Over the past 5 years, we’ve watched 16 batches of startups come through 500 Startups. We’ve seen first-hand how founders benefit from mentorship and advice that’s tailored to the key problems they face in their specific businesses. That’s why this year, we’re launching specialty tracks at 500 Startups.
You can think of joining a specialty track as declaring a major in college. You go deeper into your area of interest, and that gets you to where you want to go faster.
For Batch 17, which starts on May 2 in Mountain View, CA, we’re launching 2 specialty tracks within the batch:
- B2B: Led by Robert Neivert, this track will focus on the specifics of selling to the enterprise and SMBs and growing revenue. Robert has 2 decades of experience running B2B companies. He’s founded or worked as an executive at 8 companies with 4 exits and 4 still in operation.
- Beauty and Fashion: Led by Tanya Soman, this track will facilitate the connections to media outlets, brands and retailers necessary to grow distribution and build a big business. Over the last 2 years, Tanya has advised 3 batches of companies at 500, coaching founders on fundraising and pitching in our Mountain View program.
Practically speaking, joining a specialty track means that you’ll get paired with experienced partner-mentors in your market, you’ll sit and collaborate closely with peers in your specialty track, and you’ll attend accelerator events tailored to the specific problems that your category of company has.
At the same time, you’ll benefit from cross-pollination with all the other companies that will be part of Batch 17, which is often one of the biggest sources of creative inspiration. And even though you’re majoring in your specialty track, you won’t miss out on the accelerator’s core curriculum, which includes all of the foundational learnings on how to start a startup.
Why Specialization is a Major Key
If you’re a B2B founder trying to close a multimillion dollar deal with British Petroleum, you’ll want to talk with a partner-mentor who has done it before—not an expert on viral consumer apps.
Partners have areas of expertise and focus, and that means that we’ve had informal vertical tracks for years, based on which companies work with which partners.
We’ve noticed that making the right matches improves the quality of feedback that companies receive, and that’s inspired us to expand on the idea of accelerator verticals and formalize them.
So with the current batch, Batch 16, we decided to test-drive the idea of specialization by splitting it up into 5 themes:
- FinTech
- Digital Health
- ViceTech
- HR/workforce development
- SportsTech
For each theme, we admitted enough startups to ensure that we had a critical mass. In a previous batch, we might have had a single FinTech company. By defining it as a theme for Batch 16, we explicitly set our focus on admitting more FinTech companies, and we ended up with 6 great ones.
Achieving critical mass for each theme meant that every startup in the batch was surrounded by startups grappling with the same issues and searching for solutions to the same problems.
In the past, a solitary FinTech founder might pull her hair out about a particularly thorny regulatory issue and not have anyone to ask for help. A FinTech founder in the current batch could turn to any one of the 5 other companies who’ve fought through the same thing.
During an accelerator, the most important resource that a startup has is time, and splitting the batch into specialties has helped companies do more, make fewer mistakes, and solve larger problems—in less time.
The B2B Track
The best B2B founders are deeply specialized, capable of tackling really difficult problems. They’re the ones most qualified to bring a truly differentiated and original product to market.
To build a great company, however, that specialization has to be combined with expertise everywhere else, from marketing to sales, hiring, and more.
We’ve designed this track with these founders in mind—the ones who, with a little extra help rounding out their skills, have the potential to seriously accelerate their growth.
What You’ll Learn
You’ll learn from top B2B experts about different aspects of building, marketing, or selling a product, with special focus on the areas where first-time founders often have the least experience:
- Cold calling and emailing
- How to manage the selling process and deal with gatekeepers
- Building a predictable revenue engine
- How to hire a growth team
In addition, each week we’ll hold a roundtable discussion where founders can ask questions and get input from 500’s community of mentors. These mentors will be brought in specifically for their expertise in facets of B2B:
- We’ll go through issues companies are having with closing large deals, expanding their smaller deals, and ramping up marketing and lead generation.
