A few months ago we got accepted into 500 Startups in San Francisco and were thrilled to taste the Valley style startup life. Being a European start-up, we had decided to join an accelerator with the ambition to switch our business focus to the US. Our CEO Olivier also wanted the team to live a unique bonding experience that he believed would be key for our startup in the long run.
We wrote this post as a team with the idea to help other startups get a better understanding of the pros and cons of participating in such a program – especially if you’re a non-US startup. Here is our take on that experience.
500 Startups Incubator Program
Let’s start with the basics! The incubator program was structured as such:
- Networking & Fun: the first two weeks are all about parties, drinks and opportunities to meet fellow startups and partners.
- Growth 101: you will get a crash course with the Marketing Hell Week to help you understand all the mechanisms of growth. It’s up to you to select what you need and experiment with your team to see what fits your startup model.
- Mentorship: each startup is mentored by two “Points of Contact” focused on getting your startup up to speed and its growth engine ready to scale as fast as possible.
- Fundraising: one of the goals of the accelerator is to help you raise money fast to sustain your newfound growth in the second half of the program. You’ll be able to pitch in your sleep after all the intense training and you’ll get one-to-one introductions to top VCs and Angels.
- Demo Day: this is the big event that closes the program! You’ll present all you’ve accomplished and pitch your startup to potential investors.
500 Startups has a one major specificity in comparison to other accelerators such as YC for example. You will have the opportunity to spend 4 months in an amazing co-working space located in the heart of the Bay Area among 35 other startups. And that’s fun. Seriously fun. We were the only French startup in the batch and it was amazing having such a home in the US where we could work, enjoy incredible buffets and relax from time to time. To this day, it’s still our little piece of heaven in California.
Build a rock-solid team
Life & work at 500 Startups is very intense. During 4 months, you share everything with your team: you live in the same apartment, spend the weekends together and begin to have no secrets for one another. There are fun parts such as seeing your teammates in dire after-party situations – we won’t spill anything here but we came back home with some pretty interesting stories! Some aspects are however more difficult to cope with as you do almost everything together and it can truly put a strain on your morale. You stretch yourself to your mental and physical limits which really brings pressure on the team dynamics.
It’s challenging when you start to burn out to find the resources from within and keep performing in such an environment. That’s where the rituals we set out from the beginnings truly helped us deal with the pressure and workload: our running sessions, Friday night dinners or weekend escapes out of SF.
Another challenge is trying to keep your team united when you are stretched across two continents and have to manage a 9-hour time zone difference. We left our small junior team in Paris (hello Tania, Justine & Kevin!) and we were worried the distance would erode our communication and performance. We tried setting up daily routines from the beginning to stay united and make sure every member stayed in the loop as everything was moving so fast. Olivier particularly wanted to maintain two meetings a day to discuss everything that was going on but it eventually created too much frustrations on both sides so we cut it down to just a short one focusing only on the essentials. Despite our fears at the beginning, we came to realize that we were able to function very well without over-communicating and we had a much smoother run once we started operating this way. It’s hard to find your rhythm but it can truly hinder the productivity of your team so try to set this right from the start!
The US & the 500 Family
As a non-US startup entering the program, we were in for a strong culture shock – and we don’t just mean we did not like the food (please don’t blame us, we’re French). When we arrived in San Francisco – naïve and full of hope I may add – we were proud of our product which amazed European customers… only to realize it was barely sellable in the US. The American market is more demanding and crowded with competitors that offered fewer functionalities but were champions at what they did. The customers were also quite different: they were more educated about this new emerging market of collaborative VOIP solutions and knew exactly what they wanted. After a few weeks trying to sell the product in the US, Jonathan could not bear hearing for one more time that not having this particular feature was “a deal breaker”. It was hard keeping up morale in this foreign land but we remembered in what state we entered 500 from the start:
“You guys at Aircall, you are underdogs. You’re not the smartest guys [sic] but you can make it because you’ll scratch your head against walls as much as need until you get what you want.”
– One of our investors told us before joining the program
And he was right. We were entering a whole new playing field and we needed to step up our game. So we scratched our heads and worked like madmen to give our product the minimal requirements to be sellable in the US. Our product roadmap was exploding with new inputs every day and it was tough making decisions and setting our priorities right.
