February 12, 2016

Entrepreneurs: Here’s How to Nail Your Startup Accelerator Application

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Note from Megan: It’s that time of year again for the Civic Accelerator.  Back by popular demand, we dug up our Application Tips and Tricks Post from Cohort 4 and added a few additional examples and insights.  Enjoy!

For many startup accelerator programs, the written application is your first and only chance to prove why your venture deserves a shot.  Amidst all the other candidates swimming in the applicant pool, how can you ensure that your venture will stand out?

This April will mark the start of the 7th Points of Light Civic Accelerator program since our launch in 2012.  Over the past two years our team has met with several hundred social entrepreneurs and reviewed over 1000 business plans – some great, and many not so great.   During this time we’ve developed a finer sense of what separates the top ventures from the rest.

As the application deadline for our Spring 2016 Program nears (Friday, February 26th – don’t forget!), we thought we’d compile the most common application blunders and offer a few pointers to make your application shine brighter than the rest.  While anonymized, these are real (and really common) responses to questions on the Civic Accelerator application.

Mistake #1 – Don’t confuse market size with traction.

Stating a large market size or the gravity of the social issue doesn’t mean that your venture is poised to gain a slice of the market share pie.  More importantly, market size is not synonymous with demand.

  • The Application Question:  “What proof do you have that your customers are willing to buy your product or service?”
  • The wrong answer: “Waste management is a $200 million dollar industry, and 1M people are without proper sanitation services.  This is an untapped market ripe with unleveraged demand”
  • The fix: “In our pilot phase, we secured 300 users of our waste management system.  Of these users 20% renewed their subscription, and since opening our product to the public we’ve experienced an increasing rate of user adoption. If we can continue to grow at this rate over the next year, we will net $2M in recurring revenue”

No one can argue with real numbers.  If your product or service isn’t live yet, positive testimonials from customer interviews, pre-registered users, or results from product focus groups can also hint at potential demand.  If you haven’t interacted with potential users or customers, put the accelerator application on pause and in the words of Steve Blank, “Get out of the office.”

Mistake #2 – Believing you don’t have competitors

Even if you are the first to market with your innovation, the status quo is your biggest and most threatening competitor.  Not to mention, in many cases the status quo is a tolerable state of being and available fixes are not worth the cost.

  • The Application Question:  “Who are your main competitors, and what makes you different and unique from them?
  • The wrong answer: “Our community-based waste management system is the first of its kind.  We own all of the IP, and do not have any known competitors.”
  • The fix:  “Our research shows that convenience and acquisition cost are the biggest barriers to adopting any kind of advanced waste management system.  The existing solution, while it generates long term health implications, does not cost the user additional money or time.   Our waste management system is the first of its kind to actually generate supplemental household income, and is designed with cultural tendencies and existing user behavior in mind.”

First mover or not, you must demonstrate awareness of the other solutions to the problem (or why they haven’t been adopted). Even better, show that you understand how your target customer currently manages or deals with this problem, and why your solution is better.

Mistake #3 – Confusing a lack of seed funding as a challenge versus a symptom

Funding is not your biggest challenge.  All of the reasons why you haven’t received funding are your biggest challenges.  And that’s okay – you’re a startup!

  • The Application Question: What is your venture’s biggest challenge?
  • The wrong answer: “Our biggest challenge is financial runway.  We’ve had a hard time connecting with the right investors.  With a little bit of seed capital we would be able to successfully scale our venture.”
  • One possible fix:  “One of our biggest challenges right now is identifying the right channel(s) for expansion.  Our first pilot was a huge success, due in part to strong local networks rooted in years of personal relationships.  We know that this will not be the case in other markets. As we prepare to scale, it is crucial that we identify the right kind of strategic partners and that we are able to quickly and clearly articulate our value to these partners.”

Other great responses to this question include sharing the feedback you’ve received from funders and where you’re struggling to incorporate that feedback.  Accelerators can’t make investors write checks, but we can provide the tools and resources to test your business model, hone your pitch, and put the right scaling mechanisms in place in order to turn your venture into a shiny investment object.

More tips and tricks:

  • Show your inner Gumby –  I’ve never met a successful entrepreneur who said their first business plan was the right business plan.  In your application, find an opportunity to highlight instances where you demonstrated an ability to responde to feedback.  As Mike Tyson famously stated, “everyone has a plan until they get punched in the mouth”.
  • Can you play nice with others – For many impact accelerators, and ours in particular, peer feedback and collaboration are important program elements, in addition to coaching from industry leaders and mentors. What do you have to learn from others, and what learnings can you share in return?
  • Get in touch – Is the written word not your strong suit?  Then drop us a line!  Actually, drop us a line either way.  The opportunity to learn a bit of background before you click submit allows you to tailor your application to what we’re looking for, and gives us greater context when reviewing your application.
  • Better yet, get referred – A venture referral from a trusted mentor, investor, or program alum goes a long way (longer than you probably think).  For the Civic Accelerator, a strong recommendation automatically gets you past the first round of application review.  Among startup networks (especially in social enterprise), you’d be surprised how few degrees of separation there really are.
  • PLEASE be succinct.  Fluff has a place, but it’s not in your accelerator application.  Keep your open-ended answers to the point.  This allows reviewers to find the important information quickly.

Entrepreneurs, what else would be helpful to know about the accelerator application process?  Drop me a note at mchristenson@pointsoflight.org and let us know.  And don’t forget to apply for the Spring 2016 Civic Accelerator by February 26!

As a recovering entrepreneur, turned Marketing Manager for the Civic Accelerator, I love working and connecting with social entrepreneurs and startups. I also enjoy running, coffee and talking all things vegan.