In late 2009, when Gabriella Draney-Zielke started Dallas-based startup accelerator Tech Wildcatters, the accelerator was still a relatively new idea; there were only a handful at that time; by now, there are hundreds.
Soon enough, Draney-Zielke began to realize what all accelerator founders inevitably realize: Some startups admitted to the program were better than others. The best startups, especially, were willing to critically rethink their assumptions, particularly when it came to what customers want. Draney-Zielke recalls the case of Validic, a company now focused on aggregating data from wearable technology. The founders of Validic started with grand ambitions to change people’s behavior for the better—people who went to the gym, people participating in corporate wellness programs—but when they pitched various companies on their services, the companies weren’t interested.
Or, not quite. The companies were less excited about how to gamify wellness, which was Validic’s initial pitch. The companies were much more excited about something seemingly banal. Validic, along the way, had created a system that aggregated data from various fitness-monitoring devices. Companies had been having trouble pooling all the data in one place.
So the founders of Validic did something smart, recalls Draney-Zielke: they listened to their prospective clients. They scaled back their ambitions for the time being and focused on delivering what customers seemed to want: a fitness-data aggregation platform.
It might seem simple, but that willingness to listen to customers, that willingness to pivot, can be rare in the first-time entrepreneur. For every Validic, Draney-Zielke saw several startups simply unwilling to listen, to change course. So many founders coming through her program were simply stubborn and unyielding. "It almost always revolved around a technologist who refused to believe that everybody didn’t want to buy their product. They believed they’d built the coolest thing out there," she says. "They started with the solution." They should have started with the customer.
Now, roughly six years after starting Tech Wildcatters, Draney-Zielke says she thinks she’s found a way to improve the accelerator model, incentivizing more companies to behave like Validic—and more rapidly weeding out the ones that don’t.
The first thing Tech Wildcatters has done for its latest cohort of startups is to attempt to be more scientific about which applicants to admit. Over the years, Draney-Zielke had come to feel that the makeup of various personalities on a founding team leads a startup to thrive or die. She found a survey measuring "hard-wired work-based traits," and asked successful entrepreneurs who had been through her accelerator to test it. She began to focus on one data point in particular. "We were looking for people [for whom] their number-one thing is that they want to win. They want to win, and win at solving customers’ problems."
The other metric Tech Wildcatters focused on, says Draney-Zielke, is the relationship between a startup’s number-one and number-two person. "I’ll be honest, one thing we’ve seen problems with is people who come in and say, ‘We’re co-CEO’s.’ I’m like, ‘Oh God, there has to be one person making final decisions.’"
The other problem the revamped Tech Wildcatters seeks to solve is to make sure that founders aren’t putting the cart before the horse. Founders of a company shouldn’t rush ahead on product if they haven’t listened to their customers yet. And they surely shouldn’t worry about growth before they’ve built a solid, viable product.
In the past iteration of Tech Wildcatters, all the teams felt a pressure to be more or less at the same stage. "I’d see the entrepreneurs struggling with, ‘Why are we talking about this thing, when I’m three steps before this particular thing we’re talking about?’" she recalls. "It’s a little bit like our school system these days. They call it 'No Child Left Behind,' but unfortunately you hear people call it 'No Child Gets Ahead.' They’re just teaching to the middle."
So Tech Wildcatters has devised a five-stage process, with each stage focused on a different element of the company life cycle. The key is to make sure you nail the scales before you attempt the concerto. Tech Wildcatters has developed software in-house to help teams track their progress—and measure it against the progress of others. "It’s very gamified," she says. "You know who’s on the leaderboard for that level." The software has also created efficiencies that Draney-Zielke says will allow Tech Wildcatters to admit 100 startups this year. In previous years, they saw as few as 20.
Finally, and crucially, Tech Wildcatters has also altered the way it invests, again pegged to these levels. Previously, all startups admitted to Tech Wildcatters were given $25,000 at the beginning (in exchange for 8% equity). Now, startups receive $30,000 for the same amount of equity, but that money is spread out over the first several levels. At Level 5, another big prize may await: "Those who reach level 5 may receive $100,000 follow-on investment from the TW fund as a convertible note or as part of the next round," says TW's Clarisa Lindenmeyer.
Draney-Zielke says that one reason this new precision is possible is that there are simply more tools to measure progress than there were half a decade ago. Sales software has grown more sophisticated, making it easier to fact check claims—or hopes—about how likely it is that a given startup is on the verge of acquiring a significant number of customers. "Five to six years ago, this data was a lot harder to get," says Draney-Zielke. "Marketing automation and sales automation are a big deal right now," and it makes it possible for the discerning accelerator/fund to measure who’s succeeding, and who isn’t.
Perhaps the most innovative feature of the revamped Tech Wildcatters? The new leveling-up structure makes it so that aspiring entrepreneurs can dip a toe into the accelerator, rather than dive in head-first. "You might get through Levels One and Two and say, ‘This isn’t for me. I’m not ready to quit my job. Thanks for showing me what this is,’" says Draney-Zielke.
"It gives them insight into what it’s really like, as opposed to what they’ve read. People read these success stories, but not many focus on just how much hard work there is, and heartache, and everything else," says Draney-Zielke.