Techstars Company Analysis

Part
01
of two
Part
01

Techstars - Corporate Innovation Practice Programs

Techstars’ corporate innovation practice programs include corporate accelerators, innovation bootcamps, the Techstars Studio program, network engagement programs, and network sponsorships/ partnerships. Further information surrounding these programs, including their structure, costs, benefits, value, length, and the possibility of working at corporate headquarters, are provided below.

Corporate Accelerators

  • Techstars was running 49 accelerator programs in 35 cities in 16 countries in July 2019.
  • The program will require a “multi-year commitment” from partners, which includes an annual accelerator event with 10 carefully selected startups.
  • The program begins by working closely with Techstars to hire a Managing Director from Techstars’ network and working on identifying and defining the corporate’s challenges, needs, market, and establishing Key Performance Indicators, KPIs to align the right innovation and disruption.
  • Then Techstars will lead the search for startups, through a 2-month window for applications and interview to select 10 startups that will participate in the 3 months/ 13 weeks mentor-driven accelerator program.
  • Selected startups will receive a $120,000 investment with a 6% stake in equity, which may be split into 4% by Techstars and 2% by the corporate partner.
  • They will also receive intensive mentorship from leaders from the corporate partner and Techstars alumni.
  • During the program, the selected startups will move to the city which their corporate partner is based in, and can work either in Techstars’ location or the corporate partner’s headquarters.
  • Corporate partners are advised to work closely with the selected startups, providing tools, equipment, facilities and opportunity to try out their solutions directly in day-to-day operations throughout the 3 months.
  • The program ends with one or even two demo-day(s), either private within the corporate or by an invitation to their network of industry leaders or press.
  • While official costs of such accelerator programs are not made public, several unverified sources put a range between $1.0-2.5 million per accelerator, depending on location.
  • Corporate partners invest in such programs to have the first chance to observe potential innovations or disruptions in areas of interest that they would have missed otherwise. They also have the prerogative to invest or not in the 10 startups with no obligation from either party.
  • Some in the industry see such corporate accelerator programs to be a more cost-effective initiative to drive innovation compared to traditional research and development (R&D) if strategic motives and company structure are aligned. This is mainly because of the much reduced time and cost of experimentation compared to a decade ago.

Innovation Bootcamps

  • Innovation Bootcamps were introduced by Techstars in September 2018.
  • Different from the accelerator program, innovation bootcamps focuses on internal innovation by empowering employees in large corporations to drive innovation.
  • This is done through a 3-day/ 54-hour event where cross-functional teams are formed, and then mentored and practice startup methodologies to build solutions.
  • In the end, teams will pitch business innovations to a panel of judges comprising Techstars experts and corporate partner leaders to select innovations that are best to be further advanced.
  • Some companies extend the Bootcamp to a 6-week program where selected projects were accelerated by allowing the teams to work on their ideas on 50% of company time.
  • Techstars will provide mentorship, training sessions, and product development approaches from expert Techstars facilitators.
  • Participating employees get to develop new tools and frameworks while growing with the company.
  • Equinor, one of the corporation partners observed three key benefits of the program, exposing employees to startup culture, rapid assembly of meaningful innovations ready to be invested, and a stronger engagement between the innovation and business teams.
  • Official costs of such innovation bootcamps from Techstars are not made public.

Techstars Studio

  • Techstars Studio was introduced in January 2019.
  • The program will develop and launch venture-scale businesses with the support of corporate partners targeting specific areas of interest within their industry.
  • Individuals/ corporate partners may choose to submit ideas/ concepts that they’d like Techstars to work on.
  • Selected ideas will be refined by Techstars’ network of entrepreneurs. After that, a vendor within their global network will be selected to build the product.
  • Different from the accelerator program, Techstars Studio will contribute the team and budget to startups at the concept stage and directly participate in validating, building and launching the venture.
  • Applying founders/ corporate partners will enjoy the convenience, speed to market, unlimited capacity to build, and an enormous proven entrepreneurial talent network.
  • In exchange, they might have to give up IP ownership and a considerable stake in the new venture.
  • Each participating corporate partner will pay an annual membership fee to have an early look and receive updates at Techstars Studio projects.
  • While Techstars plans to launch four to five startups from its Studio program this year, they have not disclosed how long the program took from concept to launch of the venture.
  • Official location and costs of Techstars Studio from Techstars are not made public.

Network Engagement Program

  • Network Engagement Programs were introduced in September 2018.
  • The program is designed to connect corporate partners with startups for potential collaboration opportunities in various stages of identifying internal challenges, implement proof-of-concept solutions, scale new technologies and expand their portfolios.
  • A dedicated Network Engagement Manager will help corporate partners research, engage, and invest in the world’s most promising startups aligned with predefined strategic goals, innovation metrics, and KPIs.
  • If proven, then corporate partners may choose to collaborate, invest, merge, or acquire startups.
  • Companies like QBE are leveraging on Techstars’ proven network of promising startup founders and inject initial investment, business development, and mentoring to help them grow.
  • No official information on costs, program length, and location of the program can be found.

