June 22, 2017
In 2009, when we first founded Datahug we did not know many other founders, investors or mentors who could help with advice or introductions to customers or investors. Equally, when we did manage to get that rare early introduction or connection, we had very little validation or credibility in the market to convince people they should trust us and work with us.
We had a huge access and credibility problem.
The Access Problem
First time founders usually don’t have strong networks in the startup ecosystem. They simply don’t know any experienced founders or mentors who can help with valuable mentorship and introductions to potential customers, partners or investors. They often have to build new networks from scratch, which requires an awful lot of energy, time and luck.
B2B founders especially know that relationships are everything, and that the right introduction at the right time can be a game changer to help them build momentum.
The Credibility Problem
“Hi, I’m Connor from Datahug” – “Sorry who are you? And what is a Datahug?”
In the beginning, customers have absolutely ZERO reason to trust you. Let alone even take a meeting from you. Enterprise customers are also very conservative and risk averse when it comes to working with startups they have never heard of and who have mediocre customer references.
How Techstars Helps Startups
Since joining Techstars as managing director of the SAP.iO Foundry, Powered by Techstars Accelerator earlier this year, I’ve had some time to think about how we overcame this at Datahug and how I believe the Techstars Worldwide Network helps entrepreneurs succeed.
Techstars helps startups through “engineering serendipity” which surrounds early-stage founders with 100+ mentors when it matters most to their early growth and success, and “lending credibility” by allowing founders to leverage their Techstars brand association to help our companies build early trust.
I call these two advantages, Hello and Halo.
Relationships are everything. A common fallacy in enterprise SaaS in particular is that businesses buy from other businesses. They don’t. Instead, what really happens is that a person (Mary) at Company A buys something from another person (Ingrid) at Company B.
Therefore, it should be no surprise that building relationships with early customers, partners, investors and potential hires is one of the most impactful activities B2B founders can do. This is why at the core of every great accelerator program is a strong and experienced Mentor Network.
At Techstars, we believe in the power of mentors so much that we have built our whole accelerator model around Mentor Networks. Within the first month of any Techstars program, our founders experience what we call Mentor Madness. An intensive 3 weeks where our teams have up to 100 1:1 meetings with mentors from our network who can often help with “advice, introductions, sales or investment.”
Typically, it could take a founder years to meet so many highly supportive mentors who have a #GiveFirst mentality (people who ask ‘how can I help’) and genuine experience in either a specific domain that is related to the founder’s company – whether it be potential customers, angel investors, or experienced founders who’ve experienced and overcome the same challenges facing your startup.
Access to these mentors is a game changer for our companies. Founders typically build networks and insights that would have taken them two years to achieve outside Techstars. By helping engineer serendipity and hundreds of warm ‘hellos’ we help our companies #DoMoreFaster.
The Halo Effect
“Hi, I’m Connor from Datahug. We are an SAP.iO and Techstars backed company” – “Hi Connor. Interesting as we are a SAP customer… or we have invested in Techstars companies before…”
The Halo Effect feels like you’re standing on the shoulders of giants and it’s nothing short of a game changer. If you have ever done sales, then you know the importance of reference customers or brands to help establish trust and early rapport. At Datahug, when Salesforce invested in us they brought us no real clients or direct deal flow.
Instead, they gave us huge credibility in the marketplace and really helped us ‘earn the right’ to pitch and ultimately convert more contacts to leads and eventually more customers.
As we built momentum and secured more global brands, we then expanded our pitch to include things like “We also work with Deloitte, Qlik, Optimizely, Silicon Valley Bank etc…” It’s why you always see client logos plastered over every SaaS companies website or investment deck.
Ultimately, founders and investors know that logos and brand association matters and credibility matters. Techstars and SAP are probably two of the biggest global brands in venture capital and enterprise Saas respectively (in fact, SAP is also well known in the VC industry through its Sapphire and SAP.iO funds). Not a bad resource to have on your side!
Read more about accelerator programs at Tech.Co
This article is courtesy of Techstars, the best global ecosystem for entrepreneurs to bring new technologies to market. From inspiration to IPO, Techstars empowers the world’s most promising entrepreneurs throughout their lifelong journey by providing a global ecosystem made up of tens of thousands of community leaders, founders, mentors, investors, and corporate partners.
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