Thursday, April 16, 2015

Last post on Collision Conference and Keiretsu Forum

Yesterday I wrote Hey startup parasites! We don't have time for you. In that post, I explicitly pointed my finger at the deceptive tactics used by Kieretsu Forum and Collision Conference to make money on startups. The people behind both of the organizations have contacted me to apologize and to defend their fees and legitimacy. Paddy G wrote lengthy replies here and here.

So to both, I want to be very clear - the big problem I have is not that you charge, but the way you mislead startups in the way you approach us, waste our time, create a false sense of exclusivity and conceal the fee in the initial conversations. If you were to make the fees you charge clear and explicit from the first contact, I wouldn't be blogging about either of you.

1. Keiretsu

You have told me today that the month of conversations I had, with not a single mention of the fact that you charge $4,500 for the right to pitch your angel investors, was just an honest mistake. You said that it never happens and I am just unlucky. You argue that the $4,500 fees that you charge are legitimate and provide value to the startup.

If that is the case, why not be upfront about these fees? There isn't a single mention of the exorbitant fee on your main Entrepreneur Page. Nor do you mention it on the application page. Another simple mistake? Or do you think it is not important? Or perhaps you realize how totally insane this fee is and how much of an outlier you are with this charge? Just glance at this nascent information sheet that I started; you are in the first place and that's not a good place on this sheet.

Considering the scathing coverage you got in Business Insider in 2009, claiming that you forgot to mention the fees on your website is stretching my very flexible imagination beyond its limits.

2. Collision Conference

You say that your website is very clear on the fees with:

“Each week we selected 25 early stage startups from around the world to exhibit for free as part of our Collide Program. The bigger tech companies pay $9,950 to exhibit, meaning exciting, disruptive, early-stage startups can afford to attend no matter what. All they will pay is a discounted price for tickets and Collide registration, and we’ll give them a free exhibition stand.”
No, that isn't clear at all. Let me highlight the clear parts to you "Each week we selected 25 early stage startups from around the world to exhibit for free as part of our Collide Program." To me, that says "free." Then you say "The bigger tech companies pay $9,950 to exhibit, meaning exciting, disruptive, early-stage startups can afford to attend no matter what." To me, that again says "free." Then you say "All they will pay is a discounted price for tickets and Collide registration, and we’ll give them a free exhibition stand" and this part is San Francisco fog. I see the "free" in there again. I don't see any clear fees you will charge. How am I supposed to know that this is you saying, "Friend, we have a bargain here - buy this shirt and the sleeves are FREE!"

Your other conference in Asia, Rise has this beautiful image:


And in the fine print underneath, the same text you quote above. No, this isn't how clarity is defined.
I am not a communications major, but you can simplify your messaging and get the pricing across more effectively if you get rid of the misleading "FREE" and instead say, "$1,450 if we invite you and you are selected."

And I need to remind you - I didn't come to you via the website. You reached out and said that you are interested in protocols.io. You had me present, asked questions, and told me that we have a chance to be selected to present because what we are doing is important and unusual. When I asksed how you heard of us, you said, "You were referred. We reach out to companies based on the high quality referrals from our trusted network of advisors." The gullible schmuck in me thought that it may be on the heels of our FREE appearance at LeWeb. Of course, once you "selected" us in your rigorous judging, we got the e-mail letting us know about the great honor of being selected, invited, and having the right to get the free exhibit table if we pay you a mere $1,450 instead of $10K.
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In summary, you both practice deceiving and misleading tactics. I have wasted enough time on your organizations, and I have no further plans to engage in a discussion. It is entirely possible that I am an idiot and simply didn't understand your words or didn't look in the right places. Instead of playing "he said, she said," I will just point people to the countless comments about Kieretsu (here, here and here) and Collision Conference (here and here). There are certainly lots of folks out there feeling the exact same way as me.
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[UPDATE 4/20/15. There are 34 chapters of Keiretsu. If each one screens 5 companies per month, as does the South California Chapter. That's 5*34*12 = 2,040 companies per year. Let's be conservative and say 1K screened companies. Yet, only 34 companies are listed in the 2014 portfolio. So the startups might have paid 1,000 * $4,500 = $4.5m to Keiretsu with over 90% of them losing time and getting nothing in return.]

