mentors/investors like Freeman, in the iAccelerator team are a great motivation for the entrepreneurs.

iAccelerator is a rapid course for each entrepreneur, we are able to gain the required knowledge in a small learning curve; the assistance from iAccelerator starts from providing necessary information to setting up the required infrastructure for building a successful company. These consist of the legalities for the company, mentorship,
visiting high profiled guests and investors add a huge value for the teams incubated.

We had a lot of fun between the teams and it was a homely environment. Technical collaboration between the teams helped us to gather diverse opinion. It was fun to see the iAccelerator teams IPL Cricket matches. I had an excellent time learning and practicing yoga with Freeman our angel investor.”

We wish Sankar all the very best with his future endeavors, here’s to a fresh start..

It is great to see the growth of interest in entrepreneurship in India. Some people give the credit to the downturn, but I truly feel its more fundamental than people not wanting to write ‘unemployed’ in front of their name.

There are various startup events I attended recently, like proto, headstart and silicon india. It is great to see the amount of enthusiasm in these and the kind of networking platform these events provide. While the organisors of these events are doing great task, I feel the responsibility of productive networking lies with the people attending these events.

I have come accross quite a few experts who are a bit irritated by the fact that they spent one hour of their precious time mentoring a startup which later vanished and the mentor doesnt know what they are upto now. Worse still, he hears from people all around on the updates on this startup which he had felt a ‘personal’ bond with. On the other hand, I have met even more startups who find engaging a mentor or a probable investor to be a big effort. While their first call had gone well, you call the same person after 3 months and you feel alien.

Recently, we sent out a suggestion to our startups in iAccelerator program to get around this problem. The idea is to create a mail list to which you send a regular update. Put all these people in BCC and send them a mail once in 1-3 months depending on your pace of giving out such info.

I recently got the following email from one of the startups I had met two months ago (edited to keep privacy):

————–
Sub: Update on XYX
Hi,
We felt like sharing with you an update on what we have been upto at
XYZ and the interesting developments happening here.

1) We have received the technical approval for XTSY Product from DDRFD Organisation.
2) We have signed an agreement with Tata Nano and have received the first PO as well. (BBSBD Product)
3) We have received the confirmation of a pilot with Reliance in August. (BBSBD Product)
4) Speaking to a top car manufacturer for OE. (Further details cannot be disclosed at this time on their request)

Thanks
[Promoter Name]
Contact Details
———–

I feel that this is a simple way to keep people informed and get them to feel that ‘their company’ is doing interesting stuff. This is not intended to be as complicated as newsletter. I feel newsletters are much more of an effort and also seem less personal. A simple email like above works fine.

Apart from this, we feel there are a few simple hygenic points that one could follow to make the conversations easier:

1. Don’t just pick up the phone and call. It could be a good idea to drop an SMS first.

2. Suggested content of SMS

a. ‘Hello/Hi’

b. ‘We had met at —-’, or ‘MrBond had introduced us’

c. ‘We are facing a few problems with —-. While we have some ideas, we felt you could guide us better’ or ‘Looking forward to 10mins to discuss —-’

d. Ask for appropriate time. (please please dont ask the other person to call you!)

e. You name. eg, ‘pranay@iaccelerator’ (dont assume the person remembers you and has your number saved)

Ofcourse, this is not a DoT certified SMS bound to get you a response. The content will definitely change on the basis of your prior interaction with the reciever.

3. It is ok to send a followup mail after the first mail. Though, ideally, not within a day (unless it is an emergency). It is not good to send 6 followup mails for the same mail. If the first followup mail gets no response too, wait for some time and then get creative, find a better excuse to get in touch (some new development, some common person you met etc) and then try again. Sometimes, if the other person doesnt respond, it is fine to give up. He/She will probably not help much if he is trying to stay away from you.

Basically, i feel there are two ways one can look at the concept of network.

a. One is ‘Work on the net’. Get onto facebook, twitter & linkedin and just connect to people.

b. Do something such that in the end, the is some ‘ net (positive) work’ you have done.

