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The University Tech/Startup Gap Fund and Accelerator Summit
- 20 in-depth gap fund/accelerator program reviews
- Breakout and group discussions on common challenges
- Corporate and Investor partnering panels
- Networking web-site and associated materials
As companies scramble to adapt their businesses to a world of remote working and isolation, startups vying for investors’ cash and mentorship are facing a new world order too. Intel Ignite, a 12-week accelerator program led by Intel in Tel Aviv, today announced the 10 startups that will constitute its second cohort which is scheduled to start on April 19, and revealed that the entire final interview process for selection day was carried out remotely. Moreover, with the second Intel Ignite intake set to kick off in less than three weeks, the whole program itself will also be conducted online for the first time.
Intel launched its Ignite program last year, with a focus on early-stage startups working on key industry “inflection points,” such as artificial intelligence (AI) and autonomous systems. Successful applicants receive mentorship from Intel and other industry experts, as well as a gateway to funding and other valuable resources. This year, Intel has to mix things up as the COVID-19 outbreak has forced businesses across the spectrum to embrace social distancing.
The initial 200 applications for Intel Ignite were whittled down to 70, which in turn was filtered to just 16, which were grilled over live video by more than 50 Intel executives, VCs, entrepreneurs, and others from across the tech ecosystem to arrive at the final 10. “There were 16 startups, 5 physical rooms with large screens, webcams, Jabra speakers, disinfecting gel, and 60 judges using Zoom,” Tzahi Weisfeld, Intel Ignite’s general manager, told VentureBeat.
Many have argued that the COVID-19 crisis will lead to a permanent shift in working culture, with remote working embraced more broadly and many conferences transferring to the digital sphere — indeed, Microsoft is already reportedly planning to take its 2021 events online.
So could COVID-19 lead to a similar trend in the startup accelerator sphere, and will it use Zoom and its ilk for future selection processes? “It’s too early to say — there are clear advantages and disadvantages,” Weisfeld said.
According to Weisfeld, the virtual selection process was more orderly and proceeded more quickly than the typical in-person process. “One of the lowlights of physical selection is the ‘herd effect’ or ‘bandwagon effect,’ where one vocal person in a room influences others with their strong opinions,” Weisfeld continued. “In the virtual setting, this has less of an impact. The virtual scoring [also] requires more detailed notes to be taken — we are left with much better feedback notes, which we clean up and give to the startups so they can learn from the process.”
But for every yin, there is a yang, and Weisfeld added that some of the startups didn’t perform as well as they expected on Zoom compared to how they may have done in person. And one of the big values of the program for startups, as well as for mentors and judges, is the opportunity to mingle and interact with other people. “Having the virtual session eliminates the networking opportunity, or makes it much harder,” he said.
Another potential downside, according to Weisfeld, is a general lack of intimacy, while reduced observability impacts mentors’ ability to read non-verbal cues.
There are potential benefits to running more parts of startup programs virtually, though — by reducing travel, it could save money and be better for the environment. Whether COVID-19 sparks a total overhaul of how startup accelerators operate remains to be seen, but it could change some aspects of them depending on how “successful” these initial efforts prove to be.
Intel Ignite is having to make much of this up as it goes along, and it is fundamentally having to change how it works with the startups. It has to familiarize itself with the startups much earlier, for example, learning where their competencies and knowledge gaps lie. This will require much more time on Zoom, so it can pre-match startups with the best industry mentors.
“We are changing many parts of the program to fit the new reality,” Weisfeld said. “Succeeding in these programs requires a deep level of intimacy and trust between the startups and the program staff. If we don’t know their biggest challenges, we will not do a good job helping them solve these issues.”
Then there is demo day, where the startups gather to showcase the progress they’ve made, which Weisfeld said will require a “new, engaging model” beyond that of Zoom.
There will always likely be a requirement for human-to-human interaction, though, particularly when it comes to generating business and securing investments.
“No doubt COVID-19 will have a big impact on such programs, and we are adapting many parts of the program,” Weisfeld said. “Still, for sales, business development, and investment rounds, there is the need for in-person interactions.”
The changes that come about once the threat of COVID-19 subsides won’t be limited to accelerator programs specifically. But startups and investors may have to embrace this new world order, whatever it looks like.
