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An Ideal Startup Accelerator Program

photo 30 e1386203835423 An Ideal Startup Accelerator Program

Evernote Accelerator Cohort

A recent Techcrunch article talked about the startup accelerator trend and where it’s headed. But most accelerators feel very one-sided: Focused on mentorship and fundraising, without much structured guidance to improve the product or the team. This results in a flood of companies that look polished but lack substance. 

I’m often asked to help design startup accelerator programs, so here’s my ideal. This program is similar to some in that it includes mentorship as a primary component. It differs from many in that it places a heavy emphasis on the product and on coaching the team around good, momentum-building behavior.

The 3 Pillars of an Effective Startup Accelerator Program

  1. A Rock Steady Facilitator. This person needs to be someone who has been around the block a few times. If they don’t know the answer, they know how to help you find it. The facilitator guides the teams through a process, books special mentors or speakers, makes introductions, and, when necessary, counsels the founders in times of high stress.
  2. Business Model Canvas. This is a great way to get a snapshot of a team’s current vision on their business landscape. The canvas will inevitably change a lot over the course of a program, but you need to get a baseline. This should be revisited often, and at the end of the program a new one should be created, reflecting the now-current view.
  3. Product. This is the part that is neglected in most startup accelerator programs. We have seen numerous teams who had brilliant ideas, excellent software developers, sometimes even marketing-savvy founders, but they still didn’t know how to turn the sum of all that into a product that would have meaning for a human being. An ideal startup accelerator spends at least 50% of its time and effort on the product development (and customer development) process. This means understanding customers, knowing their needs and behaviors, and aligning those with the business vision. It also includes developing a proficiency in articulating hypotheses, creating experiments, and measuring the results.

Important Supplements

  • Market Sizing and Segmentation. Market sizing is voodoo, but it’s voodoo that can help you set realistic expectations about growth potential. And it helps a lot when it comes to getting investment. The work on the product will help teams identify who needs their product. Once they have that, they can go on to figure out how many of those people there are, and whether that market is sufficient to meet their business goals.
  • Sales and Marketing. This includes the basics of running a good sales call (for B2B startups) as well as developing an understanding of how things like email campaigns, or social media campaigns work, typical conversion rates, how to drive conversion, and so on.
  • Founder Legal Stuff. Many programs handle this with a single presentation from a lawyer, covering things like incorporating, equity, board resolutions, etc. First-time founders have a lot to learn and need to understand, and it requires more than a simple Q&A. In an ideal program, the  facilitator should know this stuff well enough to be able to give sufficient answers as they come up.  They should also know enough to call in a real lawyer at the right time.
  • Optimization. Teams should learn how to refine the things that they’re already getting mostly right. They should do multivariate testing and spend time improving the sales funnel (though the core of the product is always more important).
  • Showing traction. How do you know when you have traction? What does product-market fit look like? Teams should be measuring traction and evaluating product market fit from week 1.
  • Fundraising. Pitch practice is essential, but insufficient. An ideal startup accelerator program helps founders target the right investors, reposition the pitch for different types of investors,  scale the pitch to get the most out of a given context, and adapt the pitch for other important stakeholders, like partner meetings.
  • Resources. The best startup accelerator programs have loads of supplemental resources available (books, blog posts, videos, etc.) to help founders attack specific problems.

Logistics

The facilitator works more than full time, supporting the teams, both pedagogically and psychologically, and no one would be accepted to the program unless they were truly willing to put their heart and soul into it.

Interestingly enough, the workshops that we’re creating for luxr.co are very similar to the line-up of key topics I’ve listed above. This is not a coincidence. This startup accelerator program is based on what I’ve seen entrepreneurs actually need, and of course, so is our product.

Funny money buys no honey

 

Retail Metrics You MUST Track on Small Biz Saturday

This week is make-or-break for pretty much every retailer…

online or off, large or small. During a week like this, it’s all-hands-on-deck to make sales. You need to remember to measure what happens, so that you can manage your retail business better over the coming weeks. We use metrics so that we can know whether our marketing and merchandising practices are working. The idea is that you can make conscious, daily efforts to make each day better.

1. How Many People Come Through Your Door Each Day (acquisition)

Why it’s important: This is the baseline for any conversion metrics — of the people who walk in the door, how many bought something? What is the average purchase size per visitor?

Strategy for this week: Measure. Give your holiday sales associate a clicker. They should be out there greeting customers, and should be able to keep a count of how many people come in. Or, if you have a security camera, review the footage and count.

