It turns out that covering companies for a living is easier than advising companies how to get coverage elsewhere.
That was the conclusion I drew from one day volunteering as a mentor at Barclays New York Accelerator, a unit of Barclays that chooses 10 fintech startups a year to receive $120,000, a place to work, and coaching on how to get to the next stage. (The unit is run in partnership with Techstars.) This year the startups are meeting with 150 mentors, including founders of large fintech companies, subject matter experts and venture capitalists.
My job for the day was to advise the entrepreneurs on dealing with the media. I assumed this would be easy; I’ve been a journalist for many years and should be able to answer just about any question about working with the press. I was given a basket of snacks and set up in a conference room in the chic, exposed-brick-glass-wall-primary-colors-open-workspace facility in the old Castro building on 23rd Street. Entrepreneurs rotated in and out of the room every 20 minutes.
I quickly realized they all wanted one thing: to be featured in The Wall Street Journal and the Financial Times. I offered what suggestions I could, but there’s no way to guarantee them coverage in those two publications.
Afterward, Jon Zanoff, managing director, recruiter and top coach of the program, stopped by. He’s been a mentor to startups through Techstars and Empire Startups, a business he founded in 2011 that hosts fintech meet-ups and conferences. Before that, he held technology and product strategy positions at Goldman Sachs, BlackRock and E-Trade. We talked about the Barclays Accelerator, innovation theater and how he can tell the startups that will make it from those that won’t.
Do you enjoy your job at Techstars?
JON ZANOFF: It's really challenging.
It's just a really hard job. It's very rewarding, you wake up in the morning when you're recruiting and fly to San Francisco or Toronto to meet with entrepreneurs, that's a pretty epic job.
So you’re super busy.
Super busy. But a lot of things are tough. One is, you're only as happy as your unhappiest child. With 10 companies in the cohort, I can naturally be dragged down. You want to help everyone and if a company is struggling, that's as happy as I can be.
From the recruiting side, with a deadline to invest in 10 companies at once, there's a huge fear of missing out. It's not the stress of having to make those decisions, but what cities did I not visit, what demos did I not attend, what coffee meetings did I say no to?
Do you ever wonder if you really picked the right 10 companies?
Do you feel personally responsible for the success of each of these companies?
The game is doing everything I can to help and support them. I don't know that I feel responsible so much as that I want them to be successful. It becomes very emotional, we live together for 60 hours a week for three straight months and there are ups and downs. It’s at times giving them tough love but also celebrating victories with them.
Is there anything unique about this year’s group of startups?
Four of the nine have female co-founders. There are also Latin American and African- American founders, so it’s a fintech cohort with 70% diverse founders.
What else did you look for when you chose these companies?
Coachability and resilience. Sometimes we take companies in spite of their ideas rather than because of their ideas. Sometimes they find out the business model they thought they had coming in isn't going to work. It can be a shock to the system as they meet with mentors and digest all the information, synthesize it, and their ability to be coachable and resilient as it knocks them down and figure out how to build a better mousetrap based off that, that's the key to this whole program.
Do a lot of these companies go through quite an evolution while they are here, start at point A and end up somewhere very different?
Across the board, how they tell their story changes drastically. Some of our best successes are 180-degree pivots. That's because we provide a framework where they're able to test ideas and find a product market much faster than they would without the Techstars framework.
The resilience is needed because some people get discouraged by that.
Can you tell when you meet someone whether or not they have resilience?
We can ask questions, prod and poke, double-click on to the answers they give to truly understand how they react to feedback. At times I'll decide to be the devil's advocate on one of their strategies and take that down a rabbit hole and see how they react.
At some banks, accelerator programs are really “innovation theater” or innovation petting zoos — they keep startups in a holding pattern where they’re committed to the bank, but the bank isn’t doing anything for them. It doesn't sound like that's what this is.
At this seed stage of a fintech startup’s life, anything that doesn't help them learn, raise money, or add revenue is a waste of their time. This idea of "we'll set up meetings and tours and tap on the glass and look at the zoo animals, look we also have this innovation lab," of course that's not very helpful. But if we can establish a culture of, these are innovative companies and we have no idea how this may manifest itself in the future, but we do know it will add value to the bank in some way, we're going to support these companies however we can. If you're excited about a technology but you're not sure how to immediately pilot or implement it, that could be a good thing.
So if a bank gets the technology immediately and can use it right away, it's probably not that innovative?
Then they should be outsourcing it overseas and not wasting entrepreneurs' time. One of the challenges I believe is that the labs and accelerators train the press to look at some of the wrong indicators of success: that after 13 weeks, there should be bank pilots and tactical solutions coming out. Then you tend to have crummy solutions that don't add a ton of value.
From a bank innovation standpoint, you can take a portfolio approach where some are just absolute moonshot -- if this works, it could completely change how financial products are created and sold today. Some are strategic in nature and could be a differentiator for the bank, and some are tactical solutions where it's not strategic, but if we had fresh sets of eyes on this from entrepreneurs, that would be of value. It can't all be moonshots — if blockchain replaces the iPad, what does that look like?
The other challenge is that you can't be half into an innovation program. These are expensive to maintain and run and engage in a meaningful way, but it's not a next-year return. These are seed-stage, growth-stage companies and the true ROI is 10 years.
What does success look like for you when these companies graduate from the accelerator?
The most quantifiable KPIs and success criteria for me are business development and fundraising. Those certainly aren't perfect measures of success. If a company leaves this program with a rock-solid understanding of product market fit, and can either hit the gas or divest and pivot, that's a fantastic outcome from 13 weeks.
Editor at Large Penny Crosman welcomes feedback at penny.crosman@sourcemedia.