The future of early stage VC investing in a constricting market
Nora speaks with Maëlle Gavet, CEO of Techstars, a global investment business that provides access to capital, one-on-one mentorship, and programming for early-stage entrepreneurs in the form of accelerators. She's also the author of the book Trampled by Unicorns: Big Tech's Empathy Problem and How to Fix It.
Host: Nora Ali
Producer: Olivia Meade
Video Editor: Sebastian Vega
Production, Mixing & Sound Design: Daniel Markus
Fact Checker: Kate Brandt
Senior Producer: Katherine Milsop
VP, Head of Multimedia: Sarah Singer
Full transcripts for all Business Casual episodes available at https://businesscasual.fm
Nora Ali: For Morning Brew, this is Business Casual, bringing you convos with people you know and some you may not know yet, to make business less intimidating. Because money talks, but it does not have to be dull. I'm your host, Nora Ali. Now let's get down to business.
Being a founder requires optimism bordering on delusion. At least that's according to our guest today. And me—I agree. You also have to be abnormally resilient, navigate emotional roller coasters within the same day or even within the same hour. And on top of all of it, you have to get people to believe in you, in order to find the best co-founder, to hire the right people, and to gain access to capital. One organization is helping delusionally optimistic founders, and also those who maybe aren't so delusional, get access to people and capital, and any other resources they may need to succeed.
That org is called Techstars, which is a global investment business that offers capital, mentorship, and programming for early-stage entrepreneurs in the form of accelerators. We get into what exactly that means in the conversation. Maëlle Gavet is the CEO of Techstars, and also wrote a book called Trampled by Unicorns: Big Tech’s Empathy Problem and How to Fix It.
Maëlle's on a mission to make it easier for entrepreneurs to work on their moonshot. She aims to diversify the pool of founders who receive venture capital funding, because not every entrepreneur has a network through their family or through their education. In fact, Maëlle told us that she had zero network when she started out.
Other topics we touched on include, how do you find the right co-founder, someone to balance out that delusional optimism with a little pragmatism; what is the future of early-stage VC investing amidst a constricting market; and what is Maëlle's hot take on big tech regulation. Hint: She thinks regulators should be allowed to test, fail, and learn just like startups. We'll get into all of that and more after the break. Maëlle, you're awesome. It's so great to see you. Welcome...
Maëlle Gavet: Great to see you too.
Nora Ali: ...to the podcast.
Maëlle Gavet: Thank you so much.
Nora Ali: I have a lot of questions for you, but let's start with an icebreaker first. It's for a segment we like to call OG Occupations. So Maëlle, what is your very first job you have ever had, your OG occupation?
Maëlle Gavet: The very, very first job I've ever had is a job that I created for myself, and I started organizing birthday parties for the wealthy children in my neighborhood. I mean, actually in the neighborhood next to mine, because mine wasn't that rich.
Nora Ali: Wow. Wait a second. How much were you charging? I mean, how did it come to be?
Maëlle Gavet: I come from a, what I would call low middle class family. So we had enough money for having a roof over our head and paying for education and food and just making sure that everything was okay, but there was not a lot of money for anything extra. And I've always had a love of dresses and pretty things. And my parents were totally supportive mentally and morally, but they were like, "We can't afford it. And so anything that you want in that area, you're going to have to work for it." And so I looked for a job. I found a company, I was 16 at the time, that was looking for students who could help organize birthday parties. And the more I went through the interview process and I did a couple of birthday events with them, and then I remember very distinctively at the end of the second one being, "Why am I giving them a piece of my earnings when I could do it myself?" And so that's how it started.
Nora Ali: That is incredible. Was it lucrative, or it was just kind of pocket change?
Maëlle Gavet: Yes. I mean, lots of dresses came out of it.
Nora Ali: Well, well, well. That is amazing.
Maëlle Gavet: And it was good enough because then I ended up hiring some of my classmates. And so it was a fantastic experience as a first-time entrepreneur. My parents are not entrepreneurs at all. I'm not even sure that they knew the word entrepreneur. And so it was just my first experience of how do you get a business off the ground, how do you find customers, how do you manage your books to make sure that you can pay everyone. It wasn't a huge business. I didn't sell it to anyone, but it was just such a great experience in managing people and getting a business off the ground.
