How this Techstars Seattle class produced 3 unicorns – GeekWire
In 2011, the world was still recovering from the financial crisis a couple of years earlier. The startup economy wasn’t in full swing yet. SaaS, pre-seed, or even mobile-first weren’t part of the startup vocabulary. Heck, even GeekWire had just launched.
Still, in that year, TechStars Seattle 2011 just had its most remarkable cohort ever, and arguably the most successful accelerator cohort of all time, anywhere in the world, with three startups in that batch becoming unicorns.
I was involved in the early days of GeekWire when it acquired Seattle 2.0 that year, an organization I founded in 2007. I was also lucky to be part of the Techstars Seattle 2011 cohort with my startup, EveryMove, that I co-founded with Russell Benaroya.
It’s easy to look at the unicorns born during that program and paint a rosy picture of the early days and the easy path they took to get here, but you know the punchline: it wasn’t easy, and each of these unicorns found themselves near an early death.
This cohort represents 20% of all unicorns that ever went through the Techstars program. Y Combinator, the gold standard for accelerators, had four unicorns out of 106 startups that graduated through its program in that same year. Its best cohort ever, YC Winter 2016, has an impressive ten unicorns out of 125 startups, an 8% unicorn-rate.
Techstars Seattle 2011 had a unicorn-rate of 30%. Three unicorns!
This story wouldn’t be complete without mentioning Andy Sack and Chris DeVore, the managing directors for that program at the time. Both are accomplished entrepreneurs-turned-investors. They had a long history together. They were also very complementary to each other.
There were ten startups in that cohort. It was a diverse group of founders with a disappointing track record of women in the teams. Only two of the ten companies had a woman.
Five of the teams, including my startup, had modest exits. These included Reveal (Likebright), Vizify, GoChime, and FlexMinder. One of them ceased operations, Bluebox Now. And one of them is still operating, Smore.
We are left with three other companies, all unicorns now: Remitly (originally Beamit Mobile), Outreach (originally GroupTalent), and Zipline (originally Romotive).
The struggles to “unicorn-dom” for these three startups were many, with plenty of co-founder drama, pivoting, near-bankruptcy, plateaus, visa issues, and more. I won’t drill down into the details of those struggles, but it’s worth remembering a bit of their stories.
Remitly is about to go public via an IPO, which marks the sixth Techstars company to go public and the first for Techstars Seattle. Matt Oppenheimer, Shivaas Gulati, and Josh Hug did a superb job of fundraising, launching the product, iterating, and keeping it as close to their initial vision as possible.
Originally, Remitly was a mobile-to-mobile money transfer service for people to send money from the U.S. to the Philippines. It was clear the Philippines was an initial market to expand from. It wasn’t evident that some of the initial hypotheses of how people would like to receive the money weren’t on target. They had to figure out how to get the recipients hard cash on the other end. That turned out to be a big hurdle. Remitly wouldn’t have been the success it’s today if they didn’t identify and execute on that aspect of its service.
Outreach was the creation of Manny Medina, Andrew Kinzer, Gordon Hempton, and Wes Hather. Manny and Andrew were left hanging when their technical co-founder quit. They were that one team that was struggling to find the right idea. Believe it or not, they started thinking they were doing a flower delivery service.
They ended up joining forces with Gordon and Wes to create GroupTalent, pivoting to team staffing services – instead of hiring a person, a company would hire a team of two or more people at once. That went nowhere.
After being “lost in the wilderness for a while,” as DeVore told me, they pivoted to sales automation, turning into Outreach. This team was phenomenal in its ability to execute.
Romotive is now Zipline. Romotive was originally founded by Peter Seid and Phu Nguyen, two brilliant engineers who just graduated from college. Initially, they had a hand-size robot that you could control with your iPhone. It was a solution in search of a problem and a market, despite a successful Kickstarter campaign. It was going nowhere.
Keller Rinaudo joined them toward the end of the program. Keller did a superb job of pivoting the company into drone delivery of healthcare supplies in remote locations. Zipline, now based in the Bay Area, became a unicorn just a few months ago.
Nature or Nurture (or bias)
I believe there was something different about that cohort. I’ve mentored many accelerator cohorts over the years, and I can say this group of people was not only selected using a different lens, but we also did many things differently throughout the program. Yes, I’m biased.
It was the second cohort for Techstars Seattle, which meant the early kinks of a new program were addressed. I don’t have hard data about it, but this group of people skewed older compared to other cohorts. Some of us had done startups in the past, some of us had significant industry experience.
When I asked DeVore what made this group unique, he said: “The world was just coming out of a dark period and the only people willing to start companies at the time were the deeply committed founders who couldn’t not do what they were doing.”
It seems right. Back then, there was no glamour in building startups. The term “unicorn” hadn’t even been coined by Aileen Lee yet, and capital availability, valuations, and exits weren’t even close to what they are now.
David Cohen, the co-founder and chairman of Techstars, had a similar thought: “I think the key was the people,” he said. “Two of the three unicorns are not doing what they were doing when we picked the company. But the right people, with the right support, get to the right things.”
I vividly remember Sack quipping during our all-hands conversations about how “some of you were chosen to join the program not because of your idea, but despite your idea.”
The purpose of joining an accelerator program is to try to compress as much as you can during those three months. We worked long hours. Putting in the long days and long weeks was an acceptable “3-month sprint” in the startup marathon. Sack brought the tradition of every Wednesday evening, at 11:11 p.m., each of us would take a shot and talk about the highs and lows of the week. Many other Techstars programs around the world adopted this tradition.
We went out weekly for drinks, dinners, or to play poker. We would sit in each other’s pitch practice sessions and provide feedback. We were earnestly supporting each other, even though we were competing for the same investor dollars.
Since I was running Seattle 2.0 at the time, I was writing about Techstars Seattle often, boosting the companies on Twitter, and even providing a truckload of Costco snacks so we could work a few extra hours each day without having to leave the building.
As I reflect on those days, I think a combination of factors made it unique and successful. It was the stewardship of Andy and Chris, the maturity and cooperative mentality of the founders, and the bias of those who applied and those who selected the founders.
Marcelo Calbucci is a technologist and serial entrepreneur and the CTO of Hiya.