Episode 161: Nurturing a Successful Startup Accelerator with Paolo Lombardi, Founder of Techpeaks
In this episode of Product Thinking, Paolo Lombardi joins Melissa Perri to explore founding the TechPeaks startup accelerator—they discuss the unique aspects of the program, including its focus on attracting international entrepreneurs and promoting collaboration, and the importance of planning and preparation.
You’ll hear them talk about:
12:17 - Melissa, who participated in the accelerator in 2013, describes it as a transformative experience and highlights the program's unique approach as a "People accelerator." By attracting international entrepreneurs, Techpeaks fostered collaboration among individuals with diverse skills and backgrounds. This approach aimed to import an international perspective while connecting with the local university and research community. Paolo said that Techpeaks were happy to accept people that didn’t have a business idea, but could work well collaboratively.
25:41 - Paolo emphasizes the cultural diversity within the Techpeaks program and the learning experiences that arose from working with people from different backgrounds. She shares an example of a cultural clash between an Italian woman and a Russian participant, highlighting the importance of understanding different communication styles.
48:54 - Paolo says that the issue with corporate accelerators is that they are often not comfortable with taking risks, or quick decisions that imply risk. Although they might contain talented managers or workers, often they can’t gauge risk quickly enough to be able to control it. He says that in corporate environments, this awareness of risk is not common, but for startups “in the wild” this is an intuition.
58:49 - Techpeaks encouraged the use of lean startup techniques, which allowed participants to iterate and pivot their ideas quickly. This approach fostered a culture of experimentation and learning. Paolo recommends starting with a small programme that lasts for a weekend, or two or three weeks, with a very narrow niche value proposition—this will test your ability to deliver on that.
Episode Resources:
Other Resources:
Melissai - 00:00:01: Creating great products isn't just about product managers and their day-to-day interactions with developers. It's about how an organization supports products as a whole. The systems, the processes, and cultures in place that help companies deliver value to their customers. With the help of some boundary-pushing guests and inspiration from your most pressing product questions, we'll dive into this system from every angle and help you think like a great product leader. This is the Product Thinking Podcast. Here's your host, Melissa Perri.
Picture this. You're working in New York City as a product manager for a scaling SaaS company, but you get this insane offer. You can move to the Alps for a year to participate in a startup accelerator run by the Italian government. You'll be thrown together with 67 people from 20 different countries to create companies and pitch to get 25,000 euros equity-free. Housing is covered. You get a stipend for food and incidentals. Do you do it? Well, that's what I did back in 2013. And today we're going to talk about it. And we're also going to be talking about how we build great startup accelerators. Welcome to the Product Thinking Podcast. We are joined by Paolo Lombardi, who is the mastermind behind the TechPeaks Startup Accelerator, which I participated in. He has since worked with countless countries and organizations to implement startup accelerators and grow them to be successful. He co-wrote a book called Startup Program Design, documenting his findings. And today we're going to dive into what he's learned. But before we go talk to Paolo, it is time for our segment on Dear Melissa. So this is where you can ask me all of your burning questions about product management. If you have a question for me, please go to dearmelissa.com and I'll be sure to answer them there.
Today's question is all about analytics. Let's dive in. Dear Melissa, our company is in the process of adopting product analytics, and I've been tasked with taking it to the next level. At the moment, I got our analytics platform up and running tracking events, but we have many teams and one single product. Some teams are tracking just a few events and some others, a lot of them. In addition, now that we have data, there is no process on how to process it and use it to bring meaningful insights. How would you approach a situation to get our company to be data-informed and to include analytics in our routine processes?
This is a really great question. Thank you for asking it.
So getting data is half the battle. Now we have to actually learn how to use data. So the fact that you're actually implementing this is fantastic. Thank you for taking the first leap. Now what you want to do is try to figure out where data becomes important to make decisions. So what you need to do is outline your decision-making process. So when do we create product strategy and at what timeframes and at what inflection points do we need to evaluate things and make a decision? So I can see data being used in a couple different ways. One, to create strategy. So at the beginning of something, if you want to inform a new feature, inform a new product, inform a new vision, whatever it is, you're going to need data to do that. So there's that creation piece. Then there's the monitoring piece. You need data to make sure that you're still on the right track. Is it healthy? Is it working? Are we doing great things? Then if you find out, no, while you're monitoring, it kind of goes back into that creation and problem diagnosing issue. So we kind of go back through this loop. So you want to create, diagnose problems, and then you want to go back into monitoring. So when you think about product management, I'd separate it into those two pieces for now. And you're going to need different levels of data and different information depending on where you sit in the organization. So executives are usually looking at things like financials and they do want to know about usage and some of those product metrics like adoption and things like that as well. But they're going to segment it slightly different.