Tuesday, April 14, 2015

Hey startup parasites! We don't have time for you.

I am a good bullshit detector. Apparently, not good enough to have sensed that Keiretsu Forum and Collision Conference are parasites. Congratulations to both of you for wasting my time! Well done! You both reached out, pretended to screen our startup, asked good questions, made me present, and then kindly gave me the honor and opportunity to spend thousands of dollars for no good reason.

About once every day or two, I get a spam from some pay-to-pitch event. They are usually easy to spot and trash. But the two above were special. The woman from Collision Conference interviewed me, asked about our business model and strategy, then told me she would encourage their screening committee to invite protocols.io because what we are doing is unusual and has huge social impact. A week passed, and we got the great news that we are indeed getting invited! Not only were we selected after their rigorous application round, but because we are invited, the cost of attending this conference would be reduced  from $9,950 to a mere $1,450.

I curtly replied that when we were invited to present at LeWeb, our $1,400 entrance fee was waived entirely. And the many other conferences that I attend when invited as a speaker, not only waive registration but also typically pay for the lodging and travel. I was going to let it go at that, but today's Keiretsu experience made me write this blog because these folks waste time that startups do not have.

The Keiretsu Forum contacted us a month ago to learn more about protocols.io. Then a phone call for a quick interview. A request to enter our information into their platform. Then a screening conference call were I presented our deck to two people. A week later, the next round where I presented to a bigger screening committee with 4-5 people on the call. Then a request to address some of their concerns before we move to the actual pitch to their investors. And finally, a "by the way" note that they charge $4,500 to pitch their angels. The full egregious exchange is below. 

Of course, as soon as I got this, I searched for "Keiretsu scam" on google and found two excellent articles on BusinessInsider: My Latest War: Angels Who Charge Startups To PitchRead and The Amazing Response To My War Against Sleazebags Who Charge Startups To Pitch. Yes, I should have done this search before taking the call, but I don't have the time. 

The irony is that my lack of time as a startup co-founder is what allows these parasites to waste more of my time. I am not going to get into a discussion of whether it makes sense to pay $500 to attend  an event where some VCs will speak for 20 minutes and then quickly escape, or pay to pitch angels who will most likely not invest in your startup, or pay an unknown conference to present your startup. Instead, I just made a very simple Google Spreadsheet to crowdsource information on which events charge and how much. I hope this will help us and others to avoid wasting time on the parasites.

[UPDATE 1: The comments on Hacker News in response to this post are very revealing.]
[UPDATE 2: Several people from Keiretsu Forum have contacted me apologizing and saying this was a mistake. Apparently they always warn about the fee from the first phone call. Except, they don't mention any fees on their main Entrepreneurs page or the Application page. If you think this is a legitimate reasonable charge, why not be upfront about it?]
[UPDATE 3: Keiretsu and Collision have contacted me to apologize and defend their organizations. My last post in response.]

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[Update April 16, 2015]
Collision Conference claims that they are very transparent that they charge startups $1450-$1950 after inviting and screening/selecting. Here is how their clear pricing page looks:

The only clear thing about it is "FREE."

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[UPDATE 4/20/15. There are 34 chapters of Keiretsu. If each one screens 5 companies per month, as does the South California Chapter. That's 5*34*12 = 2,040 companies per year. Let's be conservative and say 1K screened companies. Yet, only 34 companies are listed in the 2014 portfolio. So the startups might have paid 1,000 * $4,500 = $4.5m to Keiretsu with over 90% of them losing time and getting nothing in return.]]
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Forwarded conversation
Subject: Keiretsu Forum - ZappyLab
------------------------
From: <zzz>

Date: Tue, Apr 14, 2015 at 10:52 AM
To: Lenny Teytelman <lenny@zappylab.com>

Hello Lenny,

Hope you had a great weekend. After reviewing the presentation I had the following comments.

- "Both have high valuations, especially Zappy. Hard to determine market size for Zappy but I think if they get those niche eyeballs they are valuable to companies that sell them"


- "There was no talk about how much they expect to be able to charge. What they expect as far as timing of revenues, break even plan, revenues at exit, etc. they really need to explain and show proforma expectations."
If we can work on this, you are ready to present on our April forums.