Nora Ali: And you're passing on that knowledge now to startup founders, entrepreneurs around the world. So Techstars is a destination for founders. And of course, one of the resources you offer is accelerator programs. So for those who may not be familiar with the term, what is an accelerator, exactly? What does that give to founders?
Maëlle Gavet: So think about it as a bootcamp for entrepreneurs. Think about it as a mini executive MBA for people who are focused on building their business. So we have between 50 and 60 programs around the world. So there is very likely one close to where you live. So you apply to one of our programs. And if you are accepted, you will get three things from Techstars.
The first thing is you're going to get a check, because we're an investor. Techstars is one of the largest pre-seed investors in the world. And so the first thing that we give you is a check. The second thing that we give you is this actual program, which is a three-month program where you are going to be supported by a Techstars team. Most of them are former entrepreneurs like myself. They've been in the trenches before, and they're excited to go back in the trenches with you. And they're going to work with you day in, day out during these three months to help you take your business to the next level.
And that covers everything and anything that you have in your mind, from "Hey, I need to hire a team, I've never hired people, how do I do that?" to "I'm not sure I have a good product market fit," to "I've never learned how to read a balance sheet. I don't know how to do dashboards." It's basically building everything. And then after the program, by the way, we also provide a ton of services and support. So this support, the program piece, doesn't actually finish at the end of the accelerator.
And then the third thing that we provide is what we call community. Techstars is a very, very large network. We have well over 7,000 alumni, because we invested in 3,100 companies so far. We have a lot of mentors coming from all background, industry, geography, experience in general. So you should think about it as about 7,000 mentors that have the answer to pretty much any question you have in mind.
And then we have investors. There is over 21,000 investors who at one point or another have invested in a Techstars company. And so we put all of that in front of you. And so it's a lot of work for an entrepreneur. I always say, really think about it as a bootcamp on steroids. At the end of the three months, you're going to want to take some holidays, and you will not be able to, because you'll have to run your company.
Nora Ali: There's no such thing as holidays for entrepreneurs. But you said just by getting into the program, you're getting a check from Techstars. So you can't just be a rando who walks in and says, "Hey, I want to be a part of the accelerator." So what is the criteria? How do you actually get into the program?
Maëlle Gavet: We're old-fashioned, we believe in relationship, in human relationship, even though we invest in tech companies. So the way you get into the program, formally, you put an application in. And what we look at is what is the target addressable markets that you're aiming for, what is the solution that you are offering, how innovative is it, how is it a good product? And what is the team? Has the team any relevant experience, have they demonstrated in their past resilience and grit and innovation and ability to work as a team, et cetera, et cetera? So that's the formal part.
The less formal part is that most of the founders we end up investing in are founders that we have known for months, if not years, because they usually came to previous demo days that we organized for previous programs. They came to founder catalyst programs, they came to startup weekends. We run over a thousand startup weekend events all around the world. They just reached out to the local team and they were like, "Hey, I'm interested, can we talk?" And we try to build this relationship with them, because at the end of the day, and to answer the second part of your question, most of the time these are extremely early-stage businesses. We're literally talking two people and a dog, very often, who have this great idea. Sometimes they have a minimum viable product, sometimes they do have some kind of monetization ongoing, but not always. And so it has a lot to do with, what's the team? When we build relationship with them, do we believe that this is the team that is going to be able to be successful? In particular because as this is so early-stage, we expect that a significant number of them is going to pivot. And so they're going to come with an idea and then they're going to exit the accelerator with a completely different idea. And it's not uncommon to have a startup, we invest in them at the stage where they are a B2C business, and by the time they, it's three months later, they finished the accelerator program, they became a B2B business.
And so we really spend time building the relationship with the founders and getting to know them. And that is the reason why we very much believe in this decentralized, very widespread network that we have, because we feel like we have to spend some time with you face to face as an entrepreneur.
Nora Ali: And this also highlights the importance of building relationships early on with investors, with accelerators, even if you don't feel like you have THE idea, if you have the entrepreneurial bug, go have meetings, go network. So because these are such early-stage companies oftentimes, and you are relying so much on these relationships and the founders, I imagine there are a lot of themes that you've come across as to who succeeds, what types of founders succeed. What are some of the common traits that might make it more likely for an entrepreneur to ultimately succeed?
Maëlle Gavet: So there is not a checklist, like this or this.
Nora Ali: Wouldn't it be nice if there was a checklist?
