DEMO Europe: Erick Schonfeld Interviews David Cohen
The program on June 3, the first day of DEMO Europe at the Digital October Center, closed with a panel discussion featuring representatives from Russian (Yandex.Fabrika), Bulgarian (Eleven Startup Accelerator), Danish (StartupBootcamp Copenhagen) and American (1776) accelerator programs.
The session was moderated by Erick Schonfeld, executive producer of DEMO conferences in the US and former editor in chief at TechCrunch.
When the discussion was joined via video link by David Cohen, CEO of TechStars, Erick did not miss the chance for a quick live interview.
Erick Schonfeld: Hello, David! Where are you at the moment?
David Cohen: In Colorado, where it’s nine in the morning, incidentally…
Erick: … And in Moscow it’s already seven in the evening.
We are wrapping up a great day by talking with people who represent accelerators from around the world — primarily from Europe, of course, but we also have your colleague here, Evan Burfield from 1776 incubator, Washington DC… TechStars can call itself one of the role model accelerators. Maybe you could share your statistics with us?
David: Of course. Right now we have seven locations – six in the US and a new one that we opened on that side of the Atlantic, in London. In our six plus years of existence we have financed around 200 companies, about 20 of which have signed mergers…
Erick: What percentage survives?
David: Around 85-90%. We publish this data since it is easy to verify, and keep tabs on the status of each of our companies, so the data is up to date.
The fact that some of the companies that go through accelerator die off with time is just natural.
Erick: Listen, in the last few years there have been more and more accelerators created, probably thanks to the impression left by TechStars’ success and other accelerators, for example 500 Startups. Is there the danger that at some point there might be too many accelerators?
David: I don’t think so. First of all, there won’t be less talent, and I would even make the argument that it’s the other way around.
Second, existing accelerators — from what I’ve heard there are around 900 of them in the world right now — are often really successful working in local markets and drawing that attention to projects in the early stages of their development, cultivating and developing the mentor culture.
It’s great! We all teach people how to work, and for the popularization of our work new players coming onto the scene is a good thing.
Accelerators can never be looked at as some sort of evil. Of course, not all of them really earn their keep, and some close before long, but that’s more of a danger for their creators than the entrepreneurial community as a whole.
I am certain that the situation we’re witnessing is not just another bubble, as some may think, but a demand made by the ecosystem itself. That means that the majority of these accelerators will be successful commercially. And even if they aren’t, they will create a movement in the market, an approach I find impressive.
Erick: And what do you think, is an accelerator really such a boost for investment?
David: Of course. An accelerator is a marketing tool and a good way to demonstrate your company’s progress to an investor. Isn’t that why the whole process got started, when it comes down to it?
The Demo Days, where we present projects to potential investors, are happening by the hundred all around the States, it’s just physically impossible to be at every one. So let’s not forget that the accelerator isn’t everything: it’s all in the hands of the project itself, and the way they present themselves depends on them. Although we do our best to help with a top-notch presentation, of course.
Erick: I noticed that at TechStars mentors are more and more playing the role of investors for projects. Previously investors and startups saw each other for the first time at Demo Days, while it seems like now they are trying to meet projects earlier…
David: I think that speaks to the interest being shown in TechStars,,
although really that’s a fantastic model for all smart accelerators.
I like when investors themselves hunt for potential startups. And, of course, we do our best to exploit that moment, involving investors in the mentoring program as much as we can. That’s what I call “investing on the emotional level.”
Schonfeld Producer of DEMO, ex-TechCrunch
Cohen CEO and co-founder of TechStars
Burfield co-founder at 1776 incubator, Washington DC
Gurvits cofounder at Eleven Startup Accelerator
Yolkina Head of International Networking, Yandex
Buch Managing Director, StartupBootcamp Copenhagen