SXSW 2014 Accelerator vs Incubator Presentation

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  • Avoid Stagnation: Acceleration Trumps Incubation

    Bill Aulet, Managing Director, Martin Trust Center for MIT Entrepreneurship

    March 8, 2014

    entrepreneurship.mit.edu @BillAulet

  • Summer 2012 Summer 2010 Startup Central

    Summer 2011 Wicked Awesome Summer StartUp Program (a/k/a WASSUP)

    Summer 2012 FSA

    Summer 2013 GFSA

  • Time

    Succ

    ess

  • Complete the Ramp

    Entrepreneurs Not Companies:Teaching our students how to fish rather than catching a fish

    Fulfill MITs Mission

    Goals of FSA

  • Validation

    MIT Entrepreneurship Ramp

    Inspiration, Idea,

    Technology

    Classroom Extra-Curricular

    The Grand Plan: The Ramp

    http://web.mit.edu/site/aboutsite.htmlhttp://web.mit.edu/site/aboutsite.html

  • We neededsomething to

    support students!

    Validation

    MIT Entrepreneurship Ramp

    Inspiration, Idea,

    Technology

    Classroom Extra-Curricular

    Most Often Unable to Achieve Escape

    Velocity

    Plan vs. Reality: Before FSA

    http://web.mit.edu/site/aboutsite.htmlhttp://web.mit.edu/site/aboutsite.html

  • Validation

    Completing the Ramp with FSAMIT Entrepreneurship Ramp

    Inspiration, Idea,

    Technology

    Classroom Extra-Curricular Accelerator

    http://web.mit.edu/site/aboutsite.htmlhttp://web.mit.edu/site/aboutsite.html

  • Peter Thiel Fellows Program

    $100k to dropout

    Challenge

    RESULTING CONCLUSION

    Photo of Peter Thiel by David Orban via wikipedia.org

    Stay in

    school

    Be a Serious

    EntrepreneurORX

  • Changing Face of Entrepreneurship

    Herbert B. Jones Foundations Milestone Achievement AwardsUniversity of Washington

  • Educational

    Honest broker

    Existing extensive entrepreneurship eco-chamber & value chain

    Tremendous opportunity for a complementary program

    MITs Unique Role

  • Space

    Stipend

    Structure

    Status

    How GFSA Works

    Global

  • CommunitySupport - emotional, pride, culture

    Learning

    Peer motivation

    Space

  • 1. Baseline: $1k/month per person

    Creates full focus

    2. Milestone Awards

    Stipend

    Area Mtg #1 Mtg #2 Mtg #3 Mtg #4 Total

    Customer $5K

    Product $5K

    Team $5K

    Financial $5K

    Cumulative $20K

    3. Discretionary budget available

  • 1. April 6 1st round of applications due2. April interviews3. May 1 decisions4. 3.5 month program5. Demo Day at t=0 Festival (mid-September)6. Goal: student capabilities reach escape velocity

    Structure

    Student

    Team

    Mentor Network

    EiRs

    VMS

    Catalyst

    Prototyping

    Labs

    IDC

    Committee

    Holds team accountable

    Customized for team

    Members have BoD

    experience

    3 monthly meeting and 1

    final meeting

    Tues & Thurs

    Luncheon Series

    JIT Education &

    connections

    Internal & external

    Informal Support

    Staff

  • General Rhythm

    Validate & invalidate

    idea based on Primary

    Market Research (PMR) &

    refine team

    1st 30 Days

    Continue to refine team & focus on product

    definition & dev

    2nd 30 Days

    Financials, product

    deviterations& polish

    for graduation

    3rd 30 Days

  • 1. Acceptance with Social Norms

    2. Good Housekeeping Seal of Approval/Status

    Status

  • Reaction of Students & Application Process

    ALL APPLICATIONS129 Teams, 376 Participants, 241 MIT Students (All Schools)

    FIRST SCREENING26 Teams, 88 Participants, 61 MIT Students

    GFSA FINAL SELECTION10 Teams, 35 Participants, 25 MIT Students

    Other Summer Accelerators: 40 Teams MIT Beehive Coop30 Teams MassChallengeRockHealth, HealthBox, YC, etc.

