This is part 2 of a 3 part series on Virtual Accelerators for startup founder’s and entrepreneurs.
Part 2 — The Fog of War
So. what happens during the typical 12 week Virtual Accelerator program?
Don’t be fooled. A virtual accelerator program is more intense than you might expect. It will take more work and more time than you planned — particularly if your startup is already operating with customers.
For startup entrepreneurs, participating in a virtual accelerator program is like taking a college course while having a full time job.
There are weekly lessons, weekly assignments and deadlines — with guest speakers, special workshops and seminars in between. And then there’s a final pitch at the end — very much like a term project.
Out of the Gate
Before the virtual accelerator starts, or during the very first “introduction” week, you’ll have to explain your idea — the problem you’re solving and the solution — along with other key aspects of your startup.
Prepare to be questioned. Prepare to be challenged. Prepare to be misunderstood. Prepare to feel very uncomfortable, and prepare to change. No entrepreneur likes having experts scrutinize and critique their idea and their company. It’s like watching your children get dismembered.
Learning to impart the value of your idea and company is one of the main outcomes of the program. Many entrepreneurs enter the virtual accelerator thinking they already articulate idea pretty clearly. Odds are high that the mentors and coaches won’t “get it” — either because your elevator pitch not as clear as you think, or because the idea, the market or the problem are not as compelling as you think.
Articulating your startup’s value proposition in one sentence or a single paragraph elevator pitch is a grueling exercise — one that you’ll revisit again and again throughout the program.
During the virtual accelerator, you’ll have to revise, iterate, and in some cases make some radical changes to fundamental aspects of your startup. Read that again. You’ll have to make some difficult changes. Yes, this applies to you.
WEEKLY CADENCE
Each week’s topic (or lesson) focuses on some aspect of preparing your venture for growth, scaling, and preparing to be more attractive for customers, and attractive for investors.
Coaches, mentors, and instructors will present a lesson about the week’s topic. Most virtual accelerators follow a Lean Startup-like curriculum, or a Business Model Canvas framework. Weekly lessons and assignments will cover many or most of the following topics:
- Refining the precise problem or opportunity you’re startup is addressing.
- Refining your solution (product or service), value-proposition, and product roadmap.
- Finding and demonstrating product market fit (PMF)
- Defining the market size(s): TAM, SAM and SOM.
- Defining the competitive landscape and competition.
- Refining your go-to-market strategy.
- Developing and validating the business model, your KPIs, and Financials.
- Developing the team, management and staffing plan.
- Scaling and Growth strategies
- Refining the funding plan, and funding request.
- Creating and presenting the final “pitch deck” to investors
Each week, you’ll have a hands-on assignment to apply the lesson to your startup — with a required deliverable, due the following week. It’s the equivalent of working on a weekly assignment from a top university, in both cadence and difficulty.
Speed Bumps
A few notes on a some typical areas where many new founders get tripped up:
1 — Market Definition. Market Size
Mentor/Coaches will want you to hone your market size definitions, TAM, SAM, SOM — the Total Available Market, Serviceable Available Market, and Serviceable Obtainable Market. This is a tough task and most founders haven’t thought that much about it. And while it seems like an academic exercise, getting this right is important for investors: It provides evidence of the larger opportunity, also demonstrates the credibility of the founders.
2 — Go-to-Market Strategy
Until they are forced to develop the go-to-market plan, most founders have a casual approach. Generally this is about demonstrating that you’ve put a lot of thought into how you’re going to reach customers, and sell to them. It shows investors that you know exactly who the customer are, how to find them, how to reach them, how they make decisions, and how to you’ll get them to buy your product.
3 — Competition
And then there’s the competition, This is not merely “who else has a product like yours”, it is demonstrating that you understand all the other alternatives to solving the customer’s problem today, and in the near future. Then it’s illustrating how your your solution is superior — and how you will thrive and scale as the competitive landscape changes.
4- Financials, Projections & KPIs
Some are numbers-people and some are not. If you’re a founder then you will need to become a numbers person — numbers obsessed — if you’re going to succeed. Get better at spreadsheets.
But, unless you’ve been actually operating for a year, everyone understands that your financials are just projections based on assumptions and best guesses.
The rigor here is in really thinking through the critical assumptions, and demonstrating how they will affect your revenues and costs for the next 4–5 years. It’s surprising how many entrepreneurs omit, or are lax about even the simple things: What’s the pricing? How many units (or subscriptions etc) will you sell per year? How much do you need to spend on marketing, sales and technical staff — particularly as you grow?
And then, there are the KPIs
Acceleration (virtual or otherwise) — is not just preparing you and your company to be attractive for investors. It’s preparing you to be a high-growth company. The KPIs are the critical numbers — Key Performance Indicators — that will not only indicate how well your company is (or will be) doing. KPIs will also tell you, as the founder/CEO, what you need to focus on in order to scale and grow. If you’re not an expert on your financials and your KPIs, then you’re falling short as a modern startup founder. The accelerator will help you get started and get better at the numbers.
Mentor-Coaches are there to help
It’s a cliché that entrepreneurs like to fly solo and figure things out for themselves. But during the virtual accelerator, entrepreneurs often say to their mentors and coaches “I’ll work on it myself offline and then we can discuss once I’ve made headway on the assignment”. This almost never works.
Allow your mentors and coaches to make the job easier. Many assignments merely need some clarification or extra examples to make them 10 time easier to complete. Other times, it will be almost impossible to make progress on an assignment without iterations and feedback from your mentors, and your peers.
And, while they will be encouraging and informative, they will also seem critical and judgmental. Often your original assumptions will be challenged and you’ll have to change fundamental aspects of your startup. This tough love is a gift — and worth 100 times the cost of any program you’ll ever pay for.
The End … is Just The Beginning
The final pitch deck is where it all comes together: The each week’s deliverable becomes a component of the final slide deck and presentation: The refined description of the opportunity, the product/solution, the market, customers, the team and the financials. And then you’ll practice delivering this presentation to an audience (that often will include active investors).
Now, you might get the impression that this is all about preparing your investor pitch — but the real value is the bootcamp-like rigorous deep-dive into each aspect of your business.
In the end, you’ll think it’s all over — but your journey is just beginning.
CJ Cornell is a 6x founder/entrepreneur with 3 exits; a university entrepreneurship professor, the author of 3 books, and published research papers on entrepreneurship and innovation. Over the past 20 years, he’s also been a veteran mentor and coach at 3 startup accelerators, 2 incubators, and at 9 virtual accelerators.
He is the author of the bestselling “The Age of Metapreneurship — A Journey into the Future of Entrepreneurship.”
And the upcoming “The Startup Brain Trust — A Guidebook for Startups, Entrepreneurs, and the Mentors that Help them Become Great.”
Follow him @cjcornell or visit: www.cjcornell.com
Image Credit: leg0fenris — “Fog of war”