“Should I do an accelerator?” – almost every founder ever
Everyone asks me if they should even do an accelerator in the first place. If you’re a first-time founder, I will reply with an enthusiastic yes. As a company we've gone through them all: Techstars, Y-Combinator, Sequoia’s Company Design Program, and On Deck. They are a lot of work and by no means a magic bullet to unicorn-hood, but if you put in the effort, you will reap copious rewards.
“Should I do more than one accelerator?” – you, after reading the above paragraph
The answer is a clear and strong, ¯\_(ツ)_/¯. We certainly don't regret it but it depends on your business model and what networks will be integral to your success. At Warmly, we think a lot about helping folks build stronger networks and deeper relationships (we're a free app that connects to your calendar to give you instant insights on people while you're meeting with them over Zoom).
Y-Combinator vs Techstars
A question I get a lot from other founders is “Which one should I do – which one is better?”. As with every normative question, the answer is it depends. Depends on what you and your company are looking for.
Techstars is better at:
- Cohort camaraderie
- Providing work space
- Growing you as a leader and person
- Help pivoting and finding a real pain point
- Teaching the detailed operations bits on how to run a company
- Providing mentors who are responsive and invested in you
- Being open to new ideas and process improvements
- Access to B2B companies outside of Silicon Valley (Midwest & East Coast that trend more old school)
Y-Combinator is better at:
- Connecting you with a network of lots of unicorn founders
- Having a very active and helpful internal social network
- Fundraising – raising bigger rounds at higher valuations
- Opening doors due to brand recognition
- Pushing your business to hit aggressive revenue goals
- Investing in moonshots (wild and risky ideas that might be huge)
- Giving you tactical and succinct advice about a slew of very relevant topics such as GTM strategy
- Access to the almost any Silicon Valley startup and extension B2C growth advice
Let’s break it down
Caveat: We did half of Techstars in person and half remote (COVID). We did all of YC remote.
Techstars is a massive program with cohorts all over the world. We did the Techstars Boulder program, so I can really only speak to the experience there. I don’t know much about the other Techstars programs, although I suspect they are similar-ish.
- The Techstars Boulder program accepts 10 companies. With an average of 3-4 people per company, that’s about 30-40 people you get to know. Our Boulder Slack channel has 63 people in it, including program leadership.
- They hosted weekly bonding events where each week one team is responsible for planning something fun while we announce “wins”, “gratitudes”, “asks for help”, and who is “in the ditch”. Being in the ditch means you did something dumb like getting your GSuite suspended for your entire company for 24 hours so no one could send emails or open up a doc (yeah, I did that).
- 3-day offsite in the mountains packed with bonding and high quality, well run personal growth workshops (Not sure how they do this during COVID)
- Weekly CXO (CXO’s are any founder who’s not a CEO) and CEO forums where people gather and practice conflict resolution and work through emotional pains together. My cohort’s CEO and CXO forum is still going after the program! (Active during COVID)
- Swag on day 1 that everyone wears at the office (hat, hoodie, t-shirt, water bottle, stickers), it makes us all feel like more of a community.
- YC accepts ~200 companies. Our YC S20 Slack channel has 583 people in it, including program leadership. The 200 companies are broken up into roughly 5 groups. Our group has 110 people in the Slack channel. The groups then have sections of 5 companies each. Our section Slack has 15 people.
- Weekly dinners with half of the cohort
- During COVID this turned into a zoom call with a YC alum talking about their journey. I personally really enjoyed these speaker sessions and found them to be helpful to building a business. Downside is that there was no hangout time with other founders in the cohort.
- After dinners, founders typically hang around to chat together
- During COVID: Donut chats via Slack, otherwise no planned cohort bonding time. I enjoyed my Donut chats, although the response rate wasn’t great from other cohort members.
- Buy your own swag. Swag isn’t important to me and I think that because of COVID YC actually is sending us a swag pack, although they ran into some shipping issues (much like the rest of the world) and we still haven't gotten it.