They'll probably be looking at it at a larger scale than you would for a single feature and longer term. For example, executives probably want to know things like usage of the product by different types of personas, right? By different markets, by different industries, by different size companies. You as a product manager working on a feature inside that product are probably going to want to know some of those things as well. But also like usage in the last 30 days, usage throughout funnels in your product. If there's workflows, are people falling off at certain steps? You're going to want to know how quickly people are actually adopting those different features. So you're probably going to be looking at it more on a granular level, whereas executives will be looking at it at a holistic level. And that doesn't mean they won't slice and dice it a little bit as well, but you're just usually going to have a little more of a narrow focus if you're a product manager working on a team or a piece of that product. So when you think about it, you want to think about what kinds of information do I need to actually diagnose problems and set strategy? So you want to look at like what metrics keep your product healthy? So where's the value actually coming from? So people using your product is a good indication that it's helping them. It's not the only indication. You still need to go do user research. Data is not going to tell you the whole story here, but bear with me as I say this, right? You're going to say people using the product is a good indication that they're getting some value for it. So who's using it? How often are they using it? Is that what I actually expected?
You're going to want to create some kind of funnel in your product as well. What do I expect them to do? When they come in here, do I expect them to go to different types of product, adopt different type things, look at different, actions? That's what you're going to want to instrument and actually watch. So you're going to want to see if they get through those funnels, if they're consistently using them, and what types of people are actually using them as well. That can help you set thresholds and figure out, are people dropping off? Are they using what we expected them to? All those different things. You're also going to want to look at things like time to adoption, time to complete tasks. All of these things can help you diagnose if there's problems. Now on the monitoring side, once you figure out how people get value and how they should be using your product in your head, right? You create a dashboard that allows you to go back and check on these things and see if they're trending up or down. Then you can also pull cohort analysis out of these things and try to say, do certain types of users act differently than other users? Which can tell or signal that maybe there's not as much value in one cohort as there is another. So what you want to do, and this is the tricky part out of all of this, is like, model out how you think people should be using your product based on the research that you did to build that product, right? This is what, we believe should be happening. And then you use that data to check and see if that's true. And if it's not true, that's showing you there's a problem. That means go fix it. If it is true, that's great. Put it on a dashboard, look at your health metrics. And then when things become a problem, that's when you intervene. Also, get into a system where if you are going to be creating strategy or proposing new products or features, you're using this type of data to back it up. So you go, hey, we believe that we should go build out these features for this type of customer that we have.
Can you use that data that you have to show that this might be beneficial for them? What problem is it actually solving? That's what it means to be data-informed. It means using the data in your organization to back up why you should be doing things and modeling it out. And a lot of this comes down to that model, creating models and putting assumptions in there about how you think things should be running and then checking to see if it's true. That's the cycle we're getting into. Now, like I said, quantitative data is not everything. So usually when you diagnose something and say, hey, this is a problem, you need to follow it up with qualitative research and then go figure out why that problem is actually happening. So you want to get into this cycle. Quantitative is not the only type of data you should have. You should also have qualitative data too. So that's where your user research comes in, partner with your user researchers, go out there, figure out what's going on. Sometimes that problem might be diagnosed in qualitative interviews first, which is fine. So then bring that in and then see if you could back up that it's happening to more than just that person using quantitative data, right? So it's a little bit of, of a give and take going back and forth. So again, think about where you make decisions. Think about how you monitor your strategy and find out if it's working, put those things in place and that'll help you diagnose problems. All right. Hopefully that helps you. Good luck with your analytics journey.
If you have any questions for me, again, go to dearmelissa.com and let me know what they are so I can answer them on another episode. Now let's go talk to Paolo.
Ads - 00:08:08: Did you know I have a course for product managers that you could take? It's called Product Institute. Over the past seven years, I've been working with individuals, teams, and companies to upscale their product chops through my fully online school. We have an ever-growing list of courses to help you work through your current product dilemma. Visit productinstitute.com and learn to think like a great product manager. Use code THINKING to save $200 at checkout on our premier course, Product Management Foundations. Welcome, Paolo. It's great to have you here.
