The Making of a Tech Star
Techstars partners with YPO to help startups accelerate
Since its founding in 2006, Techstars has been on a mission to help entrepreneurs build their businesses. Each year, nearly 500 companies participate in a three-month mentorship driven accelerator, receiving up to USD120,000, workspace, educational programming, hands-on mentorship and lifelong access to the Techstars network. In 2017, Techstars made scaling history when one of its graduating companies, SendGrid, a leading digital communication platform, became the very first startup from any accelerator program to go public.
The SendGrid founders entered Techstars Class 4 in Boulder, Colorado, USA, in 2009 to solve a ubiquitous problem — getting basic emails sent. As a serial entrepreneur, principal Founder Isaac Saldana was frustrated. He spent a lot of time setting up automated email notifications to users — such as password resets, confirmations, verification links, purchase receipts, et cetera — only to find that nearly half of them ended up in the user’s spam folder. He along with co-Founders Jose Lopez and Tim Jenkins, built a solution and took it to Techstars to see if other companies shared the same pain points.
It turns out they did. By graduation, SendGrid had nearly 100 paying customers and had delivered over 100 million emails. It also raised USD750,000 in Series A funding led by Highway 12 Ventures shortly after being incubated by Techstars. And nine years later, it was acquired by Twilio, part of the Techstars Ventures portfolio, for USD2 billion.
“Techstars was instrumental in getting SendGrid both the exposure that it needed and also the fundraising that it needed,” says Sameer Dholakia, CEO of SendGrid, who has also served as a Techstars mentor. “It was pretty evident quickly that this was going to be a high growth business.”
Getting culture right
It’s no secret that scaling a company can pose serious challenges, and SendGrid faced many as it continued to grow quickly. However, one aspect that the company got right from the beginning was culture, which is based upon four H values: happy, hungry, humble and honest.
“The challenge on the culture dimension was how do we make all the changes we need to make in the business while still being true to our culture and our values,” says Dholakia. “It’s much easier to scale culture when you’re small because of the number of humans that you brought into the organization. The variance is a lot lower and the fidelity of the signal you get on bringing people in and making sure they have the right values is a lot clearer.”
The key to scaling the culture: embedding it in every aspect of the employee experience as well as structurally throughout the organization “so that it’s impossible for any employee to work at your company without really experiencing those values,” says Dholakia. For example, potential candidates interview with four or five interviewers, each tasked with trying to identify whether or not the candidate is aligned with one of the four H’s. In addition, Dholakia meets with all new employees during the onboarding process not only to share the four H’s, but also to ask each employee to participate in protecting, defending and strengthening them.
“One of the great lessons you learn as you go from a startup to a scaled company is ownership diminishes over time unless you proactively focus on it,” says Dholakia. “That obligation we give them on day one is a really important part of why our culture has been so strong even as we’ve tripled and quadrupled in scale.”
SendGrid shares these learnings with Techstars startups in various accelerators. In fact, employees have spent over 500 hours as mentors in 2018 alone.
“The spirit of Techstars is very well encapsulated in #givefirst,” says Dholakia. “We’ve been there in the shoes of all the startups going through it. We’ve had our bumps just like every company so we like to share those learnings back with our fellow Techstars classes.”
SendGrid is closely aligned with startups not only through Techstars but also its business model. From the beginning in the Techstars accelerator program, SendGrid depended on startups understanding what it provided as a service and incorporating it into their software.
“We support startups that are trying to solve problems for customers and we think email as a communication channel to their end users is a really important part of how they do that,” says Dholakia. “If we can be helpful to those startups in their early days, we have found that beyond it being the right thing to do, it’s also proven to be a very smart business decision. And the combination of those two things is usually when great things happen.”
Helping startups succeed
SendGrid received the first-ever platinum Techstars t-shirt in recognition of being the first graduating company to IPO at this year’s Techstars FounderCon, which brings founders, corporations and investors together to forge new and meaningful connections. The annual three-day event in October included business development meetings, investor meetings, founder-led programming, roundtable discussions and social events. YPO members gathered at FounderCon for a Meeting in Meeting hosted by Mitch Presnick, Founder and Chairman of Room as well as the Founder and former Chairman and CEO of Super 8 Hotels China, and the Entrepreneurship and Innovation Network.
Through YPO’s affiliate partnership with Techstars, YPO members can now fast track to the interview stage when they apply to enter their startup in a Techstars accelerator program as well as get involved as mentors to help startups grow fast in the various accelerators.
“As part of the accelerator programs and events such as FounderCon, Techstars offers YPO members an opportunity to share their wisdom and insights as highly respected business leaders,” says David Brown, Founder and Co-CEO at Techstars, “and also to benefit from the entrepreneurial spirit, disruptive ideas and technical savvy of the Techstars founders and alumni.”
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