  • GFSA Educational Component

    TEAM Founders Agreements & Equity

    Splits

    Hiring and Firing Employees

    Developing Company Culture

    CUSTOMER Primary Market Research/

    User Innovation

    Developing a Persona

    Securing your First Customer

    Decision Making Unit/Decision Making Process

    FINANCE Legal Issues and Startups Building Financial Statements Entrepreneurship MicroEconomics:

    CoCA & LTV Alternative Ways to Raise Capital

    PRODUCT 24 Steps to Successful Product Launch Protecting and Growing your Core Iterating, Refining & Evolving Your

    Product Building a Pricing Model

  • GFSA Clinic Leaders

    MIT Management and Engineering Faculty

    Eric von Hippel Matt Marx Catherine Tucker Fiona Murray Sanjay Sarma

  • GFSA Clinic Leaders

    Internal Trust Center Resources

    Bill AuletManaging Director

    Christina ChaseEntrepreneur in Residence & Student Evangelist

    Kyle JudahGFSA Program Director

    Elaine ChenRethink Robotics

    Jim DoughertyGreat Hill Partners

    Charlie Tillett50-50-50 Consulting

    Brian HalliganHubSpot

    Entrepreneurs in Residence (EiRs)

  • GFSA Clinic Leaders

    External Resources

    Baak zerNokia

    Jack VanWoerkomHome DepotStaples

    Christopher O'Donnell HubSpot

    Kevin RustagiFounder, Ministry of Supply

    Kit HickeyFounder, Ministry of Supply

    Paul EnglishFounder, Kayak.com

    Prahar ShahFounder, Mobee

    Aaron WhiteFounder, Boundless Learning

    Joe Greenstein Founder, Flixster

    Dharmesh ShahHubSpot

    Jim BaumCEO, Netezza

    Chuck KaneFounderOne Laptop Per Child

  • Extremely Important Forcing Function & Closure Event

    Three Goals for Three Audiences

    Students

    GFSA/Beehive

    Integration of External Players

    Positive effects already seen

    3x increase in student participation in t=0 events from last year

    Fills pipeline to make next years GFSA much stronger

    Dozens of teams proactively asking to move into the Beehive

    Videos of Demo Day presentations can be seen at:

    http://entrepreneurship.mit.edu

    Demo Day Graduation Event

    http://entrepreneurship.mit.edu/

  • 0

    1

    2

    3

    4

    Customer Product Team Financials/Other Overall

    Participant Data Validates Assumptions

    Ability to Articulate Theory

  • 0

    1

    2

    3

    4

    Customer Product Team Financials/Other Overall

    Participant Data Validates AssumptionsAbility to Execute

  • Participant Data Validates AssumptionsNet Promoter Score of +73

    This was one of the most valuable experiences Ive had while at MIT.

    We learn a lot of theory in class, but now we know how to execute.

    The program fills the chasm that often limits ideas/projects from becoming real businesses.

    This experience helped us to quickly develop the product that addressed real market needs, and with a high market potential.

    This real world experience really helps clear up a lot of misconceptions about the struggle as well as the pay

    off in the end.

    I have already advised professors at other universities

    about the program and suggested that this is the real way to honor your students.

  • OVERALLHuge success in allowing teams to make progress beyond best case scenario

    Three months is about the right time less time would not be enough maybe a month longer would be even better

    There were conflicts with academic work at times but was manageable (WiCare & SmartScheduling)

    10 was a good size for year 1 & could grow next year but need to be careful on scaling too fast

    Lessons Learned

  • Lessons Learned

    SELECTIONTeam should be the #1 criteria far & away - the best teams far outperformed the teams with more compelling projects at the beginning

    Developing culture in the GFSA cohort is a tricky but very important thing. Keeping a collaborative and positive spirit in the program is important to optimizing its success.

    Have mixed skilled teams makes a difference this is a very good criteria

    Once teams get funding, they should probably not be in GFSA

  • Lessons Learned

    IMPLEMENTATIONKey element was giving the teams the chance to revisit strategy/direction without a loss of urgency (there was only three months)

    Teams still reconfigured founders issues took a lot of time; Forcing a founders agreement milestones halfway through was very productive

    Board meetings and milestone payments were extremely implortant in complementing the mentoring Demo Day as a forcing function worked extremely well and was a huge amount of work to pull off

    There is a limit to the value of mentorship and at some points it can get to be too much. Teams have to do things and get answers themselves rather than continually listening to more people.

  • Acceleration works

    General Incubation does not work as well

    Avoid Stagnation: Acceleration Trumps Incubation

    Conclusion

  • More info

    The book www.disciplinedentrepreneurship.com

    Progress Dashboardwww.detoolbox.com

    29

    http://www.disciplinedentrepreneurship.comhttp://www.detoolbox.com

  • Coming March 18: New Online course

    Google edX Entrepreneurship 101

    https://www.edx.org/course/mitx/mitx-15-390x-entrepreneurship-101-who-1312

    https://www.edx.org/course/mitx/mitx-15-390x-entrepreneurship-101-who-1312

  • Top 10 Teams All 129 teams that applied

    Number Percentage Number Percentage

    MIT Undergrads 1 4.0% 45 19.7%

    MIT Master's 18 72.0% 113 49.5%

    MIT Doctorate 5 20