In my first week in the Silicon Valley, I attended a meetup organized by Founder Institute. It was advertised as a meetup for aspiring entrepreneurs to ask questions about how to launch a startup in the Silicon Valley. I wanted to learn how Silicon Valley works behind the scenes, and this seemed like the perfect segue.
The meetup started with a round of introductions. Around 25-30 people were in attendance – they introduced themselves, their current occupations, and their pet projects that they want to convert into successful startups. It was a mixed group ranging from serial entrepreneurs to corporate professionals looking to break into the startup world. The most interesting attendee was a 15-year old high school student who already has an app in the making.
The speaker at the event was founder of the Founder Institute, Adeo Ressi. The first slide of the presentation was a photo of Elon Musk, with Ressi telling us he was Mr. Musk’s roommate in college and that he had spent the previous weekend in Mr. Musk’s company. It was supposed to impress the audience and establish credibility, but I found the name-dropping to be a bit off-putting.
Having said that, I like the concept of Founder Institute. The institute runs a 3-months course in which individuals work on their startup for 3 months. Not everyone gets in. You submit your application and the admission team reviews the application. If selected, you pay $2200 (early bird) or $3000 (normal fee). The course lasts 3 months and the class meets every Wednesday.
Over the course of 3 months, you work on sales, legal, marketing, perfecting your pitch – basically all things you need to do to get your startup up and running. You also get access to 20-40 mentors – all industry leaders – and get the opportunity to have your idea vetted by them. You may pivot several times during the process to align your product with the market needs.
There is also the Shared liquidity pool: Once you graduate from the program, you enter the shared liquidity pool. As I understand it, you commit certain percentage of your profits to the liquidity pool, and so does every other graduate. When one startup of all the startups in the FI list makes a huge profit, everyone gets a share of the pie. As Ressi put it, that share can be thousands of dollars. Not bad, right! I am not sure what happens if your startup fails – if you are still a part of the liquidity pool or not.
I think the idea is valid. If you are passionate and sure of your idea, it makes sense to invest $3000 and 3 months to get help from a one-stop source instead of trying to handle all business-related functions, such as legal, registration, sales, visa and so on. A single, systematic, step-by-step process to make your startup functioning seems like a good idea.
The most enticing aspect of the program is the access to the brilliant minds of SV. You can talk to mentors that normally would be out of your reach. And if you do somehow happen to meet them, might not have enough motivation to spend their precious time and energy on you. With the shared liquidity pool of FI, the mentors also have vested interest in your success – if you succeed, they stand to make a lot of money. It’s a comparatively easy way to gain access to the shared mind-space of these successful entrepreneurs.
Another positive aspect about the program is that you can form your core team during the course. A graduate of the course offered an interesting perspective – You do not form a team at a Hackathon over a weekend. Instead, you form a team by working with them over a period of time, getting to know each other, how you handle pressure as a team, and how well do you get along even when things are not going great. I think spending three months with people is a good amount of time to figure out if they can be part of your team.
Founder Institute doesn’t consider a failed startup as a failure – and I agree with them. It’s better to know that a startup idea is not viable enough in the early stages is much better than investing a lot of time and money into it and figuring it out years down the line. Three months is a pretty decent time period in which to fail. As the startup motto goes: Fail fast, fail often.
The only shortcoming I can think of is that program does not schedule any time for actually building the product. I think they assume that either you have already built the product or will work on the product but will not pay as much attention to the business side of things, and hence they focus on business activities instead of building the product. Also, they focus more on aligning the product with the market rather than just keep on building the product without any validation.
All in all, it was a very informative experience. I wish I could stay back and network with the attendees, but I had to rush to another commitment. Looking forward to interacting with them next time!