Network sponsorships/ partnerships


Research Strategy

We've attempted to cover all of Techstars' corporate innovation practice programs mentioned previously. The Startup Ecosystem Development program was excluded as it caters to the interests of local communities and made no official reference to corporate partners.
We could not find any official/ reliable information for the costs for any of the programs discussed above. The information is probably withheld to maintain a competitive advantage for both Techstars and their corporate partners. We then attempted to derive the cost based on any allocated percentage of the innovation/research and development budgets of participating corporates. That attempt failed as we’ve discovered no public information regarding official allocation percentage specifically to Techstars only, nor were we able to discern the cost of each separate program as partners usually participate in multiple programs. We then tried to triangulate the cost based on the classification of Techstars’ revenue by program. This attempt also failed as we’ve found no public information regarding the breakdown of Techstars’ revenue by program nor how many actual clients they served in total for specific programs. With such attempts, we conclude that up to date/ reliable information for the costs of these programs cannot be found in the public domain.
We could not find any official/ reliable information for the program length and specific examples of whether work can be carried out in HQ location for Techstars Studio and the Network Engagement Programs. This probably due to the variable and extended scope of the programs which may or may not cover proof of concept, product development, the launch of venture or merger or acquisition. Another possible reason is the relatively short time frame of one year since the official launch of these programs. We tried to triangulate the information by observing and averaging from indirect involvement or case studies of such programs. Our attempt to triangulate such information failed when we discovered that there was no public information given on the specific concepts, ventures or acquisition that resulted from these programs. Our second attempt to triangulate such information was to find out the examples of location and the average time that other Techstars accelerated startups not in this program, used to cover proof of concept, the launch of venture or acquisition. This attempt also failed as no reliable data can be found on the topic to be worked on.
Part
02
of two
Part
02

Techstars - Competitors

Startupbootcamp, 500 Startups, and San Francisco Accelerator are Techstar's true main competitors in the corporate innovation segment.


#1: Startupbootcamp

Annual Revenue

  • Startupbootcamp generates an estimated $60 million in revenue annually.

Corporate Innovation Practice Programs Offered:

  • The company currently has more than 20 industry-focused programs for global startup accelerators and corporate innovation.
  • Startupbootcamp’s global startup accelerators and corporate innovation has accelerated 831 startups, with an average funding of €1.007 million and a total funding of €689 million.
  • In 2018, Startupbootcamp InsurTech hired a "managing director for corporate innovation in insurance" to spearhead the development and release of a brand-new assortment of corporate innovation services and products.
  • Startupbootcamp's parent group also handles Innoleaps' corporate innovation services.
  • The company launched their ItalianTech acceleration program, with a similar agenda.
  • Under the ItalianTech acceleration program, the company provides productive programs for corporate innovation and acceleration, and it expects that engaged startups will profit from an experience that is transformative and extraordinary.


#2: 500 Startups

Annual Publicly Available Revenue:

  • 500 Startups generates an estimated $45 million in revenue annually.

Corporate Innovation Practice Programs Offered:

  • The company claims that more than three-fourths (81%) of corporate innovation programs report that under "a quarter of their startup engagements resulted in commercial deals," and they aim to resolve this with their unique positioning for their corporate partners.
  • 500 Startups concentrates on corporate innovation by analyzing around 500 of the largest public businesses in the world, along with the companies' Corporate Startup Engagement (CSE) practices.
  • The company’s corporate innovation crew collaborates with existing businesses by offering recommendations on strategy, developing capacity to execute pilots, and linking corporations with suitable startups in their regions and verticals.
  • VC Unlocked is another initiative of the company, which investigates how larger companies can collaborate with startups and craft top-notch programs for corporate innovation.
  • The company has invested in more than 2,000 startups throughout over 60 nations since the year 2010.


#3: Society3

Annual Publicly Available Revenue:

  • San Francisco Accelerator, also known as Society3, generates an estimated $7.7 million in revenue annually.

Corporate Innovation Practice Programs Offered:

  • The company initiates innovations paradigm workshops for two segments, namely public workshops available to anyone and company workshops specifically designed for organizations exclusively.
  • The public workshops can be attended for $195 per person and runs for three days. Meanwhile, the company workshops fee starts at $10,000 per day (plus accommodation and travel) for five days.
  • Additionally, it offers an enterprise innovation strategy workshop, which is targeted at top executives (c-level executives and board members) and starts at $15,000 per day (accommodation and travel) for one day.
  • It also runs a corporate innovations accelerator, which includes a Corporate Innovation Boot Camp and the Market Storm Program that lasts for nine months.
  • Following the conclusion of the Corporate Innovation Boot Camp, groups are able to begin the company's Market Storm Program.


Research Strategy:

To provide information on three of Techstar's primary competitors, we scoured its website, work profile, and company profile in the corporate innovation segment. We found a list of competitors from Crunchbase and Owler with similar work profiles, and then filtered these by the companies that have corporate innovation programs or are working towards it.

Afterward, we found three companies, namely Startupbootcamp, 500 Startups, and San Francisco Accelerator, that fulfilled the specified criteria. We then used their respective company websites, company blogs, and industry reports to provide high-level data on each one. We also used an older source to provide a comprehensive overview of the corporate innovation program of one of the companies, as the program launched in 2016, and no new article describing it was available.
Sources
Sources

From Part 01
From Part 02
Quotes
  • "Techstars has $80M in estimated revenue annually. Techstars competes with Y Combinator, 500 Startups, and Startupbootcamp."
Quotes
  • "The top 10 competitors in Techstars' competitive set are Y Combinator, 500 Startups, Startupbootcamp, Society3, Sequoia Capital, Greylock Partners, CVC, Wayra, Telefonica and CIIE. "
Quotes
  • "Startupbootcamp InsurTech welcomes Manjit Rana, founder and CEO of innovation consultancy, Ingenin Ltd, as Managing Director for Corporate Innovation in Insurance, to lead the development and launch of a new range of corporate innovation products and services."