Best,ZZZ


Keiretsu Forum Southern California
270 Bristol, Suite 200
Costa Mesa, CA 92626


A region within the worlds largest network of Angel Investors.  Keiretsu Forum Global has 34 chapters on 3 continents with 1400 accredited investor members. Our founding team of angel investor members, along with our partners and sponsors, are committed to growing the community of investors who are interested in funding entrepreneurial opportunities and providing valuable resources for their growth. Our goal is to grow our community of investors by providing an international platform to showcase the most promising opportunities, ultimately creating the right environment, a Keiretsu, for everyone's potential success with ROI.
Since Keiretsu Forum's founding in 2000, its members have invested over $460m in companies in technology, consumer products, healthcare/life sciences, real estate and other segments with high growth potential. Forum members collaborate in the due diligence, but make individual investment decisions, with rounds in the range of $250k-$2m. Keiretsu Forum's community is strengthened through education on angel investing, as well as charitable giving.   

----------
From: Lenny Teytelman <lenny@zappylab.com>
Date: Tue, Apr 14, 2015 at 4:30 PM

Thank you ZZZ.


Had a full day of meetings and will respond tonight/tomorrow.
To clarify, the first question is about the market size?


Best,
Lenny



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From: <zzz>
Date: Tue, Apr 14, 2015 at 4:34 PM

The first statement is from the valuation aspect and the second is the addressable market size.

Just to clarify, because I think I didn't write it down on any email, we do charge a $4,500 fee for the whole process of presenting and joining the network.

Best,
ZZZ



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From: Lenny Teytelman <lenny@zappylab.com>
Date: Tue, Apr 14, 2015 at 5:08 PM

ZZZ,


Could you kindly clarify? It is $4,500 to be paid by the startup?


Thanks,
Lenny

----------
From: <zzz>
Date: Tue, Apr 14, 2015 at 5:13 PM

Yes Lenny.
Best,
ZZZ

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From: Lenny Teytelman <lenny@zappylab.com>
Date: Tue, Apr 14, 2015 at 5:20 PM
To: ZZZ

I am baffled. How could you not mention it on the first phone call? How could you not mention it in the past month? That is highly inappropriate.


Lenny
----------
From: ZZZ
Date: Tue, Apr 14, 2015 at 5:27 PM
To: Lenny Teytelman <lenny@zappylab.com>

Lenny,

It was my bad, thought I've sent, but I've rechecked the emails and I didn't.

We are not charging you any fee right now, this is only if you want to move forward to the forums.

Best,
ZZZ


----------
From: Lenny Teytelman <lenny@zappylab.com>
Date: Tue, Apr 14, 2015 at 5:29 PM
To: ZZZ

I am glad you are not charging us now. Thank you for that.

And I don't think you will be charging us in the future. We are not going to proceed.
Regards,

Lenny

----------
From: ZZZ
Date: Tue, Apr 14, 2015 at 5:33 PM
To: Lenny Teytelman <lenny@zappylab.com>

Wish you the best luck.

Best,
ZZZ

Monday, March 30, 2015

Biomedical funding is broken; crowdfunding is not the fix.

Last week, I wrote Calibrating crowdfunding expectations – a post based on our experience running the protocols.io Kickstarter campaign. I shared that pre-launch, we had wildly incorrect expectations about the average backing amount. We expected $70-$100, but the real mean turned out to be $39. So we had to lean on our close relatives for help, and of the $54K that we raised, $28K came from just four relatives. In this post, I want to focus on the implications of our experience for research crowdfunding.

Crowdfunding platforms can work very well for pre-sales of popular items. Even in the case of our protocols.io, while not great for funding, it was very useful to give visibility to our effort. However, while projects on Kickstarter need marketing, science projects need funding rather than advertising. Moreover, unlike ZappyLab with thousands of existing users that we asked to back our Kickstarter campaign, most scientists do not have an easy network to appeal to for crowdfunding.

Based on our experience, I was concerned that researchers turning to crowdfunding were setting themselves up for a harsh month of crowdfunding education, with very little chance of successfully raising the research dollars that they so desperately need. I know that biomedical science funding is broken, but I don’t see how crowdfunding is fixing it.