Maëlle Gavet: Yeah, it would be amazing, not just for the entrepreneur, but for us. Because it would be like, "Great. If you tick these 11 boxes, you're in, we want you. But if you miss three, that's it. We're not going to invest." So I really want to start with, there is no checklist. And that's I think the beauty of innovation and something that some VCs may have forgotten, which is innovation comes in all forms and shapes from all kinds of founders.
And the more you try to put founders into one box, like, they all have to come from Stanford—that gives you a better return on investment. Or like, it's better if they are second-time founders, or it's better if they come from a technical background. You know what? When you do that, you dramatically reduce the pool of entrepreneurs that you can invest in.
And this very narrow pattern recognition that the VC industry use and abuse is actually responsible for a lot of the lack of diversity that you see in the tech ecosystem. And frankly, the fact that a lot of VCs do not have great returns, because they just follow what everyone else is doing. And that's not how you create financial wealth for everyone involved. You need to go and find the people that other people don't know about, and you need to help them.
So having said that, there are a few characteristics that tend to provide better output than others. Resilience, or grit, or whatever terms you want to use. Grit used to be fashionable term, I think it's not anymore. So I'm going to call that resilience. Very, very important. Because being an entrepreneur is so damn hard. I've been an entrepreneur three times, plus I've helped a few other entrepreneurs build their business, joining their team and helping them grow. It's ups and downs constantly. Sometime in the same day where you feel you're on top of the world, and then the minute after that you are like, "Oh my god, I'm probably going to go bankrupt. How the hell do I pay my employees?" So resilience and optimism bordering on delusion is actually a really, really important trait for entrepreneurs, because you're going to need that for the years...and we are really talking about probably seven to 10 years that you're going to have to put into that business.
The second thing is what I would call ability to surround yourself with the right people. And this is why when we talk with entrepreneurs as they apply to our programs, we spend a lot of time trying to understand, how was the team built, and how do you operate in the human world with other human being? Because what we have seen over and over again is that nobody succeeds alone. And it doesn't mean that you have to be an extrovert. Introverts are very successful too, but whether you're an introvert or an extrovert doesn't really matter. What does matter is, are you able to find people who want to work with you? Are you able to go and talk to people that are not going to work with you but are going to want to be mentors?
And a lot of the things that Techstars does is providing this network, because we realized that not every entrepreneur has a network through their family or through their education. And I was one of those entrepreneurs who had zero network when I started. As I say, my parents were not entrepreneurs. I didn't go to schools that had this kind of network, and it was really, really hard. But what I had was this ability to go and talk to people and talk to them about what I was doing, and get them excited about what I was doing.
And so we look for entrepreneurs who have an acute understanding of the fact that no one succeeds alone. And building a network, whether you have it already or whether you're going to leverage the one that Techstars is going to open the door for you, is really important.
Nora Ali: I have more questions on team building, but let's take a quick break first. More with Maëlle when we come back. Maëlle, I want to repeat something you said: One of the traits that is helpful in being a successful entrepreneur is optimism bordering on delusion. I love that, and I've seen that before time and time again. Entrepreneurs who are super optimistic—they might seem delusional and they do a good job of convincing investors that their idea is great, they should invest—they'll succeed.
But I imagine if you're a slightly delusional founder, you should probably have a pragmatic, rational, execution-oriented co-founder or partner. So in your eyes, what makes a good co-founder pair? Because that's probably something you do with Techstars, is match up founders that go through the process.
Maëlle Gavet: Yes. It is such a key piece to the success of a business. And it may not have to be immediately a co-founder, that may be someone that you bring on board as your chief operating officer or whatever title you want to give them a few months later.
But I think you express it even better than I would have, which is founders tend to be very optimistic and very much vision-focused and very much in the future, and often, not always, they need their counterpart, which is the person who's going to be like, "This is awesome, I love the vision, wonderful idea, please bring them on. But I'm just going to make sure that everybody gets paid at the end of the month. And I'm just going to make sure that we are not blowing our entire budget on advertising in the next two weeks." And so how do you find that person? Through a lot of conversations and interviews. If you're lucky enough, you may have this person in your network immediately.
Nora Ali: It's like dating—you gotta go through a lot of people to find the right person.
Maëlle Gavet: Exactly. It is like dating. And so I would just say start with, do you actually want to be with that person? Because what I find often is that there is almost a...again, back to the checklist, there are founders who are like, "Okay, so my co-founder needs to have this, this, this and this." It's like, okay. And so I found that person. I was like, "Great. Do you actually want to spend the next 10 years of your life with that person, stuck in a what is likely going to be a very small office for a really, really long time? And you're going to be eating noodles probably seven times a week with that person—do you actually want to spend that time with them?"
