How MassChallenge aims to improve British startups
There’s more to tech startups than so-called “unicorns” – companies that are quickly valued in billions of dollars. They can also have a social impact, which is what John Harthorne is encouraging with MassChallenge. The startup accelerator has been based in Boston for the past five years, but extended to the UK for the first time this autumn.
Accelerators are designed to spur startups – either through funding, mentorship or other assistance – and normally take a slice of equity for doing so. Harthorne’s MassChallenge is different. It offers £500,000 in funding, but takes no stake in the 90 firms it backs. Indeed, while it’s helped startups find millions of dollars in investment, its real focus is on ideas with a social impact.
We spoke to Harthorne at MassChallenge’s London headquarters in Tobacco Dock, Wapping, to find out why startups are better together and why money is less important than contacts.
What do you offer startups?
We use a competition framework. In Boston, we give away a million dollars in cash prizes. In the UK, we give away £500,000. That’s the attraction – all the startups want money. They all think that funding will solve their problems, especially at the early stage. It turns out that’s not true, and it’s not a ton of money anyway.
They get four months of free stuff such as airline miles and software packages. Our goal is to act like their concierge and bring them whatever they need. If they say, ‘Dyson is my customer – I need to talk to its head of innovation,’ then we’ll go and try to find a way to figure out who that is, get their contact info and set up a meeting for the startup. We’ll try to hook them up with whatever they want, whoever they want.
We’ll try to get them a press and media opportunity, team members or funding. And we have over 200 mentors who volunteer to support the teams.
What are you looking for in a startup?
“It doesn’t have to be an investable company or even a profitable company.”
Our criteria is not the same as a typical accelerator model. We are looking for high-impact startups. They can be non-profits. It doesn’t have to be an investable company or even a profitable company. It’s something that’s going to change the world in a really positive way. That might also be a very profitable pharmaceutical company, or an education company, or a social-impact company that’s feeding hungry people in a new way that’s innovative and different.
How important is it to have startups all in one place?
A lot of our teams have never actually been able to work together because London is too expensive. Now, for the first time, they’ve been working together and they have made incredible improvements.
To help that, the open floor plan is really important for startups. They know so little and are so alone – like little orphaned babies trying to figure everything out on their own. And the only real way to do it is to work together as a bigger group. And so they have to talk to each other. One team will learn one lesson before the other team does, and then they can swap knowledge.
The average age of your founders is higher than expected, in the mid-thirties. Why is that?
Startups are easier to do when you’re young, because you don’t have a family. It’s a financially risky, very time-consuming and difficult thing to do. But you’re better at it when you’re older, because you’re smarter and more experienced.
The economic crisis has helped to bring in people. You have young people graduating from university who can’t find jobs, so they have to create their own. And then you have people at more established companies such as Oracle, Microsoft or IBM, who are either losing their job or are frustrated that they’re not able to operate with freedom or do what they want. They can reinvent their life again and reconnect their business to their soul.
I would say that’s probably the main advantage of the startup. It’s the closest you get to expressing yourself in the form of a business. In most larger corporations you’re doing somebody else’s work. You’re more of a cog in somebody else’s machine.
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