Paolo Lombardi - 00:08:42: Well. Thank you for having me here. Great to be here, Melissa.
Melissa - 00:08:46: So you have been working with accelerators and incubators for quite a while now. What got you into working with these things, with these startups?
Paolo Lombardi - 00:08:56: Everyone has different paths into this world. My personal one was through startups myself. So I founded a couple of startups. One of them was with a university where the program was. And I went through all the hustle of getting funding from local government, from business angels, and understood how that could be difficult in Italy. Also, meeting with problems with doing something that comes out of research with patents and intellectual property protection on that. So at some point, I just got passionate about the community, the startup community locally where we were operating and got into it and got the opportunity to raise some funding for a program from the local government. And we're speaking of a region in the North of Italy, that is a full in the Alps. It's near the Dolomites that are very well known internationally and for skiing and other resorts. And it was not really a startup hub. The university is really good. Had been ranking top university in Italy among the top three in their category for several years in a row. The startup ecosystem was really small in 2010, 2011 when I was there with my startups. And there was a need to start a community, and I started doing more events. So meetups with friends. At the beginning, we were four, then we became 20. Then at some point, we had like 120 people on Facebook group of the community. And thanks to this community activity, I was contacted by the local government that said, we'd like to do an accelerator. And can you put together a business plan? And I did. And we asked for a bit more funding than what they initially thought it would be sufficient, but in the end it was approved. So that was my pass into programs.
Melissa - 00:11:01: And then that's where our story picks up. So you are one of the brains behind the TechPeak Startup Accelerator, which we're talking about now in the Alps, which I joined in 2013. And I think everybody thought I was absolutely insane to quit my job in New York City, go live in Italy for a year, working at an accelerator that was run by the Italian government in the university there. But it has to be one of the most transformative parts of my career. So it's been so much fun for the last year. We've had our 10-year reunion for everybody listening since we did this in 2013, this past year. And we all got together. A bunch of people came back from the accelerator, and we were talking about our experiences leading to TechPeaks and what it looked like afterwards. And I thought that was so exciting. So Paolo and I have been catching up about what his experience was there, which was a little bit different than the participants. And I love to hear about how you came up with this, because TechPeaks was not just a wine combinator or normal startup accelerator. You really pushed for this aspect called the people accelerator. Can you tell us a little bit more about how you designed this particular accelerator? Why did you decide to do a people accelerator rather than a typical one that you would find? And how did you kick it off after you got that funding?
Paolo Lombardi - 00:12:17: It's an interesting story because what we did, we had a few exceptional advisors that I want to mention, like Evan Nisselson was with us. And there were also Earlybird Venture Capital firm that was supporting us at the very beginning. And we gathered about 20, 25 people from the local community that included Evan, myself, and the VCs, business angels, professors of university, local startups. And, well, actually, that was probably the only component that was not there, unfortunately. Well, there were professors, definitely. Local government was there. So we did our two-day co-creation workshop, where people put whiteboard stuff with stick notes like this one, like problem solution, and everything that was on our mind. We had like an opening phase, closing phase. And when we entered that workshop, we had some basic idea. It was really during those two days that it go live. And we identified our problem as being without international entrepreneurs, we could possibly attract some local people. But, we thought that in the digital sector, especially, well, now as well, but it was true already in 2012, you need to be born international. You can't start a business thinking about like your local market only. It needs to be a vision that goes global or as international as possible. And we wanted to import that vision.