I somehow prefer the latter view. Even if all that the ‘net positive work’ means is talking to some interesting people and learning new things.

Pranay

Antony Brydon wrote a nice piece yesterday about how they maintained an up-to-date folder of all the documents lawyers would need when doing due diligence during a financing round or acquisition when he was working at Visible Path.  In the post he includes a checklist of documents lawyers look for when they do their diligence and makes the point that, “The diligence that they do is less about checking every single document and more about getting an overall confidence level that the company is competently handling it’s legal, financial and governance issues.”

The Due Diligence Is No Mystery article on about.com quotes a PE guy saying, “Our goal [with the diligence process] is to feel 100% confident that the team is capable of building exceptional products-now and in the future.”  To do this they do personal interviews and spend time evaluating process:

I wish we could just reverse engineer the diligence process to ramp up the startup factory.  Maybe we can make our teams more palatable to potential investors & partners by encouraging them to maintain documents. But while I’d like a reputation in the investor community for producing well formed companies,  I don’t want a reputation in the entrepreneurial community for forcing beauracracy

“If you want to build a ship, don’t drum up the men to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea.” Antoine de Saint-Exupéry via Marc Hedlund

That has been a favorite quote of mine since I read it on Marc’s blog a couple of years ago. I’ve known Marc since his days with Popular Power. When he and my college friend Jason Knight founded WeSabe I came in as a small angel investor.

Marc has also been a guest speaker at the YCombinator weekly meetings, and as I’m preparing for the teams coming in to the iAccelerator, I called him this morning to ask for some advice on how he has dealt with startups, and his recommendations for me.

Some VC running a venture training program at Stanford said that most of what he does is pick teams and place bets. They add value by making connections, and getting involved a bit. But, they’re very explicitly not trying to run the companies. Marc told me this when I asked how to train teams to run board meetings. Marc’s main point was that the information founders share with investors at a board meeting should be the same information they already collect just to run their company. “What do we really need to know about our business to know if we’re succeeding or failing”

Much of Marc’s advice felt like this. When I asked whether he recommended having teams give tech talks he said that he had tried it a couple of times at different startups with varying results. The first time an engineer suggested it and the culture embraced it. Another time he mandated it, and the team rejected it. Asked whether I should train people in a specific development methodology such as Agile, he recommended that instead I bring people in to talk about their experience with different development practices and help teams evolve one that fits them. On whether there were standard tools all teams should use he mentioned that at WeSabe they use CampFire extensively for company collaboration, but they’ve tried BaseCamp a few times and hadn’t really got traction with it until recently.

Ultimately, Marc’s advice comes down to ‘listen’ understand whats actually happening, collect and present information. Advocate rather than mandate the changes you want to see.

Sometimes I describe my vision for the iAccelerator as a ‘Startup Factory’ where all the companies coming thru abide by ’standard’ processes and use common tools. I imagine multi-colored story cards marching accross Kanban boards behind each of our teams. And that we’re all using Salesforce, Basecamp, Trac, Git / SVN, etc. which allows teams to track their own progress, and us as external stakeholders to quickly and uniformly monitor the different companies we’re engaged with. The combination of all these things gives us a consistent brand of what it means to be an iAccelerator team.

And honestly, I feel there maybe times when this is appropriate. But, Marc and the VC seem to argue heavily in the direction of picking really great people and then giving them the latitude to express their brilliance in the ways which are comfortable for them.

From this quote on the YCombinator ‘about‘ page, it seems Paul Graham takes this position too.

We try to interfere as little as possible in the startups we fund. We don’t want board seats, rights to participate in future rounds, vetoes over strategic decisions, or any of the other powers investors sometimes require. We offer lots of advice, but we can’t force anyone to take it. We realize that independence is one of the reasons people want to start startups in the first place. And frankly, it’s also one of the reasons startups succeed. Investors who try to control the companies they fund often end up destroying them.