And so the first advice, which may sound a little counterintuitive because it should be all about business, is, do you actually like that person? Do you want to spend a significant portion of your life with them? Probably more than with your spouse if you have one. So criteria number one.
Criteria number two—now let's go back to being serious and very businesslike—is you should figure out whether you have complementary backgrounds, expertise. Because one of the challenge that we see often with co-founders in the companies that we invest in is that there is a lot of overlap, and that creates potential conflict and friction.
And being super clear on who is doing what is made so much easier when the profiles are fundamentally different. So I'm going to hyper-simplify it, but if one of you is a technical genius and the other one is a marketing genius, bingo. Because you're going to have one who creates, hopefully, a great product, and then you're going to have another one who's going to think about, how do I market that? How do I sell it? How do I get user feedback, and go back to the technical genius and like, "Hey, that feature great, but I'm not getting the market reception that I would like to." There are plenty of other different combinations, but I give you that example just to say it's almost unheard of...I'm sure people will find immediately a few exceptions, but it is almost unheard of to have co-founders with a lot of overlap in their skill and experience that last for the long term.
Nora Ali: And some founders probably fall into the trap of identifying people who are like them. They think the same, they vibe, they have similar skill sets...
Maëlle Gavet: Yep.
Nora Ali: They're like, "Wow, we're so similar, let's partner up." But that sounds like it is not the right approach, and also proves the value of diversifying and being inclusive when you think about your co-founders and your team. So Techstars is expanding globally, which is awesome. So one of your latest accelerators is launching in Lagos, Nigeria. Congratulations. How does Techstars identify those startup hubs of the future?
Maëlle Gavet: In a very, very analytical way, actually. I was talking about all the human side and how we like to have contact and then spend time with people in person. But again, because we're an investment business, at the end of the day, we need to make sure that we can provide good return to our LPs. And so the way we do it is we map the world; we look at a bunch of different criteria, from the quality of education, the already-existing tech community, the investor landscape, is there a lot of investors in the area? We will always help you and connect you to investors outside the area. But that's usually a good proxy in terms of how vibrant the ecosystem is. Again, how many entrepreneurs already came from that, how much support is there from the government and from the community around it? And then basically we put all of that into our model and we look at, what are the cities that are most likely to have the kind of ecosystem where there's going to be enough founders for us to open an investment hub.
And so when we did that exercise last year, it became very, very clear that we needed to increase our presence in Africa. We've been active in Africa since 2011. We opened an accelerator in South Africa in 2015, and we had it again in 2016. And we continue to organize startup weekends events. We also did invest in dozens of African companies, but we did it through programs outside of Africa.
And so when we were looking at this map of the world and it became very clear that Africa was getting increasingly active in terms of new entrepreneurs coming to the market, activity of the ecosystem, scientific education, support from governments, nonprofits, corporates, we basically came to the conclusion that we needed to actually open an investment hub. And Lagos was very much top of the list. Nigeria has been incredibly active in tech over the last few years.
Nora Ali: That's incredible. We wish you the best of luck in that region and others that you open up in as well. We're going to take another quick break. More with Maëlle when we return. Okay. Maëlle, we're going to zoom out and talk about the economy and specifically the environment for startups. So obviously, inflation's super high, capital is not as readily accessible as it was in recent history for startups. How do you navigate that at Techstars? Do you have to change anything operationally? Is there different ways that you're advising startups right now? What has really changed given the environment right now?
Maëlle Gavet: I'm going to start with two things which I think are not being talked about enough. The first one is the VC industry has never had as much money in their bank account than today. So the current situation is not related to money drying out completely, like suddenly, "Oops, VCs are collapsing. There is no money. You can't fundraise." It has nothing to do with that. The current situation is related to what's happening in the public market, valuation going down. And as a result of that, investors in the private sectors being like, "Oh, wait a minute. The companies that we're supposed to invest in at some point are going to go public. If the valuation in the public market are going down, it means that this company's valuation, if they ever go public, are going to go down too. So we probably need to review our valuations while they're still private. Okay, let's just drag everybody's down."