So we wanted to import international people to help us build those kind of companies. Another problem we had seen was that we had a lot of research. So we had tech, but we didn't have people that really were entrepreneurial enough. So we wanted to pair our technology and maybe even some people from the university as scientific advisor, not forcibly as a co-founder with entrepreneurs. So that's when we clicked on the idea. We actually want people. We don't necessarily want ideas or businesses. Because they might have their tech already, or they might have a lot of ideas about what tech they need. Instead, we actually want a little freedom to push in a bit of our technology and pay debts and show them what we have here. And maybe, you know, create mixes with local researchers and maybe some alchemy comes out. That's why we decided to go a bit earlier in the precede stage rather than the seed stage, which is typical of accelerators, because we hoped that would be a more fertile breeding ground for the kind of companies that would utilize tech coming from the local university. And so, once we understood the problem in this way, then it came a bit more natural to say, okay, then we need an international program. We can do something. We need to position with a value proposition that attracts people who really from all over the world. And we want to accept people who don't have a business idea because actually, that's fine. We we're going to build it with them and we're going to build teams here. And I had a lot of influence from startup weekend. I got engaged, involved in startup weekend back in 2010 when they first came to Italy for the first time in Venice. And I happened to win the first at the weekend in Italy. From the following couple of years, I was really involved in the community around that. So the concept of getting people together who don't know each other and create a company in a relatively small amount of time. Then that company actually can scale was in the back of my mind. So I witnessed it could work. And so we thought, imagine what happens if we put people for six months together instead of just three days, they will build amazing companies. That's how the idea of TechPeaks was born.
Melissa - 00:16:33: I loved that you didn't require a company because I didn't have a company idea. And I remember the way that I got notified about this because everybody's like, how did you learn about a random accelerator in Italy? And there was only a couple of Americans. There wasn't a lot of us either. But I was working with Lean Startup Machine in New York City with Trevor and Grace and helping them coach on the weekends, putting that into place. And my job as a product manager and UX designer, and I was working at some startups and scaleups around New York City at the time. And I remember hearing about this and Trevor told me I should apply. He was like, you should apply for this thing. Like, why don't you just go to Italy for a year and build some startups, Melissa? And I was like, I can't quit my job in New York City and just peace out to the Alps. And he was like, no, you should really do it. And I think there was just one day I was having a really bad day. And I came back and I was like, you know what? Why not? Why can't I just go build companies in the Italian Alps? That sounds like a great idea. And I applied. And I cannot believe it, when I got in. I think it was like a month later, you let us know that we were in and I had basically two or three weeks to pack up and move to the Italian Alps, which was insane. That was the most spontaneous thing I've ever done in my life up until that point. Let's put it that way. Most spontaneous thing. And the thing that I really loved about it was like you were using Lean Startup techniques and that I was very passionate about this at the time. I believed experimentation, putting this into practice was really key. And I've been doing it as a product manager, but never and a designer, but never as a startup founder at that time. I love that. It was just a mix of people and we would figure out the ideas. I didn't have a great idea. I was hoping somebody else would, because I like working on other people's ideas, too. And we covered housing. So we had a place to live in Italy and we got a stipend for food and stuff during the month. And then you could pitch for 25,000 euros. So when we come up with the idea, we'd pitch and we could get that money to actually start. So for me, on my end, I was like, first, I went, oh, I couldn't possibly do this. And then I did it. And to this day, it's probably the best decision. I've made in my career, which is very exciting. But from your perspective, tell us what it was like when you put out this call and all of us responded and we had to send you YouTube videos. This summer, we were all watching our YouTube submission videos. Some people still had them on public so we could go back and watch it. But tell us what it was like to get all these applications. How would you choose the right mix of people? And how would you decide on 67 of us?
Paolo Lombardi- 00:18:56: Yeah, the first edition was 67. We had up to 100 slots, but in fact, it's good we stopped at 67 because that was quite a sizable number for our capacity at the time. It was an incredible bet and an incredible time for us too, because another source of inspiration we had was Startup Chile that was doing a government program and bringing people from all over the world. So there was a big overlap with what we wanted to do as well. So we started them. Something they were not doing was this idea of getting people without businesses. They were bringing in teams that were early stage but had a business idea. So there was that element that no one had tested at that scale with an international program that was coming from, you know, like Startup Weekend kind of settings that were really local. It was a big bet. So we had no idea of how many people would get interested and also what kind of people would apply. It was so crazy when I was driving to the airport one night, I was late for my flight and I get a call from this guy on the team that tells me probably I've got good news and bad news, which one do you want to hear first? And they said, well, let's start with the good news. And he said, well, it's actually the same because our websites went down because we have too many applications. So we were blown away by the number of applications we received, which were north of 600, then completed applications, but people started it, then didn't complete it. So, and we decided to look for the typical mix of startup, of a digital startup. So we were looking for product management/design skills, tech skills, and sales and market skills. So those were the three. So the hustler, the designer, and the hacker. Those were the three profiles that we were selecting for exactly to get this mix. And as you may remember, we ended up also accepting teams that were already formed. And we were looking for like similar characteristics that they had a mix because they could be an example for the people who didn't have a team yet. So we want the good examples that can inspire and be part of the same group, could inspire the people that were, you know, instead of forming the teams, according to the problem we were trying to solve, right? And part of the design, you mentioned free accommodation. And we tried to study the people that would come.
