Recently my company (Govlist) completed the 500 Startups accelerator program in San Francisco. 500 Startups has a similar model to many other tech accelerator, programs providing mentorship, resources and funding in exchange for equity in the startup. The objective of the program is to help companies rapidly accelerate their growth over a short period of time. Let's dive into some of the specifics of the program.
- Distribution: 500 Startups shines in this area. They provide a ton of resources around sales and marketing. One of the highlights of the program was an event dubbed "Sales Hell Week", which was a weeklong event chalked full of various sales and marketing content delivered by industry leaders. In addition each startup is assigned a Distribution point of contact with specialized knowledge in the startup's preferred sales channel. The POC acts as an advisor throughout the program as startups test out various distribution strategies.
- Mentorship: 500 Startups has created a strong brand over the years and has been able to build a strong mentor network. From been there, done that tech veterans like Atlassian's Scott Farquhar or Uber growth expert Andrew Chen to industry thought leaders to in house entrepreneurs, 500 provided access to a wide range of mentors.
- Fundraising: Another area 500 excels is with fundraising help. There are tons of resources available for running a proper process. Everything from learning how to manage burn rate to pitch deck preparation to investor outreach. 500 also provides a strong brand name, which adds legitamacy to the startups it invests in. Similar to how attending a prestigious university won't get you a job, but will help you get job interviews, 500 startups can open the door to conversations with high quality investors.
- Founder Network: One of the more underrated aspects of the accelerator is the bonds you'll develop with your fellow founders. Founding a company is a unique struggle that your family, friends and even employees likely won't understand. Getting the opportunity to meet so many fellow founders working through similar issues was inspiring and allayed some of the loneliness that can creep in when you're working in isolation. The kinship created from the shared founder experience helped foster bonds that will last a lifetime.
- Culture: A unique aspect of 500 Startups is the effort they put into establishing a vibrant culture. Being a 500 Startups company is a lifestyle. You will work hard and you'll be sure to have fun along the way. 500 does a great job of breaking up the endless hours and grind by mixing in social events that integrate the startups and staff to keep energy level up.
- Product: As the CTO of Govlist, I'll admit I'm biased in this area as I'm constantly thinking about engineering and product, however both my co-founder and I agreed that the resources available for improving product were sorely lacking. 500 Startups seems to select for companies that are post-product and often post-revenue, so it could be their assumption that most startups have products that are, at minimum, good enough to sell. While this certainly was the case for us, we are always looking for ways to improve.
- Employees: This is my most controversial opinion, but I'll share it anyway. 500 Startups does a great job of inspiring and encouraging founders. It's a relentless and thankless lifestyle that is certainly acknowledged and celebrated by 500. However in terms of attitude toward employees, I didn't feel the same level of value was extended. Employees often felt like mere inputs into the formula for company building. Need to boost sales? No problem, hire a couple SDRs and if they aren't producing, fire them and hire a couple new ones. Need more engineering resource? Great, bring on a few remote devs at a fraction of market rate. This approach to employees is in direct opposition to my view. Employees are not fungible assets, they are the lifeblood of a successful startup. Invest the time and resources into finding the absolute best people, then do whatever necessary to keep them happy and motiviated.
Does 500 Startups Make Sense For My Company?
I think 500 Startups makes sense for companies that have a reasonably mature product and some semblance of product market fit. 500's approach to accelerating growth seems to begin with the assumption that these pre-requisites are satisfied. Once a startup has a product and some market share, tapping into 500's distribution expertise can turn that flickering spark into a raging fire.
In terms of industries, 500 seems best suited for B2B/enterprise focused startups. Startups focused more on user growth or pure technology plays would be better fits for accelerators like Y-Combinator or AngelPad as they are more product focused in their approach.
My checklist for whether 500 is right for you:
- You are a B2B or enterprise company or have a clear path to revenue.
- You have a proven product that is ready for distribution.
- One of your companies most pressing issues is sales or fundraising.
- You are based in the bay area or are willing to move here for the duration of the program.
For Govlist, we checked off all of these criteria, which is why 500 Startups was our accelerator of choice.
500 Startups is a world class incubator attracting talented founders from every corner of the globe. It has an incredible vibe crafted from the diversity and shared kinship of the startups and energy injected from the staff. The program provides comprehensive strategies for sales distribution, marketing, and fundraising. First time founders and founders not tapped into the Silicon Valley ecosystem will benefit especially from the program. While there is still room for improvement, the accelerator was certainly worth the investment for us. We significantly elevated the trajectory of our company and gained invaluable knowledge along the way.