Crowdstart Capital acceleration program and innovation

Innovators and people talking about innovation.

How can companies go from talking about innovation to innovating?

There is a strong trend, especially in larger organisations, to try to further innovation by appointing Innovation Directors (mind the capital letters), Heads of Innovation, Innovation Evangelists etc. While the intention is good, it is simply very difficult to pinpoint how successful innovation can be introduced and integrated into a very long tradition of doing things by the manual. Does that mean that more innovation is happening? Do the people responsible for spurring employees to “think outside the box” actually change culture or do they one day find themselves playing cajón in a giant drum circle of executives wearing black turtlenecks? (Note: from a real life situation, without the turtlenecks).

We at Crowdstart Capital don’t pretend to know the answer to these burning questions, but we can say that the need for innovation is not receding. It’s more likely rising exponentially with the emergence of new technologies and concepts such as convergence or game theoretic advances, which require a new understanding of the future of society. By changing perspective, applying concepts from other fields to problems previously unsolved (like game theory in Bitcoin or physics to evolutionary biology) or simply taking a moment to recognise already existing ideas, groundbreaking innovation can be achieved.

The hard selling point for many investors in our digital token sale is how we develop companies and promote innovation better than corporate incubators or accelerators. There are two reasons why I believe in our investment hypothesis: 1. Our well-developed and customisable acceleration process, and 2. Our direct connection to and understanding of corporate needs. Below we will outline the five steps of our acceleration process:

Phase 1. Selection
Based on industry criteria, CSC sources and selects startups in the following industries: 

  • Industry 4.0 (IoT, Automation, Supply Chain)
  • Energy (Solar, Wind)
  • Legal Tech (AI, Compliance)
  • Healthcare (Data Accessibility, Security)
  • Space (Earth Observation, Satellites)

Our selection is based on three parameters:

  1. Product – feasibility, innovative-ness, market-need, location, etc.
  2. Team – vision, expertise/competence, “coachability”, i.e. communication and cooperation skills, diversity, etc.
  3. External factors – current CSC portfolio, industry needs, legal aspects, etc.

Phase 2. Onboarding
Aligned with industry requirements, we onboard the new startup into our acceleration process. We make an in-depth assessment of the technology, vision, financials, etc. in order to accurately adapt the following steps of the process.

Phase 3. Product Development
As a response to Phase 2, in close collaboration with the startup team we develop the product using agile methods. Collectively, we have decades of experience of developing scalable products from scratch. This experience will be put to work for and taught to each startup. The product development is constantly being correlated with strategy and vision of the future exit partner.

Phase 4. Matching
As a final reality check, we match the needs of our corporate partners with the product developed during Phase 3. If needed, we go back to the drawing board and adapt, if not we proceed to Phase 5.

Phase 5. Exit 
In the guided sales process, we leverage our experience in private equity, venture-funded firms and as investors to create the maximal value for all parties. 

Using this process, we attempt to leave innovation in its natural environment, the entrepreneurial and curiosity-driven world of startups. Without altering the habitat or motivation for startups to realise their vision, our goal is to aid them in their hard work.

Guiding more startups to successful exits

Most of the new business ideas I have are nonsense. They come up; I instantly like them, I discuss them with whomever I can find – until I realize that they aren’t half as good as I thought they were in the beginning.

Having been an entrepreneur for more than 20 years, this insight is an easy one – in the late 90’s, that was much harder to accept. Maybe it’s a matter of wisdom of age, or just the fact that today most key performance indicators of the startup exosystem are common knowledge: VCs must agglomerate quite a bunch of portfolio companies until one of them proves to be the exit star that cross-subsidizes all others and pays for the complete fund. Then, there are well-known startup techniques, such as agile business development, that allow for a lean approach, minimizing costs and risks of wrong development paths.

In other words: the startup world has become more transparent, better known, more mature. And, yet. Despite these myriads of mentoring classes and acceleration programs and these libraries full of How-To-Found-A-Business-Books, it seems that the gap between a startup’s plans and expectations and the market’s needs has not diminished much. Each day, I read about startups with ideas I don’t grasp even after thinking several times about them. Sure, it could be my fault, lacking some fantasy like everybody before Steve Jobs presented us the iPod. But, I’m not alone: well-respected entrepreneurs and investors are telling the same story: the majority of startups produce useless products and services.