“I believe we are heading towards a new world,” Weisfeld added. “Travel will be different, customer engagement will be different, tools will change. Even things like training people for storytelling will change as they will have to do more pitches in the future through a webcam. So, programs will have to adapt and will have a combination of physical and virtual interactions. We are going to experiment in one extreme in the next few weeks, which will help us evaluate what to keep and what to change back if and when we can.”
In California, Berkeley’s SkyDeck accelerator this week announced it had selected a fresh cohort of 24 startups from 11 countries to participate in its spring program, spanning AI, enterprise software, robotics, health, bioscience, and more. SkyDeck is among the most prominent university accelerators in the U.S., representing a joint initiative between the University of California at Berkeley’s Haas School of Business, College of Engineering, and Office of the Vice Chancellor for Research. It is partly funded by major institutional venture capitalists including Sequoia.
While SkyDeck managed to complete most of its pitch interviews before the big lockdown came into effect, a small number of interviews for its final round were carried out over Zoom as travel restrictions took hold. And as with Intel Ignite, SkyDeck will be operating its program entirely remotely over the next few months after California issued a shelter-in-place policy.
“All startups will be taking instruction and working with advisors, investors, and other collaborators via online technologies,” Caroline Winnett, executive director of Berkeley SkyDeck, told VentureBeat.
The six-month program started on March 30, and will run through to its scheduled demo day on September 15. What happens between now and then isn’t entirely clear — it’s possible that social distancing measures are reduced as the accelerator program progresses, but plans for now are very much geared toward a virtual world.
“We are using primarily the same standard tools seen in remote work anywhere — lots of Google, Slack, Zoom, and of course Krisp [a SkyDeck alumni specializing in noise-canceling],” Winnett said. “The tools are important, but they are standard. It’s the culture and community activities we really have to get right for this to work as well as it can.”
Given the tight turnaround required to transform a physical program into a remote incarnation, this will involve a trial-and-error approach, including “virtual coffee sessions” between mentors and founders, as well as forming online special interest groups based on specific subjects and creating lots of advisor engagement.
“SkyDeck has always taken pride in being a physical program — we aren’t just a fundraising camp looking to introduce investors, but we really focus on building businesses through the serendipity of connecting dozens of startups from around the world with all of the resources of UC Berkeley,” Winnett added. “So being all virtual is a novel challenge — we’ll be doing lots of experimentation.”
Chon Tang, investor and founding partner of Berkeley’s SkyDeck Fund, agrees that it will be a case of adapting as they go along.
“Daily huddles and bi-weekly check-ins make a great deal of sense,” he said. “We’re already extremely responsive on Slack, and I think we’re just going to make an extra effort to go the extra mile. This is all a grand experiment, and we will learn as we go.”
The lingering question remains, however, as to what SkyDeck and similar accelerators will look like once COVID-19 passes. Will things return to normal, or will there be a permanent shift how they run their programs?
“We are certainly going to learn quite a lot, and we believe that there will be a shift in expectations for how many interactions have to be in-person,” Winnett said. “We had already developed a robust platform that easily lends itself to remote. We already interview founders remotely for the first stage of interviews. The question is: What is the sweet spot of in-person vs. remote? We hope to discover that through this process.”
Remote working is hardly a new concept, and countless big-name organizations operate distributed workforces rather than centralized physical hubs. WordPress.com’s parent Automattic has long embraced this way of working, as have GitLab, GitHub, and Basecamp. Last year, payments giant Stripe launched a new remote engineering hub as it sought access to a bigger pool of tech talent. However, there is a distinction between creating a company that can operate remotely and one that is built remotely, according to Tang.
“I am of the opinion that while it’s perfectly possible to build a virtual company with a distributed workforce, it’s difficult to build a company virtually,” he said. “That is, I believe meeting advisors, investors, and strategic customers still needs to happen face-to-face. This partly explains the magic of Silicon Valley, and why it’s been difficult to stand up equivalent ecosystems elsewhere.”
As a global accelerator, a deeper push into virtual operations could help SkyDeck in terms of liaising with startups on the other side of the world. But its ultimate goal is to get them to “transition into a Silicon Valley-centered company,” noted Tang, which means a physical presence will certainly be desired where possible — global health conditions permitting, of course.
