Yesterday I attended the Barclays Accelerator (Powered By Techstars) Demo Day in London. I was hugely impressed by the overall quality of ventures presenting. I am giving ratings here, but even a low rating like 6 would have been a 9 in most pitches I have attended in the past. This shows that the two levels of filter in the Techstars process works sell:
- 340 Applications down to 11.
- The 11 go through a 3 month intensive process.
I decided to create my own Top 3 out of this incredibly strong batch (that is 340 applications down to 3, what a Darwinian world we live in).
I ranked on two attributes.
1. Quality of Presentation. This might sound superficial but it is a proxy for quality of team, focus & execution. This is clearly totally subjective; it is only IMHO. I was looking for:
Strong opening attention grabber
Strong middle, real data, hold my attention
Strong end, make me want to talk to then.
2. Fundamentals. This is still pretty subjective as it is based on a quick pitch and, in a few cases, a one on one chat. I was looking for the usual things – big market, big pain, unique value proposition. My prejudices weight towards solutions for those left out by the current financial services world – the unbanked and under-banked – more than services that encourage the over-banked to spend a bit more. The latter can be great businesses, so this is subjectively what I relate to. However I also believe that disruptive innovation happens from markets that have been ignored by the incumbents, where even a partial solution is far better than what customers have now (and most startups launch with only partial solutions). I scored Fundamentals on 3 dimensions:
Size of Market
Amount of Pain
Amount of Innovation
I then added Quality Of Presentation to Fundamentals (equal weight) to come up with my own personal Top 3 score out of 10:
I want to stress that this is a personal weighting and that all were really strong.
Here are my more subjective and qualitative notes (including my earlier pre-meeting notes in italics):
Aire – Enabling financial access for consumers through a next generation credit scoring algorithm. (London, UK)
Lots of people left out by the FICO score. It’s a broken market. Lots of startups going after this
They did not present how they do the alternative credit scoring (maybe not enough time, maybe not wanting to reveal secret sauce).
Best opening line from the founder pitch:
“I am a reject”.
ClauseMatch – Providing a cloud platform for matching and negotiating master agreements for trading over-the-counter derivatives and commodities. (Arundel, UK)
What happens when OTC trading goes to exchanges? Does this require traders at Big Banks to change behavior?
No, it requires lawyers to change behavior. Chicken and egg problem. Need to change lawyer behavior en masse to lead to meaningful big data output.
They lost me until they talked about NDA as the simple entry point. That makes sense. NDA is now 99% standardized but both parties would like a simple database of who has signed.
Could also take off via Crowdfunding and P2P Lending platforms where clause standardization is happening.
Crowdestates – Creating a peer-to-peer secured lending platform for residential mortgage deposits. (London, UK)
It’s a problem every young person without rich parents can relate to. Got the problem, keen to hear the solution.
They seem to have thought through the details well (not added them here as this was from private conversation).
DoPay – Providing financial access to people through their corporate payroll service. (Utrecht, Netherlands)
Now I understand. Going after the 70% Unbanked, but those with jobs. Get paid via Stored Value Card rather than cash. Love it, great big problem, simple innovation, well presented, can change the world and make money.
Gust Pay – Making music festivals more cashless using NFC wristbands and smartphone apps. (Cape Town, South Africa)
Love the idea the idea of NFC wristbands instead of the inky stamp to let you back in (showing my age?). But….won’t Apple take this with iWatch?
This was the one that I was skeptical going in, but impressed coming out. At $1 per wristband, the iWatch is not competition.
Katalysator (Renamed Glimr.io) – Providing an in-store experience and payments platform, making it possible to send targeted messages to shoppers based on proximity to products. (Stockholm, Sweden)
I am the world’s most ornery shopper, so I don’t relate to this as a consumer, but I reckon this could do well as a business.
Basically, it is Retargetting offline, tracking you as you walk through physical stores. As a consumer I dislike this. I might think differently if it was helping small retailers (with whom I might value having a relationship) but it seems like they are going after the same old big chains that I really do not want to “have a relationship with” and that are already tracking me online.
Market IQ – Providing actionable intelligence for investment professionals based on both structured (company financials) and unstructured datasets (Social, News, Blogs). (Seattle, USA/Toronto, Canada)
A space I am interested in. Keen to hear whether they use XBRL.
Not XBRL. This is sentiment analysis. That seems a crowded space, very hard to differentiate, even with impressive technology (and MarketIQ does seem like impressive technology).
Impressive early revenue claim of $1m.
NoviCap – Enabling businesses in credit tight markets to quickly access growth financing by auctioning their outstanding invoices to investors. (Barcelona, Spain)
A space I am interested in.
I get the problem, it is a big one, but I did not get much more sense of how NoviCap is really bringing down the cost of Factoring.
Tryum – Tryum is a relationship science company – we help retailers build personal relationships with their customers based on who they and what they love (London, UK).
Despite being an ornery shopper, I liked this one. Well presented and seemed innovative, but it is not a space I know well enough to really comment on. In the examples, the merchants were small. I think that small merchants are an underserved market and that big merchants have too many vendors knocking on their doors. Small merchants is a tough nut to crack but huge value is there for entrepreneurs that do crack the Mom & Pop market.
Vieweet – Providing augmented reality, together with interactive 360 degree images for social, retail, and commercial use. (London, UK)
Not something I know about.
Started off pitch with a clear mission around selling real estate that got me nodding and then ended on supermarkets which totally lost me.
Wagevance (re-named Squirrel.me which is much better) – Providing an ethical and affordable alternative to payday loans, through wage-backed pay advances. (London, UK)
I would love to see this done well. Can they deliver reasonable risk adjusted rates to lenders without gouging consumers?
This got a huge heart rating, meaning that if they can make it work, they will ease a lot of pain for a lot of people. Plus I got enough sense that they were applying some serious innovation to this huge problem.
One general observation of all the Demo Day presenters is that they nailed the problem definition. This is clearly the result of good coaching. You excite people by showing them a problem that they can relate to and only then do you show the solution. However many of the Demo Day presenters failed to properly show the solution. They had swung too far from the usual boring features and functions demo. Showing the solution is hard because:
- time is short.
- you are worried about giving away secrets to competitors.
- it can quickly become boring.
It is hard to do this right, but not impossible. Many presenters had clearly studied Steve Jobs. They should study some more. His demos were product centric but never boring.