And as that process started happening, I would say around Q2, a lot of investors, a lot of venture capitalists quite literally just sat on the bench on the side and they just started waiting to see where the valuation would go down, where the valuation would land.
And so it wasn't for lack of money, it was really a bit of a wait and see approach to, "Okay, if I can get a discount on my next investment versus where it is today," which is whatever, 15%, 20%, 30%, 40%, 60%, I'm like, "Let's just wait a few months." So that's the first thing I talk to entrepreneurs a lot about, because I hear all these concerns about, "There's no more money. How do I do it?" And it's like, "No, no, there is a lot of money. It's just, right now it's a lot of wait and see." And now that we're in September, things have started to change.
The second thing that I don't think we talk enough about is, deals are still being done, and down rounds are happening and it's not necessarily a bad thing. And so we talked a lot to entrepreneurs who, especially if they're relatively young in their entrepreneurial experience, have only seen markets going up and up and up. And so you would raise every nine to 12 months and your valuation would almost systematically be double what you had before. And we're like, "No, that's not the real world."
It is normal for due diligence to not last three days, but be more like a few months. It's okay for fundraising process to not last a month, but be more on the six to 12 months. That's kind of what it used to be. It is okay for investors to ask you for your path to profitability and insist on the fact that it is actually very real, et cetera, et cetera.
And we talk to them also about the fact that if you have to do a down round because your last valuation was completely crazy, especially by new standards, you know what? That's okay, because you just got money from people who believe enough in your business to invest, and you're going to be able to continue to grow your business. And yes, the valuation will be a little different, but you'll get back to that valuation as you continue to grow. So these are the two big things that I talk a lot about.
Now for Techstars in particular, Techstars has been around for 15 years now and we have historically really, really focused on building healthy businesses. When you come to us, we are going to teach you how to pitch, and we are going to open the doors for you to investors, to venture funds. But this is not the primary goal of going through an accelerator. The primary goal going through a Techstars accelerator is to help you take your business to the next level and make it more likely to be successful, large, international if you want, to have great people, great culture. And if you do all of that, then you will find investors. But I think there's sometimes a confusion, what's the means and what's the end? And if you say, "Oh, the end game is just to raise money," then you end up in the type of bubble or increasing valuation that we've seen over the last few years that is not healthy for anyone.
While if you focus on, "I'm just going to build a great business. And then yes, along the way I will need to raise money, but money is just a means, it's not an end. And I'm just going to do the best thing I can to build a life-changing business for me, for my family, for my community, and for the world." Because again, we're very optimistic people as entrepreneurs.
Nora Ali: And if you're raising in a down market, things just don't feel as good, you're probably going to use your money more efficiently, more thoughtfully, and the money is actually more meaningful. And Maëlle, you wrote a book called Trampled by Unicorns: Big Tech’s Empathy Problem and How to Fix It. I do still want to focus that conversation around startups. So what do you think the startups of today can learn from some of the societal damages that have been caused by big tech, and specifically implementing empathy from day one to avoid some of those pitfalls?
Maëlle Gavet: So I talk a lot about corporate empathy in the book, and that was really one of the central theses of the book, which is companies have forgotten that they need to take into account the impact that they have on the world as exhaustively as possible. And that's what I call corporate empathy. It's the ability to incorporate into your decision-making the impact you're going to have, not just on your customers, your immediate customers or future customers, not just your employees, not just your shareholders, but also the community at large that you operate in. It's not because it's the right thing to do, even though it is the right thing to do. I mean, hopefully we all remember that we are part of these communities and we want them to flourish, but more importantly, because it's the right thing to do from a business perspective in the long term. I think people tend to confuse empathy with sympathy. It's not the same thing, but it's just like this idea of you should be seeing around the corner, you should really take into account how it impacts everyone around you. And once you have that understanding, then you can make much more informed decisions for your company going forward, and create financial wealth for everyone.
Nora Ali: And the lack of empathy for big tech has certainly been part of why it's been criticized and scrutinized so much, especially in the last couple of years. The CEOs of Apple, Google, Facebook, Amazon, all have testified in the last couple years, very public hearings in front of Congress. But the concerns are largely on anti-competitive monopolies when it comes to things like search, social media, and commerce, when we talk about those companies. And it certainly feels like competition will either get squashed or acquired by these big tech companies. So from the perspective of an entrepreneur, do you think there is space still for smaller players to flourish within the tech regulatory system that exists today? Or do you think we need more regulation?
