What I learned in my first month of running a startup accelerator

I have been the CEO of the Microsoft Accelerator for the past month. There are 11 companies as part of the batch and it has been an exciting ride. One of the things I focused on is trying to make the program a lot more structured than YCombinator and modeled it around a finishing school that I always wanted. Here are the top things I learned.

1. Dont try to change an entrepreneur’s idea. They have to come up with something they like themselves. This seems fairly trivial. There are many incubators and seed funds that believe if you dont have an idea, but are great entrepreneur material, they will “give you ideas”. That rarely works. Entrepreneurs have ownership and pride only for things they believe “they came up with on their own”. Anything borrowed (even if its a clone or knock-off idea from a US startup) is theirs. They will put more wood behind their idea than anything you ever propose.

2. Indian entrepreneurs have varied expectations from accelerators. One entrepreneur wanted “execution” help in actually doing the design (preferably a full time designer and user experience person for a few weeks to do it) and another wanted better quality food at the cafeteria. Some think the biggest value proposition of an accelerator is the “quality of the space” (i.e the physical location), while another thought the value was the other startups who would egg them to get better.

3. Regardless of what you offer, there’s always someone offering more or better, which I think is the “grass is greener on the other side syndrome”. If I had a penny for every time someone said “I have heard YCombinator founders get XYZ” or “500 startups gives more ABC”, I’d have enough money to fund all the startups for a year.

4. Indian companies need a lot more user experience and design help than any US company. I have invested in over 20+ companies in the US and about 11 here in India. Its extremely hard to find good user experience talent in India. This is a different person from someone that just does Photoshop and illustration. We interviewed 23 “highly recommended” designers and user experience professionals in India. Most were average and were still charging rates from $20 / hour to $100 / hour. No negotiation.

5. The Go-to-market challenge is largely under-appreciated in India among founders. Many need more help here than any other area, but tend to relegate the problem to “lets hire someone to do that”. Unless one founder is deeply involved in the customer development process, we largely build technology for the sake of it.

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18 thoughts on “What I learned in my first month of running a startup accelerator

  1. Ahimanikya Satapathy

    Mukund: wonderful observation, feel sad for #2 & #3, this mainly the inability to value what one has in hand. #4 is a deadly fact and I struggled hard but finally found someone who is good enough. #5, I completely agree and I am very thankful to your contribution to my GTM planning.

    Reply
  2. PK Gulati

    Very well summarized view of the new Indian startup scene. Have had similar experiences over the years I have been closely watching and investing… Good luck with the initiative, more of which are needed all the time, considering the size of the country. Need more people like you who put their money on what they believe.

    Reply
  3. Sathish Hariharan

    Good stuff. The first point is an excellent one. This needs to be drilled / hammered into the heads of investors and mentors trying to “help” startups. The moment you try to change an entrepreneurs idea, you have lost them. What is required is a counseling like approach and help the entrepreneur themselves “pivot” to something better instead of saying “this will not work, why dont you try XYZ”. Even seasoned mentors don’t get it.

    Reply
  4. Subramanyam Kasibhat

    Just returned from IIM-A CIIE 10 days workshop as part of POI Contest. 75 companies, 7 Days * 14 hrs, was just awesome. The event helped many companies to better their business plans. The program had packed sessions for all with experts from various fields spending 45 min one-on-one sessions with each team, on topics of interest to them. Like Financial Modeling, Funding, Talent, Go to Market, Legal, etc .. which worked very well. Accelerator sessions of this sort for larger teams would also help impact the overall ecosystem.

    Reply
  5. Arvind Jha

    great article..learnt a few things..a couple of suggestions:

    1. Have you tried web-based design communities to addressing #4 ?

    2. What are some solution ideas towards #5 – in my mind this could be the single major value add from an incubator side

    - Arvind

    Reply
  6. Gokul Singh

    Great observations. I don’t know why people expect more from those helping them (point # 3). Entrepreneurship is about knowing what you need (not want) for your idea and making it happen. It is never about what the other person got from whom.

    Reply
  7. Vijay Praveen Kumar (@VijayPraveenKP)

    Mukund: Firstly nice to be introduced to you via your blog.

    I have been seeing you around at NASSCOM Bangalore office ( I work at nasscom B”lore ). But your blog helps me to connect with you.

    Agree with you on India’s talent and ability on User Experience.
    Personally I am working with a start up and helping them increase the design capability. Not because I am a designer, because I have exposure toward design (I was part of International architects group)

    With my exposure & with the start ups design capability we are working towards building good business. We are complimenting each other skills. I believe Accelerator will help groups like us go to next level, because Accelerator connect and triggers idea’s n thoughts, which creates business value.

    A lot of things are intangible !!

    Regards
    Praveen Kumar

    Reply

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