Of course, our crowdfunding was aimed at scientists to support protocols.io (a communication platform), which is very different from the research projects posted on experiment.com (the leading site for research crowdfunding) and aimed at a general audience. Therefore, to check if our experience is consistent with that of the scientists running projects on experiment.com, I took a quick look at all biology projects on the site (84 projects funded at $3K or above; spreadsheet here). The average contribution for all of them was $94, very close to our protocols.io average of $107.

The problem is that most of the 50 projects had very few backers, and that means mostly funded by close friends and relatives, which strongly skews the average towards higher numbers. I plotted the average contribution as a function of the number of backers. Figure 1 below shows that the more backers a project has, the lower the average. For the most popular projects with more than 100 backers, the averages hover around $50 – much closer to the $39 that we saw when excluding the relatives.

Figure 1. Average contribution as a function of the number of backers of the project. Numbers are from all 84  biology projects successfully funded on experiment.com at $3,000 or above.

The projects on experiment.com, just as on Kickstarter, are all-or-nothing. That is, if a project does not reach its funding goal, it gets none of the contributions. As I wrote in my previous post, there are good reasons to structure funding campaigns this way, but it also creates an extraordinary pressure on the scientist running the campaign to somehow get it to 100%. I have spoken to a number of people who ran campaigns on experiment.com, and several indicated that they had to use their own credit cards at the end to make the campaign successful. Based on this, I hypothesized that projects raising close to 100% of their total will often be rescued by relatives as was our protocols.io or will be partially self-funded by the scientist. Consistent with this prediction, graphing the average contribution as a function of the percent of the raised funding target shows a strong bias towards inflated averages around 100%-105%.

Figure 2. Average contribution as a function of the percent of funding targetNumbers are from all 84  biology projects successfully funded on experiment.com at $3,000 or above.

I know personally Cindy Wu and Denny Luan, the co-founders of experiment.com. I like and respect both of them and know that they truly have noble goals and intentions. I am publishing this post because I think transparency and correct expectations are important.

------------------
Note 1. There are also philosophical reasons to question crowdfunding for research. The whole point of NIH grant committees reviewing and scoring the proposals, the point of HHMI funding innovators -- is to support good research and researchers. There are many problems with NIH funding and the selections, but as imperfect as these processes are, they aim to select good science. But crowdfunding cannot judge the merit of the proposal or the proposing scientist. Crowdfunding selects for scientists who are good at convincing the public to support them. Crowdfunding selects for projects that resonate with the public. As such, crowdfunding isn't well suited for supporting high quality research.

Note 2. If you are planning to launch a crowdfunding campaign, take a look at the experience of Jacquelyn Gill, which is remarkably similar to our experience.

Tuesday, March 24, 2015

Calibrating crowdfunding expectations

[TL;DR summary – we raised $54,600 from 506 backers in our Kickstarter campaign. It literally saved our startup and was amazing for visibility and marketing. However, our expectations of how much we could raise were wildly off. Of the total, $28,300 came from just four relatives. The all-or-nothing model at Kickstarter misleadingly skews the “average backing” to high amounts.]

A year ago, our startup ZappyLab ran a Kickstarter campaign for the creation of protocols.io – a platform for sharing and discovering up-to-date science methods. This was the first successful crowdfunding project aimed at researchers. This Kickstarter also saved our startup. We were bankrupt, deep in the “death valley” of startup funding, with no one willing to back us. The response to our project was overwhelming; that gave us the much-needed visibility, led to our first major contract with a reagent vendor and helped to convince investors to support us.

I want to emphasize the above again – the Kickstarter saved us. I am deeply grateful to the hundreds of people who contributed, to the bloggers who wrote about it, to the countless people who spread the word. I think Kickstarter is an amazing platform and am writing this post simply to help those who plan crowdfunding campaigns. My goal is to share so that others can better calibrate their expectations and run more successful campaigns.

Before launching our project, I did a lot of research to determine the feasible funding goal. Kickstarter stats show an average pledge is $70. There is variation by category, with technology projects at an average backing of $107. Several crowdfunding gurus told us to expect a mean at or above $100 because a lot of our support would be coming from our existing users who already love and value our company and tools. We thought we could get 400-500 backers, and so we set the funding total at $50,000. We ended up raising $54.6K from 506 backers; an average of $108 per person, right around the expected range. But averages are wildly misleading. The median contribution to the protocols.io Kickstarter was $20, and the true average closer to the median than it may seem.