As for demo day in September, SkyDeck isn’t planning for a virtual event quite yet, but it is confident that it can pull it off relatively easily should the situation require it. It’s unlikely to be anything like February’s Demo Day, however, which included a live performance from the University of California’s marching band.
“I actually am less concerned about this aspect of the acceleration process — pitching on a computer display to thousands, versus standing on a small stage in front of a giant crowd of 700-plus people … it’s actually not clear to me that the digital version is all that bad,” Tang said. “But I really want our companies to be physically present in the Valley to hire, to sell, to recruit, and to have follow-on investor / partnership meetings.”
Intel Ignite and and SkyDeck aren’t the only accelerator programs to embrace virtual environments in these troubled times. Y Combinator (YC) hosted its W20 Demo Day online last month, and the S20 applicants for its next program will also be interviewed entirely remotely. The YC summer program isn’t due to kick off until June, which could leave enough time for things to proceed as normal — but any lingering social distancing stipulation or travel restrictions may mean that adjustments have to be made. A spokesperson said that it will make a decision on how to run the program as the current situation progresses.
Dreamit Ventures, a New York-based investment fund and accelerator that scales health, security, and real estate startups, today announced its fresh cohort of startups for its three 14-week programs. These will operate entirely online for the first time, though more than half of Dreamit Ventures’ programs already took place virtually. While startup founders were required to be present for some sessions and meetings, the companies were not required to relocate to graduate the program. Going completely virtual, though, is new ground.
“Dreamit never requires startups to conduct in-person interviews, even before the crisis,” Charles LaCalle, director of sourcing at Dreamit Ventures, told VentureBeat. “The majority of interviews take place via Zoom. That being said, the majority of founders who get to the interview stage have met with Dreamit team members in person at conferences, events, or for coffee chats. The pandemic will seriously curtail our ability to meet and build relationships with the founders who ultimately join our program. All venture funds are figuring out new ways to interact with founders, a key component of the sourcing process.”
Dreamit’s program also involves startup founders meeting enterprise-level customers in person, and many of them are required to install product proofs-of-concept on-site — something which will be difficult to do now. There are other factors that will also place program participants at a distinct disadvantage in a completely virtual environment, both as part of the accelerator program and further down the line when pushing for new business.
“Many of our companies have long sales cycles — six-plus months — and meet customers at conferences,” LaCalle continued. “Sales cycles will likely be longer than before, and founders will have to be creative finding product advocates and demo-ing their products virtually. All enterprise startups that require multiple stakeholders to buy into the product will be at a disadvantage, both from a coordination perspective and because budgets may be cut as corporates scale back.”
Besides evolving the operational side to counter the impact of COVID-19, accelerators are also adapting the scope of their programs to help fight the global pandemic. YC has said that it will fast-track promising COVID-19 startups through its application process, with a particular emphasis on startups working on testing and diagnostics; treatments and vaccines; equipment for hospitals; and monitoring and data infrastructure.
SkyDeck was keen to highlight that a number of new technologies are coming out from its portfolio companies, such as robotics for remote cleaning and supply chain platforms for locating and management medical equipment. This will likely be a strand that permeates most of the startup accelerators in the coming months, as investors look for companies that can address COVID-19 and other future health crises. “We are proud to support startups that will help us face the world’s biggest challenges, including some that will address the challenges of the coronavirus crisis,” Winnett said.
Dreamit Ventures’ managing partner Steve Barsh said that his company will be working closely with its new cohort of startups on issues related to surviving and thriving during an economic downturn. “We’re adjusting to a new normal,” Barsh said. “During the best of times, building startups is not easy. During difficult times, it’s even harder and startups must be on their ‘A’ game at all times.”
It’s difficult to say with certainty what startup accelerators will look like a year or two from now. It could be that they remain largely unchanged. Or, perhaps more likely, virtual communication and networking becomes a more prominent part of existing programs, without replacing physical setups in their entirety.
For now, though, startups accelerators are going all-in on “virtual,” simply because they have to.
“These are new and challenging times for startups,” Weisfeld said. “The easiest path is not to do anything and wait for coronavirus to pass. The most responsible thing to do is to realize there is a new reality and probably a new norm. The faster we adapt and help startups, the faster we can help them overcome their challenges. There are more challenges today than even 3 weeks ago, so this is the time for accelerators and startup programs to shine and help more than ever.”