For their investor network, especially in a virtual world, it’s YC. We don’t have enough data on who is better at teaching how to fundraise since we weren’t raising during YC. And that, is a very important skill to learn.
- Techstars has an extensive network of investors and a lot of background in B2B SaaS companies. We intended to pitch in front of 200+ investors in person in Boulder but because of COVID this turned virtual. The Demo Day with Techstars went well – check out our polished 4 min virtual presentation (yikes, so old! several pivots ago) that Techstars helped us prepare for extensively.
- Several of our Techstars mentors angel invested in us, as well as one VC firm Matchstick Ventures, a firm associated with Techstars. All of these were relationships we built in the program.
- Although the money we ended up taking didn’t come from inbound virtual Demo Day Techstars investors (~50 inbound), the video seemed to be quite helpful for the investors we ended up choosing. We have a hunch that we would have had more in-person investors had COVID not occurred.
- The very basis by which we learned how to fundraise, came from Techstars. David Cohen, the founder of Techstars, gives a seminal lecture to founders on essentially “How to convince most investors to ask to invest in you.” It’s legendary.
- Techstars provided the following fundraising help: (1) Multiple pitch-practice sessions in internally (2) 2 pitch-practice sessions externally live with real investors (great to get real investor feedback!), (3) Warm intros to ~10 top requested investors from their internal list
- Techstars’ internal data on investors from their Techstars Connect portal was not very helpful.
- YC has an incredibly strong brand name amongst investors in the Valley. With companies like Stripe, Airbnb, DoorDash, Coinbase, Instacart, Ginkgo Bioworks, Gusto, Reddit, and more coming out of YC, that shouldn’t be surprising. Investors want in on YC companies and the average valuation of a YC startup is substantially higher than a Techstars startup. YC is like a feeder high school to the ivy league investors.
- In YC in June we were getting ~2 inbound investors requests per day (this increased to 4 per day after we publicly announced our Seed Round in Forbes).
- YC provides “Fundraising Office Hours” and helps prepping for and demoing on Demo Day. The partners are quite responsive. Caveat: this is hearsay from founder friends since we skipped Demo Day as we didn’t need to fundraise
- YC Demo Day was virtual and participants were allowed a single slide (!) and 1-minute (!) to explain their company to watching investors. We actually really appreciated this simplicity vs the traditional lengthy slide deck.
Grow as a person and leader
- Techstars invests in your brain and well-being. I already mentioned the emotional support CXO/CEO groups, which are lead by a mental health pro, who is in the office everyday for 1:1 chats at any time. Our pro was Keith Gruen, who just launched his own YouTube channel.
- Additionally, they provide you a free leadership coach that you meet with weekly. My coach was instrumental in helping me work through and gain the skills to manage some the really challenging things I went through during the program. In addition to this, a lot of their curriculum is structured around being a better team leader, in addition to tactical business building advice.
- No mental health support or leadership coaching that I’m aware of. Maybe there is one, but it wasn’t made known to me nor did I proactively ask for one. However, you search for “mental health” in Bookface (YC’s internal social network), you find a good number of posts where founders are speaking honestly to each other about this sort of thing.
Internal social network
- Techstars has an extensive internal network that thousands of people are on. It’s pretty good and has tons of resources to help founders build a company.
- There’s an ad hoc mailing list that people can reach out to when relevant (it’s call Amplify). The rule of thumb is that for every Amplify request you have, you get 10 people with theirs. They are usually akin to “help like/share/comment on my new launch”.
- Because YC is a smaller community, bonds are stronger and the internal network (Bookface) is much more active and reliable than Techstars’ internal network. Almost every post has several replies and people are eager to help with all sorts of professional and personal favors. For example I was looking for roommates for my place in Hawaii and I posted on Bookface instead of Techstars Connect because the smaller community felt more personal and has an established norm of not always being only about business.
- YC has a daily digest emailed to you of the most poppin’ posts of yesterday.