Within two weeks of launching our campaign, it became painfully clear that even with 500 backers, we would be nowhere near the $50K mark. Plotting our curve, we were on the path to $20,000 total. Our estimate that we could get about 500 backers was on target, but the average pledge amount was less than half of what we expected.

The tricky part is that if didn’t get to $50,000, we would get nothing and everyone watching would see a failed campaign on Kickstarter. We panicked. That didn’t help. We went to our closest relatives and begged for help. By begging for help, I don’t mean the expected leaning on friends and family to back the crowdfunded campaign. I mean an “SOS”. In the end, four relatives contributed $28,300 of the total that we raised.

Of course, our campaign is unusual for Kickstarter. The true reward we promised was better and faster science; we did not have a physical product to ship in the end. It is possible that our experience is an outlier. On the other hand, 4/6 people who ran crowdfunding campaigns told me privately that they also had the exact same experience and were forced to beg parents and other relatives to get them to the target in the end. Given our experience, I expect that this is rather common.

Kickstarter’s all-or-nothing model means that a campaign that raises $48,000 out of the target $50,000 will get zero. I understand why Kickstarter does this. This protects the backer against a campaign that raises 10% of the required total, with no product ever delivered, but the money gone. I personally would not have backed the crowdfunded projects that I did without this safety. On the other hand, this also creates an extraordinary pressure on the people running the campaign to come up with the funds by whatever means are possible. Especially for startups like ours, when investors warn that not reaching your goal is a red flag, failure is not an option.

I doubt that we are the only ones to naively launch a Kickstarter with wrong expectations. I hope this post doesn’t hurt Kickstarter, and if it helps the people running the campaigns to set better targets, this may actually result in more of the projects succeeding. To that end, more details are below.

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[UPDATE March 31, 2015]

To determine if our experience is common, I looked at 30 projects in the Food section on Kickstarter, funded at $10K or above (data here). The hypothesis is that projects raising close to 100% of their funding target will frequently be in the save-our-souls mode as we were, begging friends and relatives to close the gap with enormous contributions. Indeed, projects funded 100%-110% had an average backing of $112 while projects raising 150% or above averaged only $65.
Average contribution as a function of the percent of funding targetNumbers are from 30 projects successfully funded in Kickstarter's food section at $10,000 or above.


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1. Distribution of all 506 contributions to protocols.io Kickstarter.


2. Distribution of the 502 contributions to protocols.io Kickstarter, excluding the four relatives who saved the campaign.


3. Distribution of the 486 contributions to protocols.io Kickstarter at or below $200.


4. The average was ($54,600-28,300)/502 = $52 (compared to $108 from all).

5. Of the 502 backers, 138 were friends and relatives. They contributed $12,121. That’s an average of $88. The median contribution from friends and family was $50 (compared to $20 from everyone).

6. Excluding the friends/family contributions, we got $14,014 from 361 backers, for an average of $39 – much closer to the $20 median.

7. Naturally, considering that this Kickstarter helped us survive, we are glad we did it. But if you are planning to run a crowdfunding campaign for marketing and outreach, keep in mind that it is far from trivial to pull this off. See my guide to crowdfunding here for a description of the required effort.


8. This is part 1 of a 2-part post. Next week, I will be sharing thoughts about crowdfunding for research (now published).

Thursday, March 12, 2015

Public Service Announcement: John Wiley & Sons, you are in deep deep trouble

A week ago, Wiley published a blog post celebrating 350 years of the academic journal and patting itself on the back for the unparalleled service the publishers have been providing to the scientific community: "Why has the scholarly journal endured?" Four people weighed in with their perspectives on why the academic publishing as conceived hundreds of years ago is so wonderful today. The top two reasons were that the journal provides metrics to judge the scientists and the research published and is a good way to filter out the sea of publications and decide what to read.

The entire post is a perverse inversion of all the problems in academic publishing, presented as good reasons to keep the status quo. It is so out of touch with the conversations and concerns inside the research community, it's jarring. But the real problem for Wiley is that this is not an isolated mistake in PR; this post is representative of the culture inside Wiley and perfectly encapsulates why this corporation is about to march off the cliff.

