Corporations Can Work with Startups to Drive InnovationBy Jan Hogewoning | Tue, 09/15/2020 - 09:33
Q: How do you select new startups for your accelerator program?
A: MassChallenge is the most startup-friendly accelerator in the world. We do not demand equity and do everything that is humanly possible to help startups succeed. Since opening our offices in Mexico in 2016, we have accelerated 102 startups and raised more than US$47 million. One of the essential aspects of our program is selection. We look for startups across Latin America through a two-phase process. First, there is an online application where experts from all around the world judge the potential of the startup. About 100 applicants are filtered from 800 contenders and these are then judged on-site by panels of industry experts. In this phase, these startups have to convey the impact they will have on the world and convince our panels that their concept can be successful. If the judges are convinced, the startup wins a place in the final group for the accelerator program.
Q: What components make up the accelerator program?
A: When startups enter our program, we do an assessment to uncover the areas where they need to grow. Depending on the result, we define their work in a tailor-made curriculum. The whole curriculum is composed of 84 sessions over a six-month period. The startups are assigned mentors with very specific knowledge of the respective field. Apart from this, we have networking events where startups can meet corporate executives. We prepare them for investors, teaching them about finance and improving their personal communication skills. After completing the program, we continue to work with these startups in fundraising activities. If they have any problems, they can approach us for help. Every two months, we conduct a survey in which we gauge the needs of our startups.
Q: What are the main challenges that health startups face?
A: The health sector is unique because there is a lot of regulation. To sell a product or service you need a lot of permits and acquiring these is a lengthy and tedious process. With medical trials, it can take four to five years before you see whether you have something valuable for the market. This means that investors need to have a great deal of patience with health startups as they complete these steps. Startups need to have intellectual property (IP) to attract investors.
I do not think Mexico has the ecosystem yet for health startups. There are relatively few funds. Those in the health area that do have investors, tend to have only a few. This is not to say that some have not been successful in raising significant capital. Startup Ingea raised US$5 million dollars and is now conducting trials of its product.
Q: The percentage of women in startups is growing. Is this an explicit goal of your organization?
A: No, we do not select on the basis of gender representation. However, we do try to get the word out to as many people as possible, and as we reach out, we get a diverse range of applicants. There is indeed a bias in gender in the area of programming and tech startups, which leans toward men. However, we are proud to say that this year 30 percent of startups had a female cofounder. Last year, it was 44 percent. Of the winners, four out of five had a female cofounder. Among our judges, we do try to have as many female judges as we can. One aspect which removes bias in our selection process is that the judges do not have to come to a unanimous decision. They all can file their own decision. This reduces the peer to peer effect.
Q: What are your main objectives for 2020-2021?
A: Getting more corporations involved is a key objective. We have a two-way strategy to reach out to them. We organize events where we present our work to C-level executives. This is a chance to get to know what our program is and what it can mean for them. We are also launching a pilot program in a collaboration with the Inter-American Development Bank, where corporations can apply and if they get chosen, they get to co-develop pilots.
MassChallenge is a startup incubator with presence in six worldwide locations. The Mexico City location opened in 2016 and works with startups from all over Latin America