It is estimated that there are over 2000 accelerators worldwide, but the number is increasing exponentially. In order to get your startup boosted, you can struggle by yourself or try to be accepted into a mentorship-focused programme. It might be hard to get a handle on the pros and cons of accelerators, but the fact is that most of the startups fostered by them are successful.
In order to get actual feedback from someone dealing with the real-time challenges of steering a startup through an acceleration programme, we picked up valuable information from Tim Potočnik, one of the three founders of Eurosender, the door-to-door shipping platform valued at €3.6 million last year and with a 400% rate of growth since then.
Tim Potočnik (24, Slovenian): “Being successful is a cocktail of dedication, hard work, and finding new ways to do old things… and having a little money to grow”
Getting into an accelerator is, above all, highly competitive. For instance, the well-known American seed accelerator Y Combinator accepts approximately 1 to 2% of the startups which apply. The accelerators all follow pretty much the same model: they offer startups cash, they evaluate the companies that apply, and then they ask for a share of the profit. “They will own a little piece of your company. So if you become very successful, their piece of the company will also be more valuable and they will be able to make a great return from their early bet with money and the time they invested in you’’, notes Eurosender co-founder Tim.
Backstopping from an accelerator is definitely not to be taken for granted as it can provide you services such as mentorship, valuable exposure to investors and, of course, a worthy boot camp experience with others in the same phase of developing their businesses, with people struggling with similar issues and challenges. “The accelerator is very important, it keeps you in the right mindset. Not to be defined by limitations. You are not afraid to approach investors, and think globally”, explains Tim. He also considers that a good accelerator will provide lots of hands-on expertise in areas such as legal, finance, marketing, product development, or security of the product in order to go further.
Eurosender was in its startup phase when, 2.5 years ago, the three founders got into their first accelerator, ProSiebenSat.1 Accelerator, in Munich, after working from their homes and in a tiny office in Ljubljana. The idea behind Eurosender came to light after an annoying situation when Tim wanted to ship his luggage back to Ljubljana once his Erasmus mobility in Wroclaw was finished. As a customer, Tim had to calculate prices, distances and dimensions by himself from .pdf documents, a process which annoyed him further because the service was extremely expensive. Eurosender provides what Tim couldn’t find at that time: an easy way to ship luggage. “Our vision is to tell you the best option to get your item from A to B. All the rest we figure out for you, to provide you the best option and price ratio”, adds Tim.
Today, Eurosender is operating under the umbrella of another accelerator, Level39. Tim takes the time to explain that it’s an incubator for late stage companies as “it’s not like a common accelerator, here they bring in a venture capitalist every week that you can meet, and they will offer you their network if you need it”.
While accelerators make demonstrable contributions to startups’ initial growth, it is extremely important to make intelligent use of the startup ecosystem and pick the best options from the country where your business is located. Eurosender, for instance, has a presence in London, operations in Ljubljana, and is developing an office in Berlin. The reasons, according to Tim: “In London there is a lot of capital available, lots of investors and senior talent, but it is a very hard place to start because everything is so expensive. Ljubljana doesn’t have any kind of capital from investors or private equity funds, but offices are really affordable and there is a great supply of talented young people.” As for Berlin, Tim finds that the city is a good middle ground where there is a lot of capital for investment and everything is quite cheap. “We are trying to take the best from these three cities”, concludes Tim.
Over the past 2.5 years, Eurosender raised €800 000 in cash, and 24 employees are currently holding the reins. The company is presently operating in all 28 EU countries but is becoming locally focused on specific markets. Its success is all about providing an easy-to-access service that everyone needs more or less frequently: sending luggage from point A to point B. At 24 years old, Tim is aware that “being successful is a cocktail of dedication, hard work, and finding new ways to do old things… and to have a little money to grow” as he has already attested.
Behind the Eurosender success story, there is definitely that cocktail of multiple factors. Launching a business idea can be very hard, but the next steps can be even more challenging. It is not easy to choose the most appropriate accelerator for your business (ideally a highly specialized one), nor is it easy to know exactly what you want to achieve within one, in order to embellish your startup’s CV and foster the growth that you want so much.