Dozens of technology entrepreneurs spent Saturday at Geekdom learning about the TechStars Cloud program.
“We help awesome founders build great companies,” said Jason Seats, managing director of the TechStars Cloud.
The program has become a launching pad for technology startups with five TechStars programs around the country in Boulder, Boston, Seattle, New York and San Antonio. TechStars Cloud focuses on companies that build infrastructure products for the Internet as well as consumer applications accessible on the Web.
“Deep down there is some altruism,” Seats said. “We like to build stuff that matters. It’s not about making the most money.”
But the TechStars companies collectively have raised $265 million and 185 companies with 1,200 employees.
Last year’s TechStars Cloud class raised $15 million including $2.5 million from local investors in a fund headed up by John Mosher.
The TechStars Cloud is a three-month technology incubator that takes place every January at Geekdom, a co-working and collaborative space at the Weston Centre in downtown San Antonio. The first TechStars Cloud took place last January and featured 11 teams that came from all over the country. This year’s program kicks off on Jan. 14 and will be housed on the newly renovated 10th floor of the Weston Centre. The deadline to apply is Sunday at midnight.
The application process is highly competitive, Seats said.
Each team receives $18,000 in cash and $100,000 in debt financing. In exchange, TechStars takes a 6 percent stake in the company.
For that investment, the companies get mentorship from successful entrepreneurs, investment, access to a vast network of entrepreneurs, venture capitalists and other resources, and perks valued at $200,000, Seats said.
During the three-month program, the teams overhaul business models and craft products while they fine-tune their company story and pitch.
Ryan Shank and Vincent Wong, co-founders of MHelpDesk, which provides service management software to repair companies online, flew in from Reston, Virginia, for the TechStars for a Day program.
“We’re interested in the mentorship and network aspects of the program,” Wong said.
“We’re looking for mentors to take the company to the next level – to take the company to the masses,” Shank said.
Dustin Larimer, co-founder of a team chat application, applied for the program. He volunteered as a TechStars HackStar for the last class and he’s seen the benefit the teams receive from the program firsthand.
“I got to see the transformation in them,” Larimer said. “The quality that comes out of that crystalizes a line of clarity that you couldn’t find on your own.”
Throughout the day, the applicants listened to a series of speakers that talked about their mistakes, how to raise money and how to run their businesses effectively.
Dirk Elmendorf, co-founder of Rackspace who now runs a business accounting software startup called Trucking Office, shared his experience.
“We all think we’re great at marketing,” Elmendorf said. “We’re all wrong.”
Finding, hiring and retaining the best employees is one of the most important parts of running a startup company, he said. Sales and marketing people are essential, he said. But he didn’t always think that way.
“Original model was no salespeople,” Elmendorf said. “Ok, that model doesn’t work.”
His latest startup, Trucking Office, has since hired a few sales people.
Startups should also focus on having cash in the bank, Elmendorf said.
“Depending on the business model you pick, you might always be fundraising.”
Startups need to also focus on customer acquisition costs.
“These are essential things to do the business,” he said.
When someone asked Elmendorf how he focused on the trucking industry, he said his team originally wanted to supply accounting software to all small businesses. But they found the trucking niche and that’s where they are focused because it’s a large and important market.
“I never thought I would be excited about doing accounting software for truckers,” he said.
But he is. The software helps independent truckers do their jobs better and fight big conglomerates, he said.
TechStars Cloud for a Day at Geekdom
November 3, 2012 by 3 Comments