Help pivoting and finding a true pain point
- We got into Techstars with an MVP for a mobile app for professional networking. By the time we started Techstars we learned that this idea wasn’t going to take us anywhere so we pivoted to PushPull. Week 2 of Techstars has a thing called Mentor Madness, where you pitch your idea to 80+ mentors. After the crazy two weeks of Mentor Madness, you choose 4-6 longer term mentors who help you throughout the program and beyond. The Madness weeks are grueling but incredibly enlightening. We pitched our PushPull idea and got expert feedback on the reality of building a business like this. We met with our chosen mentors weekly and got incredible insights that would have taken us a very long time to get ourselves. Because of Mentor Madness we ended up pivoting and finding a pain point that got us real paying customers by the end of the program. We wrote our first line of code in the middle of March and, by the end of April, showed up to Demo Day with 19 customers and raised $2M+. This was only possible because of the insights we got.
- We had also had a Weekly Ops Review with Techstars, and this had a very clear and effective structure to discuss our business goals and how well we did on the goals from last week. Everyone made a slide deck using the template and had 5 minutes to share their updates. At the end there would be a brief Q&A where other founders would comment and typically ask insightful & helpful questions.
- By the time we started YC, we knew what we were building, or so we thought. Our idea seemed good enough and we were never really challenged on it. We had traction and a tiny amount of revenue after all. Because of this, we didn’t proactively ask for help on figuring out a pain point. That being said, I spoke to a few founders (via Donut chats) who were in the very early stages (like what we were in at the start of Techstars) and they said they still felt really lost and like they weren’t getting the help or support in finding a pain point.
- With YC you have a weekly check-in meeting. Every week it alternates between a group (5 companies) check-in with your YC Partner and one without the partner. The goal of those meetings is to check in on how you did last week and what you want to do this week. Those meetings didn’t have strong structure and overall didn’t feel very productive or helpful. The ones without the Partner were truly unstructured, albeit, a nice social time.
Investing in moonshots & wild ideas
- Techstars leans more heavily towards companies with proven business models and it seems to take less risks on wild ideas.
- YC seems to have a much higher risk tolerance and so do the founders they accept. YC casts their net wide with a cohort of 500+ people and accepts in competitive companies (there were at least 3 Zoom competitors in our batch) and relatively high-risk (compared to SaaS) biotech or hardware companies. The average YC founder comes from the tech scene already, so they are primed to be extraordinarily scrappy and have bold visions. YC founders are also much younger on average, and don’t have families or mortgages, so they are willing to lose it all.
- Free office space where 10 companies work and laugh together
- Not available during COVID, obviously
- No office space, although I think not during COVID the YC HQ has couches and hangout areas for socializing after the weekly dinners.
Help getting media mentions
- Their press announcement led to a few more article mentions (google "techstars boulder class of 2020 colorado")
- Techstars gave us 120 personal intros to customers in Techstars Network
- They tweeted/facebooked our Forbes seed round announcement
- Getting media and PR may seem like a “nice to have”, but trust me, it’s key. Proper marketing, especially in a saturated market like sales enablement tools (our startup) can make or break an aspiring unicorn.
- They have a partner devoted to press and PR (Kat Manalac) and she spent time with us reviewing and offering suggestions for our press release that was very helpful in our pitch to multiple outlets. Though their connections to TechCrunch declined to profile us <sad violin music plays>, Kat's wordsmithing was critical towards getting Forbes excited about us (the Forbes intro came through our investors).
- Our Bookface post (internal YC network) was read by 1000+ and led to multiple customers
- They tweeted/facebooked our Forbes seed round announcement
Ultimately the choice is yours. But if you're drowning in decision paralysis then one way to think about it is as a mindset:
- If you are a baby bird that just hatched out of your cushy and stable 9-5 job and know little of the world of entrepreneurship, go for the program that will support you more (Techstars)
- If you are an older bird who knows what they are doing but just needs more access, go for the better brand recognition program (YC)
And while picking an accelerator is important, the reality is if your business sucks then neither accelerator will make you a unicorn.
May the odds be ever in your favor,
Cofounder @ Warmly
YC S20 & Techstars Boulder '20