Comment

Parag Shah a technical mentor for the iAccelerator made the following comment on my blog.

Hi Freeman,

I agree with the “no interference” policy. However, would it be also incorrect to mandate that the teams use some project management tool, some vcs, some code reviews, some continuous build system, and then let them decide which one and how to deploy it.

–
Parag 

Here is what I would like the iAccelerator brand to stand for:

Technical Excellence – Current tools, appreciation for code quality, members of the development community

Customer Service – Responsive to customer / user feedback, excellent technical support, active blogging and vertical community participation

Culture – Interesting inteligent confident respectful people, Fun and supportive work environment, Dedicated, Responsible, Relaxed, Open communication, Committed to the personal and professional development of its people

Compliance – Legal structures properly set up, Clean Contracts with no surprises, Accounts in order

—

These are some of the areas we will need to focus on to realize the above goals :

Training
Process
Use of Technology
Transparency
People

Back in San Francisco I’ve been talking with a friend here working in a startup that doesn’t want funding. Self funding means that the whole company is crammed into one guys apartment and they’re all biding time living on savings until the product revenues start coming in. Its a close group of friends who’ve worked together at various companies for years. Working together now on their startup without investors or board members pressuring people to do more faster, means they can pursue a more natural pace.

There are aspects of the business they know they’ll need to get to, but they can spend time with their initial customers and make sure the product is solid before developing additional features or launching into rapid expansion. Not having money forces a real clarity only making purchases which are absolutely necessary. The whole exercise has a certain intellectual honesty as there’s no one to convince of anything, there are no sides, the team is together.

My friend says its a nice environment. Sorta family style. Everyone likes hanging out together, and they write software while they do.

There’s an aspect of this I feel it will be important to carry into the iAccelerator. I have posted a couple times about fund raising. As importantly I will be encouraging teams to be frugal. By being frugal and looking for money early from customers or investors we can avoid running out of money becoming a life threatening situation adding stress to the work situation.

I believe intelligent individuals focused on real customer needs with time and awareness will develop products which solve real problems people are willing to pay for. It just takes time, so making sure the experience is enjoyable, is critical.

With the iAccelerator program, we are basically acting as micro VCs. As with all the little people you read about in childrens stories micro VCs need to deal with the same issues as big VCs though sometimes things are alittle different because the scale is so much smaller.

Understanding how to exit a company is probably a VCs biggest challenge. This is where they (we) get paid. I like to describe us as something of a startup factory. We take talented engineers and entrepreneurs as our raw materials, apply heat, money and process during incubation and turn out well formed technology companies with innovative IP in growing markets.  Great.  But we don’t get an ROI until someone decides to pay us for the equity we took for our time and money. Not coincidently, generally the founders get paid at the same time, so our interests are aligned.

The most common pay day comes in the form of an acquisition. People generally say, ‘don’t start a company to get acquired’ which I believe in. At the same time I think its useful to understand the factors that will influence an acquisition as well as the valuation.

- Team:  Small tech companies are often evaluated primarily on the strength of their team with an emphasis on their engineering abilities. Good management, marketing and customer service are all pluses as well.  Especially in areas where new technology is involved with a small number of experts, acquiring a company with a proven track record in this area may be significantly faster and less risky than trying to set up a company and hire these people individually. 

- Channel: Similarly, in a rapidly growing market, a significant premium may be placed on companies which have already established market presence and a sales channel. The effort a team puts into becoming well known and developing a solid reputation with its customers, will also help to connect them with larger partners who may be interested in doing strategic investments or an acquisition. This is especially valid for very early stage startups who invest in their public presence thru inteligent writing on their blog and participation in community forums of interest to their market sector. 

- Revenue: This is the easiest to think about (x times revenue)

- Ip: Has the company developed any unique technology that would be hard to reproduce. Extra points for patents. 

There are other exits as well. The IPO is the holy grail. And businesses that become very service oriented may pay dividends or do stock buybacks, but acquisitions are the bread and butter of the (micro) VC business.