Wednesday, 18 September 2013

Selecting the Finalists. What is happening now!

We're getting questions from startup teams about finance as well as the selection procedure. Time to put those points to Guus Frericks, CEO of Startupbootcamp HightechXL in Eindhoven.

How will you know if you’ve found the right team?

We are looking for breakthrough innovations. That means they have some kind of game-changing element, which has the potential to disrupt the whole sector in which they are playing. If that disruption is happening in a growing “end market”, then we know from previous experience, that this is exactly the kind of successful teams we’re looking for. We have a wide range of expertise, especially in entrepreneurship and finance in our core selection team. But, we’re not doing it all alone. We’re selecting the final 100 with the help of brilliant mentors who have signed up for our program.

And when it comes to the final 20, we’re doing something that is unique. We’re partnering with, a renowned firm of human resource consultants. They will assess each member of the team, looking at various aspects of their personality. That will help us judge how the founders will work together under the intense pressure that our program demands. This will be very useful for each finalist team, whether or not they are in the top 10. The report shows exactly the strengths and weaknesses present in each team. And when you know that, you can take action. It may seem strange to be bringing psychologists onto the High Tech Campus. But we know it works because we’ve done the same test on our own Startupbootcamp HightechXL team.  

In The Netherlands, when it comes to tech startups, the media hype is mainly about web and mobile, even though there are some really remarkable companies in more high-tech sectors. How is Startupbootcamp HightechXL different?

I believe everything is in place for a successful program. We are funded for three years, so this search for teams is ongoing. We’ve announced 8 areas of high-tech that are proving to be the fastest growth areas in the coming 5 years. As a start-up ourselves, we will adapt and develop along with the teams we bring on board.

We’ve made a decision to set the bar high from Day One. Teams need to show us a prototype of their idea that they believe is ripe for accelerated development. They also need to show that have a close-knit, complementary team to bring their prototype to launching customers. Our need for a hardware prototype makes us different from the rest of our colleague accelerators.

We’re also standing on the shoulders of giants. We’ve followed how others have built successful programs. We have similar experiences to Eric Ries, the developer of the Lean Start-Up methodology, together with Steve Blank. We believe that successful accelerators need to be run by entrepreneurs with the academic, business and government world’s feeding relevant expertise and support.

But we also realize that high-tech accelerators have different dynamics. Whereas teams can often bootstrap a sufficient runway to create a piece of software, building a sensor or a chip takes much more money upfront. We’re fortunate that in this area we have enthusiastic investors.

We see our job at Startupbootcamp HightechXL is to ensure that our winning teams get access to serious capital. We’ve prepared separate videos to explain access to money to startups. 

We know that teams in our sector need access to between 0.5 and 2.5 million Euro. We have all the experience in our Startupbootcamp HightechXL team to make that happen.

What is the state of the European high-tech ecosystem right now and what is its place of Eindhoven on the world "map" of high technology?

For the general public, Silicon Valley is the birthplace of social media and search engines.Most of the companies in this part of the Netherlands are well-known to handset manufacturers such as Apple, Samsung or Motorola. The speed of their connected devices is determined by the high-precision equipment developed by ASML in the Netherlands. In short, they enable the manufacturing of the chips found in 90% of the world’s smartphones. But the general public doesn’t know about this side of the story. These are not consumer brands. Intel often stickers on the side of PC’s saying Intel Inside. I believe every connected device could carry the slogan ‘enabled by ASML’.

But I believe that will change. This region in the South of the Netherlands is becoming known for breakthrough innovation driving the “Internet of Things”. Brain sensors, robotics, Lifetech, 3D printing, Cleantech, nanotechnology; all these kinds of technologies are going to impact on people’s daily lives. These ideas, products and services are all coming about as a result of disruptive thinking and doing; exactly the sort of ecosystem we’re building with a program like Startupbootcamp HightechXL.

What motivates companies to stay after the program?

The Netherlands is an excellent area to test market an idea. Recently, Elon Musk announced that the new generation of Tesla cars will be built in the city next to ours. So others from abroad are beginning to realize the potential of this region. And Holland has reciprocal tax agreements with a wide range of countries making it much easier to start an international company here than in many other parts of the EU, but also the US or Hong Kong. We know that tech start-ups are not focused on these issues – until they try to scale up rapidly.
In Europe, especially in the Netherlands, we tend to be more risk averse than in Silicon Valley. I believe that’s because many of the venture capitalists and angel investors come from a financial background. In California, many of the new VC’s have run tech companies themselves. But that balance is beginning to change here. I see more of our mentors and investors having very detailed knowledge and understanding of what it takes to build a new high-tech spin-out.

On Demo Day we expect around 300 investors to see what the 10 teams have produced after 3 months of being in a pressure cooker. We estimate that audience will represent €10 billion in capital and there is a hunger for good ideas and products that makes me confident. We’ve been encouraged that investors have come to us to brief us on what they’re looking for, not the other way round.

We’re doing everything to ensure that the ecosystem is right to encourage teams to stay in the Netherlands. There have been other success stories on the High-Tech Campus, like Gen-key or Civolution who have expanded to global markets, but retained their engineering base in Eindhoven. That’s proof that open innovation works.

We’re aware that money is an important factor in the equation. That’s why we believe it is our job as Startupbootcamp HightechXL to ensure there are paths to funding of between €0.5 - 2 million for each team by the time they emerge from the program in February 2014. Other cities like New York and Boston have shown us that this is important. I overheard a colleague describe our role as the “HighTech Headhunters of the 21st century”. I rather like that thought!

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