Wednesday, June 20, 2012
Interview with Sam Teller, LaunchpadLA
Story by Benjamin F. Kuo
There is a large menu of startup accelerators in the Los Angeles, but one of more established efforts in the area is LaunchpadLA (http://www.launchpad.la). The effort actually started as an informal mentoring program, but has grown and expanded to follow the accelerator model. We caught up with Sam Teller, who is directing efforts at the accelerator, to help fill entrepreneurs in on where the program fits in the world of technology and startup acceleration.
For readers, LaunchpadLA is all about?
Sam Teller: Launchpad is an accelerator in Santa Monica. We were founded in 2009 by Mark Suster from GRP Partners. For two years, it was a mentorship program, that worked with twenty three different companies, but did not have a fund, did not have an office, and didn't take any equity. It was really just something built for the community to help support entrepreneurs. Then, it turned out, all of those companies did really well. Nineteen of the twenty three companies were funded, and at this point, nine out of 23 have actually been acquired. The combination of that success, as well as the seuccess of Y Combinator and TechStars, led us to believe that Los Angeles would be really well served by an accelerator in that model.
Last year, I joined up with Mark, and we raised a small fund and opened up an office in Santa Monica, one block from the beach. We got over 400 applications for the ten slots we had open in this class, and we picked ten amazing companies. As of two or three weeks ago, that first group wrapped up, and we began the scouting process for the next wav eof companies that we'll take in. What we offer, is $50,000 in cash, in American dollars, and free office space for four months in the heart of Silicon Beach. More importantly, we give you access to a massive network of mentors, investors, and advisors. So far, eight of the ten companies in our current class have raised outside funding, and we're really happy with how it's gone so far. We're really excited for the next steps.
There are quite a few accelerators in town, how are you different?
Sam Teller: The first thing I think is it's great that there are multiple accelerators in Los Angeles. I'm very friendly with MuckerLab, Amplify, and Science. Although Science is a different model, it's a tremendous asset for our community. I tell any entrepreneur looking to do this, is you need to spend time with all of the different people you'd be considering. At the end of the day, the reason to make a decision is not a half percentage point here or there, or because of one mentor from their community who you feel is better at once place or more closely tied to another. It's really important to get to know the people running the program, so that you are personally comfortable working with them. You need to look at their track record, which is important at an accelerator.
Our current class has performed incredibly well. It's the first real accelerator class, and when we're all said and done they'll have raised $15 million in venture financing across all of the companies in the class. It's important to look at those states, see where their graduates and alumni are today. I don't want to say we're better than everyone else, but we've been around for awhile, we have incredible investors, incredible mentors, and an incredible track record. Forbes ranked us number five in the country. The other thing, is we're very focused on being the most entrepreneur friendly, by the numbers. We offer $50,000 for 6 percent in common stock, with no strings attached, which is very simple and straightforward. In the context of an accelerator, that's a very generous and entrepreneur friendly deal.
Where should companies be who are interested in working with you, and what advice would you give them?
Sam Teller: I'd like to say they should be more than a PowerPoint, and less than a Series A. We're not investing in ideas and trying to turn them into companies. We're investing in incredible teams that have built minimum viable product and need our help with game changing, bizdev deals, fundraising connections, or mentorships. What's really important is that you've built something. That's my first piece of advice. You need to build that minimum viable product. The second thing, is you need to make sure you're tackling a big and somewhat original problem. We don't get excited about derivative businesses, like yet another daily deal site, or another niche flash sales site. It's not that they can't be good as small businesses, but we are looking for entrepreneurs who have a discernable degree of ambition.
We also recommend to entrepreneurs to try and find a technical co-founder. It's not really the same when you're hiring a firm. You need to have someone on your team that is a credible, technical asset. That's very important. We know that is difficult, which is why it's that much more meaningful to have someone on your team who is a strong technical co-founder. Also, for the last piece of advice, make sure you're networking and getting out there in the community. To get any notice from any accelerator, the best thing is to have their current companies and mentors refer you. A strong referral from someone in the network will help them look extra closely at you.
What has characterized the most successful companies that you've seen?
Sam Teller: Great question. It may sound like a cliche, but the most successful companies have been the ones that are hustling the most. What I mean by that, is in a place like Launchpad, all day, every day, you're being bombarded by connections. There are visitors coming through the office, investors, entrepreneurs, you meet so many people on top of having the day to day task of running your business. It's really easy to not follow up on connections, to let that slip through the cracks. The people who have done really well have excelled in fundraising, and are the people who are most on top of those opportunities. You never know when someone really valuable will pop into your life, so having that openness to serendipitous interactions at an accelerator, so you have to have that hustle, energy, and persistence to make the most of it.
What drove the decision to move from an informal mentoring program to an office and program?
Sam Teller: We were partly inspired by what was happening at TechStars and other accelerators, and speaking to David Cohen and David Tisch, who ended up being our investors. There's lots of value of having companies together. A couple of things we've seen is when everyone is working together, that positive effect makes everyone work harder. No one wants to be perceived as a slacker. Everyone knows how much they have to do. We've created a heads down environment, where companies are not competitive with each other, but you've got serious, smart people in a productive working environment. At this stage, too, companies re small. They may or may not have a full time marketing person, or a mobile development person, as the case may be. In our case, comapnies like ChowNow have an incredible team, for example, Jason Iseman who has helped our other companies look at how to make the right marketing hire. Companies like Addroid provides resources for design. These collaborative resources they provide to each other are an incredible value. If you ask them, they would say they get a tremendous amount from each other and those resources.
One other thing we noticed, is we've been picking companies that work across a really diverse range of industries, and who are tackling a broad range of problems. The fact that none of those companies are remotely competitive was really valuable for us in bulidling that community, and that's something we'll strive to do in the future. We even had one of the CEOs call up their investor, and say hey, we know you're meeting with this other Launchpad CEO, you had better invest or else!
So when is the next class?
Sam Teller: The next class starts at the end of July, and runs until just after Thanksgiving. At the same time, we're flexible on the date. We never let an arbitrary timeline determine whether or not we can work with someone or not. We'll accept them early, we'll accept them late, and we're excited to keep meeting entrepreneurs. We're going to get another ten companies accelerated and growing through the next few months. The Los Angeles technology community is quickly growing, but it's still small. Although there are coworking spaces popping up left and right, and that's not a need that we'll try to fill, there may be other opportunities to help grow in the community, which is something we're also exploring over the next few months.