Seed accelerators: the best of Silicon Valley
Silicon Valley is one of the only places in the world where investors see too many good deals. Many of those deals come through trusted networks – entrepreneurs, partners, and friends – but increasingly there is a tremendous amount of high-quality selection happening at the level of top seed accelerator programs.
While there are several international programs and a few that are national, accelerators in Silicon Valley benefit from an unequaled ecosystem that’s already present. YCombinator and 500Startups are the largest, and pride themselves on providing access to the Valley’s ecosystem. Others such as AngelPad are more “boutique” and focus on intensive mentorship of a select few companies.
It’s important to note that while these programs are mainly based in the Valley, many if not most of their best companies are transplants – companies founded elsewhere that have seized their opportunity to come to Silicon Valley and accelerate their dreams. Some of the best programs include:
- 500 Startups
Backed by Dave McClure and his team, 500Startups is making a big splash in the Valley with some of the most hip companies around. They are on their third and largest class of companies, over 30 teams at various stages of development. 500 is unique because of its clear focus on design, distribution, and monetization – it is one of the only accelerator programs backed by an in-house seed fund that co-invests with angels and VC partners.
- YCombinator
Among the most established of the accelerator programs, YCombinator continues to churn out high-quality companies and score high-profile successes. The most recent batch of companies exceeded 60 – hitting all corners of the entrepreneurial spectrum. YC founder Paul Graham has a detailed post going over what exactly happens during the program. - AngelPad
AngelPad is a mentorship program founded by a team of ex-Googlers to help web-technology startups build better products, attract additional funding and ultimately grow more successful businesses. Their classes of ~15 startups are smaller than other programs, allowing a closer and more hands-on connection with the mentors. - I/O Ventures
Led by ex-entrepreneurs from BitTorrent, mySpace and more, I/O Ventures is an early stage startup program that focuses heavily on mentorship. They work closely with founders from product launch through the next stage of company development, sharing best practices in product scaling, revenue growth and fund raising.
Rapid Prototyping: the Lean Startup Way
The greatest gift the web has given to entrepreneurs is the ability to experiment, fail, and learn – early and often. In previous generations, it would take $1M and 6 months to try out a product idea – today you can do the same over a Startup Weekend for a few dollars in hosting costs.
Some may think this means that entrepreneurship has become easier. Far from it – it has become more rigorous: it is no longer enough to have a great idea, you also have to have a great way to communicate your idea, a process for learning and improving based on feedback you receive, and the agility and foresight to recognize changes and execute quickly.
To be successful in this lean startup world, the product team needs to have its ear to the ground and be able to openly and effectively communicate ideas – within the team as well as with management and others. If the communication of an idea is not effective, the idea itself is unable to generate any impact.
It’s in this context that I came across the following brilliant instructional video by Aza Raskin, former creative lead for Firefox at Mozilla and current founder of MassiveHealth, a Silicon Valley startup helping users improve their health through better data, better design, and feedback loops. In the video, Aza outlines the process he uses to communicate ideas through rapid prototypes – giving your audience a touchable, feelable demo from which they can easily extrapolate your final vision.
Most importantly, a prototype allows you to test your ideas, your assumptions, and your understanding of the problem. Often during rapid-fire tests done well, not only does the solution change but so does the nature of the problem being addressed. Watch the video! Slides also included underneath.
Rapid Prototyping with Aza Raskin from Dan Braghis on Vimeo.
How to prototype and influence people
View more presentations from azaraskin
Zong Success Story: Global Acceleration at its Best
Dear Friends, Thank you for your kind words and continued support. I thought you would be interested in reading the gripping commentaries on Zong’s amazing success story. It seems like only yesterday when we invested to help grow the company in Europe and, after generating traction, accelerate its success in Silicon Valley in 2008. Today, Zong is the world’s leader in mobile payments, serving 30 million customers across 250 carriers in over 45 countries. The acquisition allows PayPal to deploy Zong technology to serve its 9 million+ merchants, driving an estimated $3bn in mobile payment volume in 2011. For Newbury partners, the acquisition represents a more than a 7x return on investment. We look forward to sharing more success stories with you in the coming months. Kind regards, Ossama Hassanein
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 “Zong has massive international reach, offering mobile payments in 21 languages and 45 countries [...] Marcus and his team will have a critical role in PayPal’s future transformation in the payments business [...] to create the digital wallet of the future.”
