Last week’s Lean StartUp Melbourne meeting was devoted to the AngelCube accelerator program. Given some of the high-profile start-ups that have come through this process, it was hardly surprising that nearly 400 people turned up to hear various AngelCube alumni share their personal experience (as well as to enjoy some free beer and pizza, courtesy of the evening’s sponsors: inspire9, BlueChilli, Kussowski Brothers and PwC).
First up, there were lightning talks by 3 successful program graduates: the team behind fantasy sports app developer C8 Apps, Ash Davies from self-publishing platform Tablo, and Phil Bosua, the technical genius at LIFX who designed the WiFi-controlled LED bulb. All of them vouched for the benefits of the AngelCube program, and offered key learnings – such as “fail hard, fail fast, fail forward”, and the value of having a disciplined weekly cycle of iterative product builds. Access to quality mentors was also a key factor.
Then Indi from OutTrippin joined the guys for a Q&A panel session, facilitated by AngelCube co-founder Nathan Sampimon.
Some of the accelerator program insights on the night were quite revealing –
- it’s all about product-market fit
- a solo founder will usually struggle on their own
- be prepared to either pitch or pivot at the weekly program reviews
- the $20,000 seed funding (for 10% of your business) doesn’t go far…
- a B2B concept is less likely to be accepted to the program (due to longer sales cycles)
- the model is founded on lean methodologies, frequent iteration and getting to an MVP
- people with at least one start-up project behind them tend to do better
- the AngelCube angels are investing in the team as much as the idea
But are start-ups really only for young(er) people? This question has been posed by Dan Mumby, from Melbourne’s StartUp Foundation, which offers a different sort of program aimed at would-be entrepreneurs who may have all the trappings of middle age: family, job, mortgage…. which means they have different personal and financial risks to consider.
On the other hand, as at least one AngelCube participant said, if you are serious about founding a start-up, “your first job is to quit your job”.
Another, broader challenge facing the local start-up community is a lack of serious investor interest. According to one panel member, “In Australia, getting funding is a joke unless you are literally digging for gold”. This may change with the launch of VentureCrowd an early-stage equity funding platform. (But it looks like it will be a struggle – at the time of writing, none of the 20 or so deals publicly showing up on VentureCrowd’s website have attracted any funding.)
An alternative funding model, based on the sweat equity principle, is a venture bank, like New Enterprise Services that essentially matches ideas with expertise through a risk-sharing process.
I always recall the advice I was given by one serial entrepreneur when I asked him whether start-ups are for everyone (regardless of age). He replied: “Unless you can afford to invest at least $20,000 in your idea, and support yourself for at least 6 months while you develop it, then maybe it’s not for you.”