Maëlle Gavet: There is absolutely areas of innovation where small entrepreneurs can succeed. I mean, Techstars really invests in all possible industry as long as it's tech-related. So from agriculture tech to health tech to fintech to edtech, we have it all. And so there's absolutely areas all around the world where you can totally be successful.
It is also true that they are areas where frankly, because they are these gigantic companies that are going to basically buy any kind of competition pretty much out the door, they are areas where it's going to be a lot harder. Like trying to do a lot of innovation in the advertising tech space, difficult. Trying to innovate to launch a new social media platform, difficult. And really, innovation has been stifled by these gigantic companies and the fact that anti-monopoly regulations have not been applied as strictly as they used to be applied in the past in the United States.
Nora Ali: Mmm hmm. Only time will tell if lawmakers can figure out what the quote unquote "right regulation" is, which Mark Zuckerberg has said he will help them figure it out. So we'll see how it turns out.
Maëlle Gavet: But you see, sorry, I'm just going to do a quick comment on that, because that's one of the things that gets me up the wall very often. Is just, first of all, we did create the Western civilization out of this balance between private entrepreneurship—very innovative, very groundbreaking—and democratically elected government that were representing a certain way of life and were representing a certain idea that citizens who elected them wanted them to implement. And that included rules and regulations. And on both sides of the ocean, whether Europe or the US, we had different views of what does that mean. But what is very common to North America and Europe is this balance between private power and public power, and between democratically elected government and entrepreneurs.
The idea that I have heard from a lot of tech entrepreneurs, successful ones, that "We don't need any regulation, we're going to make the world a better place on our own. And regulators are really stopping us," makes no sense from an historical perspective. And when you look at industry by industry what happens, the big debacle usually comes from areas that have not been even a little bit regulated.
And so the key is really about this balance. We have to be careful, obviously, for the pendulum to not swing too much towards the government part. I'm not at all advocating for a top-down government. I mean, I lived in quite a few socialist slash communist countries in my life, and I am very clear on the fact that I do not want that. But I think this idea that we should just trust companies, that they're going to make the world a better place and citizens should not be impacting them—because let's be clear, government is the representation of citizens—to me, that's crazy.
The second thing that tends to get me, as you can see, a little wind up, is when I hear tech leaders saying, "We're going to help them get to the right legislation" as a way to say there is one solution and we should just get it right from the get-go. And so, "We are going to help you get it right from the get-go." The same leaders have spent a decade, if not more, iterating on their business and going back and forth and being like, "Oh, that didn't work. Let's pivot. Let's do something else." And the reason why they have built such successful companies is because they've been able to make mistakes, and it's been part of the process. We expect them to A/B test a bunch of stuff. Yet when we talk about legislation, somehow there is this expectation that the legislator needs to get it right from the get-go. It doesn't work like that. And if you look at, just take an example, GDPR, so the data regulation that started in Europe and then was copied a lot in the US, starting with California. I think that was a good legislation. Was it perfect? Hell no. Definitely a ton of things to improve and there will be iterations on it.
But when I hear some of my former colleagues criticizing that piece of legislation because it wasn't right from the beginning, I'm like, "When was the last time you did something that was right from the beginning?"
Nora Ali: Yeah. Yeah.
Maëlle Gavet: You pride yourself in iterating and getting to the right ideas through this iteration, but you don't give that same flexibility to government. Why? All right. I'll stop there. Sorry. I can get really passionate.
Nora Ali: No, I love it. I love the passion. If only there were a way to A/B test regulation, wouldn't that be great? But I don't think it works that way. Okay, great perspective. Maëlle, just a couple things before we let you go. First, a segment called Shoot Your Shot. So this is where I would love to hear what your moonshot idea is. This is your biggest dream, your wildest ambition. It could be personal or professional, but it is your chance to shoot your shot.
Maëlle Gavet: I have to tell you, Techstars is my moonshot. And what I mean by that is I think Techstars has the opportunity to change the way entrepreneurs are given access to the proverbial stable. And to me, the moonshot is, one day I hope that Techstars will be able to invest not in 600 entrepreneurs like we did this year, but in 4,000 to 5,000 entrepreneurs. And when I will look at this group of entrepreneurs, these 4,000 to 5,000 startups that we will invest in one year, we will see something that is representative of the world from a gender perspective, from a race perspective, from an age perspective, from a disability perspective, from everything. That to me is the moonshot. And then we will send that deal flow, because we don't lead rounds after we invested in them. We do exercise our [inaudible] rights, but we do not lead rounds. And just send that deal flow through the ecosystem and be like, "Look at these unbelievable, unstoppable founders who have this great idea and you never heard of them, because you always backed the same type of founders." Like, back to the pattern recognition we were talking about before. That's the moonshot. That's the dream.