Everyone knows that past performance is no indication of future results. Many monarchies survived way longer than 350 years, but not because of the extraordinary value they provided to their citizens. And most monarchies saw a day which marked the end of their rule.

I have been interested in science publishing since 2003 when PLOS Biology launched. I have been actively talking to publishers in the past two years. While I give the corporate publishers a hard time and am convinced that it's hard for the publisher to innovate in general, there is something unique about Wiley. Unique in a bad way.

I know many people who are or were in executive positions at all of the major publishers. I know many who were in key positions at Wiley itself. One thing that comes across in conversations with ex-Wiley executives is that this publisher is deep in denial about the looming changes. The culture inside Wiley makes it seem like a Tea Party organization, with Nature and Elsevier as the Green Party radicals. For those who know the corporate publishing world, appearing conservative on the background of the other publishers is not a good distinction.

All my conversations aside, any outside observer can tell that the publishers see the writing on the wall and are desperately trying to figure out how to stay alive and what their role will be in the future. Hence Digital Science from the Nature Publishing Group, acquisition of Mendeley by Elsevier, and the acquisitions of Papers and Biomedcentral by Springer. (UPDATE March 18: Elsevier now refers to itself as a technology company, which is a major shift. From their recent report: "[This] reflects the transformation of the company to a technology, content and analytics driven business while maintaining the link with its proud heritage.")

I would love for someone to point me to any signs of creative thinking and attempts to evolve at Wiley. Alas, I think they are busier congratulating themselves on the great service and the wonders of the impact factor. Good luck Wiley.

Sunday, January 18, 2015

Why an Accelerator Can Save You

Chris Lynch, a partner at Atlas Venture, just wrote an article titled "Accelerators claim they are in it for the long haul — I call bullshit." Because he said a lot of true things about startups and venture capital, the article is rapidly making rounds in social media with "Amen! Someone needed to say that." However, despite the many truths, Chris reached a wrong conclusion and has dispensed some flawed and possibly damaging advice by calling most accelerators "wolf in sheep’s clothing.”

I don't run an accelerator. I am not an investor. But having been in startup mode for three years as co-founder of ZappyLab, I feel compelled to respond to Chris. Particularly, I want to focus on his statement "Entrepreneurship isn’t about raising money, it’s about building businesses and creating a return on investment."

The statement itself is 100% correct; it takes many years to build a successful company. But then Chris argues that because accelerator programs are only 3-4 months long, they can't help a startup in the long term, they can only focus on the pitch and raising money, and therefore are useless. What Chris forgets is that for first-time entrepreneurs, raising money is nearly impossible. And if you go bankrupt, no matter how great your idea, you won't have those years to build the company.

Startups fail for many reason. The biggest cause of failure is a bad idea, and the second-biggest is running out of cash. It may be hard for a partner at a big venture capital firm to appreciate just how difficult it is to get that cash because the partner's daily job is giving out the money. Luckily, as a founder, I have vivid memories of how close we came to bankruptcy, despite an amazing idea, team, execution and traction.

We came up with the idea of a GitHub/wikipedia-like site for science methods in January 2012. For a month, we tried to get someone else to build it or to figure out a way to do it on the side. By April, we knew we would have to do it ourselves as a serious startup. I approached several ex-bosses and asked them if they would want to be angel investors. We got a verbal "yes" and in May, my co-founder Alexei resigned as a CTO of another startup. Raising the seed round seemed hard, but in retrospect, I realize it wasn't too bad. Within a year, we got almost $500K of seed funding from wealthy individuals that somehow were connected to us. I didn't even quit my postdoc at MIT and thought that we would quickly build everything and I would manage to succeed at both the startup and my academic career.

But Chris is right, building a company takes a long time and is hard work. By spring of 2013, it became clear that we would need about a million to build and get traction. It became clear that I would have to leave academia and focus on ZappyLab full time. My family and I moved to Berkeley to join Alexei and to be in the right place for raising the capital. I was full of confidence, thinking:

We got half a million dollars just for the idea. It was a crazy risk for the angels as there was no product, no engineers, no anything except our desire to build this. How hard can it be now to get another million considering that I joined full time, we have assembled a great team, have built an amazing prototype that scientists love, got terrific traction and media/blog coverage?