- TechCrunch “The ultimate goal: make sure there’s a solution anywhere a customer feels the impulse to pay for something” - ZDNet “We believe that Zong will strengthen this value by helping us reach the 4 billion+ people who have mobile phones, giving them more choice and security when they pay.” - eBay More Media coverage from TechCrunch, Wall Street Journal, Bloomberg, Fortune, CNN, Reuters, RWW, Marketwatch, Mashable, VentureBeat, ZDNet, and FastCompany. |
Dropbox: Explosive growth in cloud services
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Dropbox is the world’s leading cloud storage service, used by over 50 million people worldwide to securely sync files across multiple computers, access documents from anywhere, and share files and folders of any size. The idea for Dropbox was conceived on a bus ride, when founder Drew Houston was frustrated that he had forgotten his USB memory stick at home and began engineering a cloud-based file-sync solution. Knowing he had to be in Silicon Valley to achieve his ambitions, Drew moved to San Francisco together with co-founder Arash Ferdowsi and joined YCombinator, one of Silicon Valley’s most prestigious acceleration programs. Much of Dropbox’s success is attributed to its simplicity: users can be up-and-running in minutes, for free. They can share the service with their friends and get extra space, and they quickly sign up to a paid plan when they hit their maximum storage limit. With this simple formula Dropbox draws in over $240 million per year – three times more per employee than Google. The company has grown rapidly since inception and today has over 50 million users with another joining eery second. Over 1 billion files are sync’d across the network every three days. Not stopping at dominating the consumer market, Drew and Arash are quickly expanding into business and the enterprise as well. Dropbox recently raised a venture round valuing the company at over $4 billion, positioning them to become one of this decade’s greatest success stories. |
“Revenue is on track to hit $240 million in 2011 despite the fact that 96% of those users pay nothing. With only 70 staffers, Dropbox grosses nearly three times more per employee than even Google. [...] It’s only going to get better. ” “Trying out the service for free, users become hooked. In the case of Dropbox, they’re hooked on having their data in the cloud.” “Add Dropbox to the list of consumer techs that have infiltrated the workplace, like iPhones, Gmail and Skype. [...] millions already sign up with their work e-mail addresses. “ |
Launching a global digital business
Perhaps the most important pillar of our investment thesis is that technology knows no borders. Companies that operate digitally can instantly compete on a global scale, serving products and services to customers across the world. Successfully managing a global presence is not an easy task, however, and a number of factors come into play in every single case.
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Semantic web: does the world make sense, or do we make sense of the world?
Since shortly after the founding of the internet, the central problem facing its users has been not in the amount of information available, but rather the imperfect methods for finding that information. In the early days of the web, directories such as Yahoo! held the keys to what was then a comparatively small but rapidly multiplying pool of content.
After the directory model proved untenable and Ask Jeeves-style contextual queries proved inefficient, search emerged as the dominant form of engagement between man and machine, an engagement dominated by Google. However as the pool of content rises exponentially and noise is continually added to the system through social networks, commenting systems, and the ever-ubiquitous email, the challenge of sorting through the chaos is one that falls squarely on the human brain.
The search for defining and “database-ing” our world has led to the development of the semantic web: a formal structure for defining and organizing the information that’s out there. The video below is a fascinating dive into the development and progression of these dynamics.
Technology firms get a kick-start in the Valley
A wonderful article below illustrating the success of the Canadian Technology Accelerator (CTA) program, helping Canadian startups gain access to Silicon Valley resources through the Silicon Valley Plug and Play Tech Center headquarters. Read More »
Twitter and Digital Media in the Middle East
More promising statistics from the Middle East – and a confirmation of the pivotal role social media is playing to make communication and freedom of expression easier around the world. The infographic below is from our friends at IQPC and SocialBakers. Read More »
Infographic: Social Gaming By The Numbers
Many entrepreneurs that have approached us are game developers – take a look at the below infographic (“information graphic”) for some very relevant facts and figures. Of note: Read More »
