Paul Orlando is an entrepreneur, co-founder and director of AcceleratorHK, a mobile startup accelerator. He is the author of Startup Sacrilege for the Underdog Entrepreneur.
I co-founded and ran a startup accelerator in Hong Kong, a city which was recently called the number one tech capital to watch by Forbes.
A new era of tech events has begun
We’re back in New York this November for the 4th edition of our growth-focused technology event.
That being said, Hong Kong is not yet what we’d call a tech hub. And neither are the thousands of other locations around the world that have emerging startup communities.
With a deeper look at the attention paid to stories coming out of tech hubs and an evaluation of your local strengths, you can determine whether your local startup community should do something a little different. In most cases, I bet you should.
Here are some examples of how not to copy and what to do instead.
Refrain from copying qualities that are superficial
Pitch events – having a selected group of startups pitch a panel of judges in front of a startup community audience – are sold as startup rites of passage, ways to raise money and ways to find customers… but they are rarely those things. They are much more often distractions from real work.
Your customers are probably not other startup people or the judges, so why spend so much time with these groups? The winners of pitch events are more often the organizers, not the startups.
Another superficial quality copied is the attention put on bringing startup world celebrities to local communities. Startup celebrities are high-profile people from the startup world – founders, investors, mentors – who have gained national or international renown.
I often see local startup communities try to attract celebrities to local events, even flying them out to participate and speak as though their presence would help change and grow the local community. Like the pitch events above, this is also not a good use of limited resources. The sense of wonder that these celebrities may help ignite is the least of your concerns.
Startup celebrities typically do not invest in the success of the many locations they visit, either financially or in terms of mentorship. Looking to celebrity founders is a short-term distraction. What happens after the event is over?
Instead, develop your own local heroes. These may be people outside of typical tech backgrounds but who understand local community conditions and who can make things happen. They understand local problems, can introduce you to customers or local investors.
Local heroes are more relevant to you than startup celebrities. And your local heroes will still be there tomorrow.
If you’re an organizer running pitch events and bringing in startup celebrities to speak, I ask you to consider the long-term impact that these activities have on your community and what you could do instead. For example, you could do the lower-profile but higher-impact work of connecting your local startups with customers, local investors and talent.
This may be less glamorous work but it has more of an impact on your community.
Play to local strengths and problems
The startup world can think similarly – and that can lead to bad decisions.
For example, I was contacted by a young entrepreneur. His country is going through a civil war. There are people in refugee camps and minimal access to computers or the internet. There are huge foundational problems in his community of civil war, famine, disease, human rights and of course limited communications technology.
Yet, he wants to build an online social network.
I’ve also heard from a technically strong team in a rural part of the developing world where many people work in natural resource extraction. Their families work in those industries too. There is low smartphone and e-commerce penetration.
They wanted to build a shopping app.
A doctor contacted me from a place with a shortage of doctors. He has years of experience in the medical field. When he contacted me, he had spent close to a year and much of his savings on the development of his startup. When we spoke he revealed what he was working on.
It’s an online gift giving service.
OK, so who am I to challenge these would-be startup founders if they choose to avoid the biggest problems and opportunities in their local markets? Who am I to challenge them if they want to work on issues outside of their expertise if they are truly passionate about their ventures?
But how can it be that there is such similarity between people who have wildly different local environments and those in the tech hubs of the US? Be too influenced by tech news and you become a tourist in your own home, more aware and interested in happenings of distant lands than in the glaring problems of your own backyard and those addressable by your own background.
What are the strengths and major industries of your location? Finance, logistics, agriculture, manufacturing, fashion, tourism? Play to local strengths and you can actually make your local community more diverse than the tech hubs.
Involving strengths like the major industries and domain expertise present locally and you will find people who typically haven’t participated in the startup world.
What are your local problems? Transportation, water shortages, pollution, obesity, safety, income disparity? Build for local problems and you have your first group of customers who can educate you on what you need to do.
Avoiding the consideration of local problems and strengths means that you limited diversity. This is why there are lots of startups addressing the not so crucial problems of how to share photos and find dates, but few addressing difficult problems like those listed above.
If you develop a local accelerator, don’t copy the “traditional” Y Combinator model
Consider if the typical generalist three-month program followed by a demo day is really right for your location. I doubt that it is. The well-connected elite accelerators may be able to work within that model (and even then, their startups’ success is far from assured). But merely copying the generalist model will backfire.
Instead, why not work within your local realities? For example, locations that are hubs of fashion, finance, logistics and so on, as listed above, can play to the local talent and investment in those areas and build focused accelerators in those areas, while also connecting the startups to mentors with deep industry expertise.
Outside the tech hubs, you may have no local investment community that look at startups. That means that simply running a demo day with the hopes of your startups finding follow-on investors or encouraging them to build companies that require substantial up front capital is not a good use of time unless they also are willing to leave and seek capital elsewhere.
Develop connections to your local (non-startup) community and businesses. These people can form your startups’ first customers.