Thursday, October 19, 2017
How Techstars Impact Wants To Accelerate Social And Environmental Startups
Techstars (www.techstars.org) announced its latest startup accelerator--the Techstars Impact Accelerator, which will be based here in Austin. The new program is led by Zoe Schlag, who told us about the new Techstars program, and how it is hoping to accelerate the growth of social and environmental "impact" startups, and why it's in Austin. We've also posted this interview on our sister, Rocky Mountain technology news site, techrockies.com.
What is Techstars Impact?
Zoe Schlag: Techstars Impact is our first, for-profit, mission-driven accelerator program, where we are building technology companies who are solving social and environmental problems. We will operate in Austin, Texas, and June of 2018 will be our first investment class. We're looking for mission-driven founders, who, like us, see some of our deepest global challenges as their biggest opportunities.
What is “mission driven”?
Zoe Schlag: In terms of what we're looking for in technology companies, mission driven companies are tackling social or environmental problems. From the social side, that means increasing access to basic services and needs, and which reduce poverty and inequality. On the environmental side, it's companies increasing the reliability of the food supply and food security, and increasing access to things like affordable energy, water, and sanitation. Founders are working across such areas as good, agriculture, education, healthcare, financial services, and elsewhere. It's a really wide array of companies.
How do you balance having a for-profit company, yet still tackle social issues?
Zoe Schlag: Part of this is why Techstars has launched an accelerator specifically in the impact space. We actually made our first, impact investment in 2011, and since then, we've been investing in impact companies on the platform from our accelerator programs. In the large part, those investments have been made on the real business opportunities in the area. So, we've been organically in this space for some time. Two trends are pretty important to note. One, is the number of impact companies has been increasing year over year. Over the last 3 years, the number of companies coming into the Techstars platform has grown over 50 percent. When we look at those companies, compared to our general portfolio, they are tracking, and in some cases, outperforming other companies. What this demonstrates, that that there's an advantage when your business model has impact tied directly to your product or service. You can leverage that to build competitive advantage for your company.
Is the format for this the same as other Techstars programs?
Zoe Schlag: Each company that comes into the program, and gets an investment from Techstars Impact, goes through a three month program, and looks like our other accelerator programs, globally. The big difference, is in our mentor network, where, in addition to the existing entrepreneurial networks Techstars has built, we are also going to be pulling in experts who have already built their own mission-driven companies, pulling from the impact investment network, and folks with a deep understanding of how you can leverage mission for competitive advantage.
Why did you decide to launch this particular program in Austin?
Zoe Schlag: That's a good question. I'm actually on the other side of that. While Techstars was organically entering the impact space, I had moved to Austin from India four years ago and created an organization called UnLtd USA. We were backing social and entrepreneurial companies in Austin, with accelerator style support. We've been closely tied with the Techstars community for the last four years. Jason Seat was on our board, and he's Managing Director of Techstars Austin, and was serving as a mentor for our program. As we were developing what we were doing, we saw a bigger opportunity to join forces with Techstars. Essentially, it was UnLtd USA joining forces with Techstars, to launch the Techstars Impact Network, and take the work I'd done over the last few years and expand that to the global Techstars community.
You mentioned it's best to balance the business model and impact, explain a bit more how you look at that?
Zoe Schlag: In a large part, we are looking for a business model which his intrinsically tied to the impact model. If you were to scale the business model, does that scale in lockstep with impact? That's the ideal scenario, where that business model is directly tied to impact. There are many scenarios where those two can be divorced, and we see that quite a lot. From an investment perspective, when that happens, that adds a lot of risk to the equation. So, we're looking for a business model where those are inherently connected. For example, one Austin company in the area is Aunt Bertha, which his the number one search and referral service for health and human services. Their benefit is inherently tied to their business model, and cannot be divorced from it. In our mind, that's the types of companies that will not run into that tension.
Finally, where is the program now, and what's the next step?
Zoe Schalg: Right now, I'm meeting with founders interested in applying to the program, and receiving investment. We open applications the first week of December, and the program will begin running the first week of June. We'll be bringing ten companies to Austin for the three month program.
Thanks, and good luck!