How hard? Nearly impossible. That's because we had exhausted the angels that know us personally. The next round, you are talking to institutional investors and angels who don't know you. The bar to get funding is extraordinarily high. Don't be misled by the illusion that VCs are throwing money left and right for dumb ideas. Don't compare yourself to other startups that got funded with a worse idea, product, team, etc. You don't know why they got funded. Most of them have founders who had started companies previously, and that puts them in a completely different category. Don't forget that while Silicon Valley is full of cash, there are thousands of startups competing for it, and there isn't nearly enough cash to fund them all.

Throughout 2014, we burned through our savings, maxed out our credit cards, and ran a Kickstarter to stay alive. We had to build protocols.io with virtually no resources. We had to get the users without any cash for marketing. We had to pull off miracles to survive. We did, and still, getting funding was hard.

Out of the 2.5 years of ZappyLab, it's now just the third month where we are well-funded and finally know that we won't evaporate in 6 months. Being accepted into Berkeley's Skydeck accelerator helped us a lot. Our idea has the potential to revolutionize science communication and save society billions of dollars. Vaccines, climate change, aging, cancer research - the work that impacts everyone and everything - will move significantly faster because of what we are doing. It is a great idea that might have failed had we not gotten into Berkeley's accelerator.

Yes, there are good and bad accelerators, just as there are good and bad investors in general. If you are accepted into one, take a look at Seed-DB and talk to founders that went through it. Figure out if the equity you give up is worth it. There are scams out there for sure, but they are easy to spot. There are mediocre accelerators and there are amazing ones. Do your due diligence and if it's a great accelerator, don't be greedy - the 6% you give up may make the difference between having those years to build a company or not.
//////////////////////////////////////////////

Below are some more general thoughts on accelerators.
  • As mentioned above, accelerators are different. For example, Berkeley's Skydeck does not take equity, is 6 months, and provides an amazing office space, advice, connections.
  • In addition to mentoring and help with fundraising, a key value of being in an accelerator is having the other teams around you. The network of your cohort, the advice from other founders and the support will last long beyond the 4-6 months of the program.
  • Even a small investment of $50-100K from the accelerator can do wonders for your ability to raise angel and VC cash. Angel investors and some VCs often wait for a lead investor to give them confidence. The selection by and investment from a good accelerator can serve that "lead investor" role and facilitate your fundraising long before the Demo day.




Wednesday, December 10, 2014

Exciting Science Startups

I just flew into Paris for a single day of the Axon@LeWeb event. I presented our protocols.io, in a lineup with 14 other terrific startups. But no sane person flies into Paris, in December, to spend a day in a conference hall outside of the Paris everyone knows and loves. Certainly you don’t do it for a 10-minute presentation. Of course, I may be crazy, and all startup founders are to some extent, but I had a very good reason to attend and I do not regret for a second the crazy flying and exhaustion that I am experiencing at this very moment. No regrets for two reasons:

a. I support enthusiastically Victor Henning’s effort to showcase science startups. In a sea of interesting general-audience companies at LeWeb, there is no way that an amazing company like Publons (opening up peer reviews for all to see), can get featured at the main event. Therefore, it is important to set up the precedent for an event that highlights science startups to the right audience of investors, reporters, and others in the science space. I am glad Victor did it; I hope it’s not a one-time event; and I want to help it succeed as much as possible.

b. Researchers attend science conferences for the opportunity to talk to other scientists. We don’t go to hear a specific talk. The talks are nice, but the true value of the science conference is in the productive discussion and brainstorming after the sessions. The same holds true for a meeting of scientists who founded startups. As expected, the two hours of discussion prior to our presentations, and the 6 hours of Paris metro, dinner, drinks, and more metro after the event itself – this is the part that was truly exhilarating, fun, inspiring, thought-provoking, and productive.

Throughout the course of our day together, we shared perspectives on other science startups, not at the event, but held in high regard by one or more of the assembled founders. Here are some of the science startups we like:

Rubriq: independent peer review
Riffyn software for reproducible R&D
Agave BioSystems: research and development of biological systems, sensors, diagnostics, and instrumentation.
Chematria: machine learning algorithms for medicinal discovery
Quartzy: reagent management website
Twist Bioscience:  Synthetic DNA
Biomeme: hand-held thermocycler for field studies
Authorea:  collaborative