One of the most commonly asked questions about PIE is how we select the startups which participate in the program.
Once they've completed the written application, submitted responses to our follow-up questions, and successfully completed a face-to-face interview, we weigh the following criteria to determine who we will invite to participate in the class.
Of course, it's an acronym. And it's another flavor of PIE.
If we've encountered one glaring misconception, time and time again, it's that accelerators should choose companies based on their idea or product. We couldn't disagree more.
While product is an important part of the recipe for a successful company, of far more import is the team. The people involved in the effort.
So our primary selection criteria is simple. It's people.
Now, "people" is a messy thing. It's full of qualitative analysis. And gut feeling. And personality. And charm. Sometimes you "just know." Other times, you have to be convinced. But it's always, always, always about the people.
And it's less about figuring out if the accelerator will be successful with the founders. Because within the accelerator, you're creating an artificial environment that enables people to be successful. It's more about figuring out if the founders have the ability to learn and grow within the accelerator environment. Because it's not easy. And it's not for everyone.
And maybe that's the point. Going through an accelerator is not about an individual building a product. Or about a team raising capital. Going through an accelerator is about teaching people to be better founders. And to be better peers. And mentors.
It's about building community. And trust. And that takes people.
As a side note, you'll notice we talk about "founders" throughout this section, rather than solo founders. We've run some PIE experiments with solo founders and — with rare exception — we would suggest steering clear of those folks in the accelerator environment.
It does no one any good to bring a stubborn, uncoachable founder into an accelerator environment. In fact, this can be the most caustic thing for everyone involved.
Now we're not saying that stubborn founders can't find success. They do. Quite often. We're just saying that stubborn founders can't find success in an accelerator environment.
So many accelerators stumble here. Choosing a class of founders who are unwilling to listen and incorporate feedback simply because the founders seemed confident and on the path to something big.
But when class are has even a single uncoachable founder, four things will usually happen.
- Mentors get frustrated.
- Other participants get frustrated.
- Accelerator staff gets frustrated.
- The stubborn founders get frustrated.
Accelerators are intense environments. And teams need to have the ability to divide and conquer. Everyone can't be in every meeting. It doesn't scale.
One of our favorite "tells" — which we intentionally try to draw out during the interview process — is when founders talk over one another. Finishing one another's sentences is one thing. That speaks to a shared understanding. Talking over one another is something entirely different. That means they don't trust one another. And even that hint of not being on the same page and trusting one another can be the thread that causes the whole thing to unravel.
Accelerators are a social experiment. They are a community experiment. A founder who is unwilling or unable to engage with peers within the program will have an equally difficult — if not more difficult — time engaging with mentors, investors, and future employees.
Accelerators are all about "not going it alone." Founders should be predisposed to this pack mentality, in the most positive sense.
Once you've determined you have good people in the mix and that the founders have a high likelihood of success in the accelerator environment you're creating, then you can start looking at the idea, product, service, or solution upon which the company is going to be built.
If you're building an accelerator that is focused on demonstrating a return on investment, there is one critical element of this selection criteria with which PIE did not have to deal. But if you're all about IRR, you will. And it's this:
The driving idea must not be about seeing a product come to fruition. The driving idea must be about building a scalable and sustainable business.
Why the distinction? Because there are any number of entrepreneurially minded folks who have no desire to actually build a business. What they want is to see their product idea come to fruition.
They may have formed a company around the product concept. And that product may have the ability to generate revenue. But that's a fringe benefit. They are driven by realizing their product vision.
And that, is very different from building a business. And it's an incredibly easy trap into which an accelerator can fall.
So push on this element. And there is one easy question to help determine what kind of founders you're dealing with: If you had to stop working on this product — or kill this product altogether — in order for the business to survive, would you do that?
Because products do not equal businesses. And sometimes business requires eliminating the product that inspired the formation of a company.
We refer to this as the "serendipity element." But if we called this section "Serendipity" it would ruin our acronym. Just like when the name of PIE was almost DIE.
There are any number of facets to the serendipity element, but they all revolve around excitement. And it fits our acronym a lot better.