Since lamenting never makes any sense, there must be a way to change this imbalance. Some aspects of the typical startup process should be adapted to allow a more professional, streamlined way of leading a startup to a successful exit. This is exactly what my colleagues and I are trying to achieve: to bridge the gap between a startup’s precondition and the need of a real, existing consumer, or corporate business partner, respectively.

With Crowdstart Capital we combine our experiences as entrepreneurs, investors and top managers, as well as our existing business with leading industry companies and guide Blockchain startups in the fields of Industry 4.0, Energy, LegalTech, Helthcare and Space on their way to exit. We will ICO in November and start investing in Blockchain projects right afterwards. It will be a fascinating journey – if you feel addressed, come and speak to us.

 

A Guided Tour To Exit – Bridging The Gap Between Startups And Corporations

During the last 20 years, I have co-founded (and sold) several companies, among them the online travel portal travelgate , the social news community YiGG,  the app development agency AppAdvisors and the blockchain solutions provider Datarella. Most of these businesses have been positioned in the digital sphere which means that although they have been active in different markets they faced similar challenges regarding their transformational processes from 0 to 1.

If, as an entrepreneur, you have been working in different industries, you always start as a complete newbie in the next new industry. Your initial lack of expertise, network and experience in that respective market, makes you essentially start from 0. This is tough one the one hand, since you are used to work in a market with well-known processes and entities, but on the other hand, this fresh start provides you with a very steep learning curve that always is one of the sexiest aspects of an entrepreneur’s life.

Why Startups Fail
From a startup’s position, a steep learning curve is essential for bridging the gap between the creative, often naïve startup world and the dry, down-to-earth, hard reality of a corporation, the asset sale, the exit. The ostensibly most prominent reason for startup failures is illiquidity. You can apply this very reason for any kind of company. But, what are the underlying reasons for illiquidity? Simply put, it’s the startup’s inability to match the needs of either their potential customers or their potential corporate exit channels. They don’t offer what their targets need.

When, being in my twenties, I pitched my first startup to investors, I was struck by their seemingly strange, old-fashioned and outdated requirements. Then, I was absolutely convinced of my and my team’s superior creativity and our ability to supersede old legacy systems with our outstandingly innovative and paradigm-changing approach. Nowadays, often working closely together with market leading big corporations, I see a clear gap between the offerings and expectations on the startup side and the needs and expectations on the corporate side. And I can understand both sides pretty well.

Mentoring startups with SUPERDRIVE
Having engaged in mentoring in the startup scene for some years I have developed mixed feelings in regard to the typical approaches of matching startups with corporations, such as incubators, accelerators, etc. I don’t know of one that could boast about success stories. I order to come up with a better approach, together with my partners at Datarella and Prof. Oliver Szasz from Macromedia University, we launched SUPERDRIVE, a light version of our idea of bridging the gap between startups and corporations: on a universitary level, we worked ourselves through the process of actively supporting amd forming a (student) startup project in order to get acquired by a corporation. The SUPERDRIVE project was designed a s proof-of-concept: together with student startup teams we developed projects that would have been acquired by companies if it hadn’.t been carried out by students whose plans were to finish their studies.

CrowdStart Capital
In early 2017, faced with huge opportunities arisen from the cryptocurrency boom, I decided to bring the PoC to the next level and launched CrowdStart Capital, a blockchain technology accelerator. CrowdStart Capital will invest in blockchain-related startups that are selected on the basis of their matching with and adaptability to the needs of corporations Datarella has been working with. CrowdStart Capital’s investment hypothesis is based on its ability to close the gap between blockchain startups and potential corporate targets with a short timeframe of about 12 months.

A Guided Tour To Exit
This guided tour to exit is what we see as the potentially most successful approach of startup incubation. If you are working in the venture capital industry or in a family office, don’t hesitate to get in contact with me – I’d be more than happy discussing the CrowdStart Capital approach with you.