- We’ll talk about developing products for larger customers, dealing with customization requests, negotiating deals, and cutting churn.
- We’ll have presentations on specific B2B strategies, like Matt Ellsworth speaking on how web scraping can give your sales and growth teams a competitive advantage.
And the whole time you’re at 500, you’ll be surrounded by fellow B2B founders with whom you’ll share learnings, opportunities, and connections, who will also challenge your notion of what’s possible. When the company across from you grows its revenue 40% in a single month, you’ll know you should be shooting to hit 50%.
Together, you and the founders on the same track will forge deep bonds that will last long after the program ends, while also pushing each other to greater heights.
What We’re Looking for
- Metrics and Unit Economics: Customer acquisition cost, lifetime value, churn, retention—all of these metrics are moving targets early in the life of a B2B startup. We’re looking for founders who deeply understand how they work and can talk intelligently about how to improve them.
- Traction and Validation: Revenue is important—we like to see about $10k MRR in our B2B accelerator companies—but it’s not a hard-and-fast requirement. Walk in with a couple signed contracts or letters of intent from buyers, and a prototype of your product, and we’ll know you’re solving a real problem.
- Distribution: Engineering or product-oriented founders often have the least experience here, and that’s fine if they have the right attitude. We’re looking for those who’ve aggressively hustled to talk to customers and improved based on feedback.
The Beauty and Fashion Track
Worldwide, the combined market value of Beauty and Fashion is well over $1.5 trillion.
Contrary to popular belief, commerce is not dead, and the size of these markets actually proves the inverse: that we’ve only scratched the surface of what’s possible. There’s a massive opportunity out there for companies that can innovate and build a better customer experience, and we’re going to facilitate that.
Where many investors fail to look, we see a bright opportunity—and we’ve already invested in many remarkable startups in the Beauty and Fashion space like Ipsy, Tradesy, Styleseat, Mayvenn, and TheRealReal.
But that’s just the beginning.
That’s why we’re developing a program specific to the challenges these companies face and providing them with the resources and connections they need to grow.
What You’ll Learn
With a critical mass of Beauty and Fashion companies, we’ll be able to create great opportunities for our partners and founders to share their valuable expertise and connections.
- We’re bringing in successful Beauty and Fashion founders for Fireside Chats to share their experiences.
- We’re giving each company an in-house growth coach who specializes in selling to these demographics.
- We’re bringing corporate brands, retailers, and media outlets into the process to connect with our companies.
That last element is crucial when it comes to building a business you can scale.
Companies in Beauty and Fashion need to build relationships early with the traditional arbiters of style—the brands, the magazines, and the stores—but most tech accelerators don’t have these corporations on speed dial, which can make this difficult.
Meanwhile, most of these corporate giants would love to get in on the ground floor of the next big thing, but they don’t know how. There is a disconnect.
What we’re doing is bringing the corporate and startup worlds together, bridging the gap, and laying the foundation that the next wave of businesses within this track can build on.
What We’re Looking for
- Revenue. We’re looking for companies that have grown to over $1M annual revenue run rate, but what’s more important is evidence of even bigger revenue growth down the road—solid customer retention and high customer lifetime value.
- Product. User growth is great, but it is very possible to get up to millions of active users with a bad product that will ultimately fail. What we want to see is a great, sticky product with relatively low churn, because that traction is what really what proves there’s sustainable growth on the horizon.
- Founder-Market Fit. The best founders are often solving problems that they themselves have. We love to see companies grow out of an organic need that founders have, rather than as a formulated play on a market opportunity.
The Future of the Accelerator
In the accelerator landscape today, we see more vertically-specialized accelerators than ever. Even within broad-based accelerators, we see de-facto specialization based on the partner-mentor you get assigned to.
By designing explicit specialty tracks around these unspoken divisions, we’re betting that founders will be able to drive even higher returns out of the community, support and connections that 500 provides.