Nora Ali: That's amazing. Okay, very last thing, a quick game. It's called Two Beats and a Miss, Startup Edition. So this is our Business Casual version of Two Truths and a Lie. So two of these things are going to be real; one is fake. So this is curated from inc.com's list of 7 Strange Startup Ideas That Succeeded in a Big Way. This article is from January 2020. So two of the following startups are real, and one I made up. Okay. Number one...I'll read them all to you first and then you tell me which one you think is fake. Number one: Diedinhouse.com. So for $11.99 it'll tell you whether someone died in your house, whether you already live there or are considering purchasing it. Okay, Diedinhouse.com. Number two: In Or Out. Using computer vision, artificial intelligence, and social media scraping, In Or Out gives you the ability to scan an outfit on a hanger, on another person, or on yourself and find out immediately if it's modern and on trend or outdated.
Okay. Number three: I Do, Now I Don't. Like Craigslist for fine jewelry, it offers sellers a way to get a fair price for their rings, and buyers to get a big discount off retail prices. And this was started by a founder whose fiancée left him after three months of being engaged. So again, Diedinhouse.com, In Or Out, or I Do, Now I Don't. Which one is fake?
Maëlle Gavet: I would tell you, I've seen versions of these three startups in one way or another through our deal flow.
Nora Ali: I'm sure, yes.
Maëlle Gavet: So I'm like, actually I think all three exist. Again, maybe not exactly like that. But I would...god, it's really hard again, because I feel like...
Nora Ali: You can start with what you think is definitely real. What seems the most real to you?
Maëlle Gavet: The third one feels very real to me. I heard a lot of stories like that. So again, I don't know if it's these companies, but this idea of coming in and selling the jewelry that clearly is not of use anymore feels very real. I'm tempted to say number two. Again, though, I've seen startup talking, developing technology to do precisely something similar to that. So I would say number two, but I have honestly no idea.
Nora Ali: Usually, Maëlle, I trick people with these. But you nailed it. You're right. In Or Out is made up. I made it up this morning. It sounds cool, though. If I could just scan what I'm wearing and if someone tells me it's cool or not, that's amazing. So...
Maëlle Gavet: It would be awesome.
Nora Ali: It would. So for context, for Diedinhouse.com, the company was created because its founder found out that someone died in his house before he bought it. And it turns out in most states, your realtor or broker is not required to tell you if a death occurred in your house.
And then for the I Do, Now I Don't, the founder had tried to return his fiancée's ring to the jeweler. They offered him $3,500, even though he paid $10,000. So he was like, "Oh, I'm going to start a business." So you nailed it. Great job.
Maëlle Gavet: That's why I do my job.
Nora Ali: You're good. You're good. On that winning note...
Maëlle Gavet: Thank you.
Nora Ali: We'll wrap things up here. Maëlle, this was such a pleasure. Thank you so much for joining us.
Maëlle Gavet: Thanks for inviting me.
Nora Ali: This is Business Casual, and I'm Nora Ali. You can follow me on Twitter @NoraKAli. And I would love to hear from you. If you have ideas for episodes, comments and thoughts on episodes you loved, fun segment ideas, just shoot me a DM and I will do my very best to respond. You could also reach the BC team by emailing firstname.lastname@example.org or give us a call. That number is 862-295-1135. And if you haven't already, be sure to subscribe to Business Casual on Spotify, Apple Podcasts, or wherever you listen. And if you like the show, please, please, please leave us a rating and a review. It really, really helps us. And guess what? We are on YouTube. So if you've ever wondered what I look like or what our guests look like, full episodes are available at youtube.com/morningbrewdaily. Business Casual is produced by Katherine Milsop and Olivia Meade. Additional production, sound design and mixing by Daniel Markus. Kate Brandt is our fact checker, and AB Silver is our senior booking producer. Sarah Singer is our VP of multimedia. Music in this episode from Daniel Markus and The Mysterious Breakmaster Cylinder. Thanks for listening to Business Casual. I'm Nora Ali. Keep it business, and keep it casual.