Screen Shot 2013 11 25 at 4.31.54 PM 300x226 Retail Metrics You MUST Track on Small Biz Saturday

We use 3M “painter’s tape” to set up a 2×2 sorting framework.

After Saturday: Brainstorm ways to generate publicity and increase walk-ins. Then sort the ideas on a 2×2 grid with axes labeled easy vs. hard and “likely to draw” vs.”unlikely to draw”. Next week, try the best ideas from the easy/likely area. Track the results, and the ones that are effective, double down on.

 

2. Ratio of Visitors to Purchasers (conversion)

Why it’s important: It’s not enough to get people in the door. You need to transition them from browsers to paying customers. This one is all about understanding your customer. Every successful big retail business knows what behaviors lead to a purchase. (For instance, “If I can get a customer to try on three items, they’re 5x more likely to buy.”)

Strategy for this week: At the end of each day, compare the number of transactions to the number of visitors. During the day, keep a notepad by the register. What items or price points are selling best? Who are they buying for?  Ask your associates on the floor to observe which items get picked up and carried around. You’re looking for trends — which customer behaviors seem to lead to purchases.

After Saturday: Take 30 minutes to review the numbers and debrief with your staff. What can you do to encourage the behaviors that seem to lead to purchases?  When you do that, does it have the effect of driving sales more?

3. Dollars Per Visitor (revenue)

 Why it’s important: This is not about making a hard sell on everyone who comes through the door. This metric is about knowing whether your daily experiments in marketing and merchandising are making a (positive) difference.

Strategy for this week: Each morning before you open, formulate a hypothesis (e.g., “If I keep hot spiced cider mulling in the break room, maybe it will smell really good and people will buy more stuff.”) and test it. The experiment can be about pulling in foot traffic (“Lights around the door!”), merchandizing your wares (“move the whangdoodles to the front”), or anything else you can think of that might leverage what you learned the day before about how to get the right people in the door, and what you can delight them with.

After Saturday: Same as above, take 30 minutes to review the numbers and debrief with your staff. Which experiments worked best? What have you learned about who your best customers are, and what motivates them to buy?

Holiday Kickoff

For small retail businesses, especially in the United States, December means the difference between a good year and a bad one. Even now, in the midst of all the chaos, you can be strategic. Find a way to pay attention to how many people walk in the door, how many buy, and what patterns in their shopping behavior might improve your metrics. Pay rigorous attention to these numbers, then experiment, keep careful records of results, and invest heavily in the techniques that produce results. Above all, understanding who your customer is and what they need will allow you to provide it to them again and again.

Sell! Sell! Sell! 

Improve Your Conversion Rate

(The following is a guest post from Luxr Coach and author of UX for Lean Startups, Laura Klein)

WhyUsersDontConvert promoimage Improve Your Conversion Rate

Check out Laura’s workshop on luxr.co!

So, you want to take things to the next level with your customers. Maybe that means getting them to give you their email addresses. Or try out your new product. Or even start paying you! Those are all outstanding goals.

The problem is that sometimes your users aren’t interested in your goals.

Conversion problems happen when you want users to move to the next level but for whatever reason, they’re not interested in moving. Often the instinct is to just throw something at the wall to see if it sticks: try something, anything! But this kind of thinking can lead to months of wasted effort. In order to solve a problem, you have to understand it first.

3 Reasons for Low Conversion Rates

Of course, you can’t improve your conversion metrics until you understand why they’re too low. Regardless of what you’re trying to get someone to convert to, there are really only three reasons why they won’t do it:

  • They don’t understand what you’re offering (your messaging is off)
  • They don’t have the problem you’re solving (you don’t understand your users well enough)
  • The product isn’t worth what you’re asking (your pricing is off, your assessment of the user’s cost is off)

Fortunately there are ways to test for each of these, and once you understand how to do it, you’ll find it infinitely easier to improve your conversion rates. While some of these tests are easy, others require a bit more work. All of them are absolutely worth the time if you’re having trouble converting. Testing your messaging can be as simple as A/B testing a landing page or some ad copy. Understanding whether people actually have the problem you’re trying to solve is much more involved, but can bear huge rewards.

Understanding why people aren’t converting is the first step to improving your conversion rates. knowing why doesn’t mean that fixing it will be easy, but at least you won’t be flailing.

(Laura’s workshop, Improve Your Conversion, will teach you how to figure out why users aren’t moving to the next level. It will give you a framework for understanding the root of the problem, which will help you move your conversion metric, and that will do wonders for your bottom line.)

…but I was gonna go to Tashi Station to pick up some power converters