This fast-forwarding of standards did not only concern the tech side. We had grown pretty fast before entering 500 and were confident we would scale up our growth strategy easily with the help of our mentors. Once again, we kind of forgot we were actually starting to play in a whole different league. Nemo, our mentor focused on growth, was one of the smartest, most focused and demanding person the team had ever met. And every week, after going over our progress review with him, we felt absolutely awful, as if we were fuzzy, unprofessional jerks. But with his guidance and by failing miserably every week trying out new strategies, we got significantly better, one very small step at a time. This paid off as we triple our MRR over our time in SF and have kept a 30% growth per month ever since.
Working among dedicated startups also impacts your way of doing things. Pierre-Baptiste understood that what differentiated European developers from American ones were not skills but a laser-focus on shipping. So when we decided to ship new integrations, he focused on shipping one “V1” per week over the course of two months focusing on the core pieces of code to get it done.
And yeah, we came in riding a donkey and left with the conviction that we were sitting on a unicorn. We just had to feed properly this donkey so it turns into a horse.. and grab a horn somewhere. Shouldn’t be too hard, right?
Startup Life: Work. Insanely.
As you start believing more and more in your startup, you become obsessed and you want to make the most of this experience. Pierre-Baptiste summed it up best the first time we landed in San Francisco:
“Guys, this is once in a lifetime. We have to give everything NOW – or never.”
And for the first 2 months, we worked like crazy. It was all about the work. In some way, it was electrifying: we just had such a surplus of energy. We continuously wanted to make our product better and reach more customers. Even when we were not actually working, we couldn’t help but try to find new ways to improve and reach out to a wider audience. As you can imagine, it eventually caught up with us and two months into the program, we were burnt out. The product had grown so significantly along with our customer base that we could barely handle it with our small team. And we were tired. That’s probably something we could have managed better, even if we don’t regret how it happened.
Something very interesting also happened as we grew as a team. We got a much better knowledge of each other’s work and struggles, from sales or feature development to fundraising. Xavier even had to go make a live demo of the product in front of 15 salespersons and realized how hard the sales team job could be – “Sales is not bullshit!” he kept saying afterward. Jonathan and Olivier understood better some of the tech limitations and how to make the developers’ job easier when handling new product features or customer support requests. Everyone learnt what everybody else was doing and this truly makes you more productive since you come to have a fuller picture of the inner working of your team as well as what everybody’s strengths are.
Fundraising & Life after 500 Startups
This was one of our biggest challenges. Of course, we were not aware of it at the time. When you think about it: we were at the heart of the Silicon Valley, had great traction, did Demo Day and rehearsed the pitch hundreds of times, had access to the 500 Startup’s network of VC and so many resources. Shouldn’t be too hard to find investors, right? We could not have been farther from the truth…
“It’s a numbers game. You’ll need to have a hundred meetings only to close 2-3 interested investors”.
– Said EVERYBODY
Olivier recalls a fireside chat with a (very) successful 500 Alumni explaining to the 30 incredulous startups of the batch that she completed 125 investor meetings before signing a term sheet. And actually, Olivier went on exactly the same number of meetings. 500Startups will give you a leg up and introduce you to 5, 10 or 15 potential investors but you’ll need to find your way to tens of others to get one to sign off. 500Startups will not push for closing at all costs or pushing valuation. You’re in charge. That may explain (with other factors like the selection criteria) that the average money raised by 500 batchies is lower than other top US accelerators, despite the quality of the program.
“It’s a Chinese buffet. You have everything you can ever need, but we won’t feed you. You take it. You leave it. Your choice. Your problem.”
– Marvin Liao, Partner at 500 Startups
We really tried to take it all in during our time at 500. Something great also happened towards the end of the program: we were selected to pitch at the TechCrunch Disrupt Startup Battlefield in SF. In the spirit of 500Startups, many co-batchies watched the live stream with the rest of the team in the co-working space as Olivier came on stage and pitched Aircall in front of thousands of people. But even though all the startups supported each other, we felt we did not truly bond together. Maybe we screwed up there as we were really focused on “our” Aircall and we made very few friends to be honest. However, any co-batchy can ask anything from us and we’ll gladly do it for them – and that’s most probably true the other way around.
Life does not stop after 500. You will really need a week to breathe after Demo Day and the 4 months of apnea you just lived but you’ll get back to steady work rhythm pretty fast. You have learnt so much that you can now implement all your new knowledge and execute your plans much better. When we came back to Europe, we did all we could to maintain our drive and share all our new learnings with the rest of our team. The way we think about our product or our growth has considerably evolved. We tried many different things in SF so we have more understanding in what works and what is simply not for us.
PS: In case you were wondering what Demo Day looked like…Check out this video!
PPS: And if you want to apply to 500, it’s here. Apply. It’s a f**** incredible experience!