We were asking people to quit their job or quit whatever they were doing and come for six months. So imagine, and on a short timeline, so imagine you're looking for a place in little Trento or well, 100,000 people still not without, you may speak some Italian yourself, but the average participant without any basis of Italian and the average local without any skill in English. So we were like, that's, it's going to be impossible. So we listed the number of things that were essential to the program and to actually people joining. So accommodation was there. Wi-Fi, obviously a home that didn't come as quick as possible, but I'm laughing because, well, you know why, but for everyone else, because, you know, this happened so fast and doing it from government agency, we were not 100% government, but highly connected. It has some limitations just because you have the taxpayer money justification thing that you don't have as private, right? So as a government related entity, we had to justify every expense because obviously in democracies, you get audits on how you spend taxpayer money, right? And that was quite challenging to justify. We were giving Wi-Fi to people at home when we already have Wi-Fi in the office, which we are also providing for free. So we managed to in the end, if I remember correctly, but it took a bit more than what everyone wanted and hoped for. But yeah, so we were navigating these problems as the applications were coming in. And then we had these amazing videos of people like doing crazy things. I still remember someone filming themselves while dark and then the light would turn on and they would appear like, like this and then turn on the chair, crazy applications that we got. And obviously we were balancing a little bit with the seriousness and commitments and the CV and what people actually could show their done up to that point in their career. And they could bring to the program. So for the first round, which we corrected later, we didn't do on face-to-face interviews, if I remember. It was only based on the video. And that's something, again, we corrected later on, because we felt that that interaction was quite important.
Melissa - 00:24:19: What did you find was important about those interactions with the face-to-face part?
Paolo Lombardi - 00:24:24: When you work in pre-seed, it's a lot about, it's more of an HR kind of exercise rather than an investment exercise. So especially with a program like ours that was meant to put together people from different backgrounds and different nationalities, if you trust a two-minute video that can be, I mean, it's for sure sincere, the applicants have all the luxury of tweaking it. Put themselves in the best possible light. And instead in the interactive interview, you can exercise a bit more of critical thinking with the person that you have in front and say, okay, this would actually fit the program, this person, or it's going to be difficult to get this person to work with other people or similar things. And we saw some of those individuals in your bash too that almost self-isolated themselves, right, after a little while. So when we learned that there was that risk, we want to actually run more serious interviews with the staff that was interactive.
Melissa - 00:25:32: There is also so many cultural things that I learned from that program. Since we had, how many countries did we represent?
Paolo Lombardi - 00:25:40: So in your round, there were about 20.
Melissa - 00:25:42: Which is funny because people ask me when I travel for conferences, they're like, how do you know all these people all over the world? And I'm like, TechPeaks. There was a time for like the first six years where I was doing conference speaking that literally every single country I went to, somebody from TechPeaks was there randomly. I went to Japan and Giacomo and Eliana were there on vacation. I was like, how is it that every single country I go to, I run into TechPeaks people? I went to Israel, somebody who lived in Ukraine and moved to Israel. We like met up in Jerusalem. I was just like, this is the wildest experience for me to know people literally all over the world, which was amazing. But I think what was interesting for the accelerator and for me, it was such a great learning experience. But one, I think everybody got through a little roughly at first was the culture clash, right? Like of how people work, how people communicate, how, you know, different cultures and different countries collaborate over different things. I remember one thing came to a head one day where I heard one of the Italian women who were helping the organization Maria. She was screaming in another room at a Russian guy. And we were like, what happened? What's happened? She's like, you come in here every morning and you ask me for this and this and this. And you never ask me, how I am? You never say good morning. You never ask me how I'm doing. Just I need, I need, I need this. And then the poor guy from Russia is looking at her going, we just don't do small talk like that. Like that's not, I didn't know. Like I didn't, I'm sorry. Like I didn't mean to offend you. I just, that's just not how we talk to each other in Russia. Like it's just not part of the culture. And I thought we all managed to work together very, very well. But some of those experiences for me were so eye-opening and so interesting about how to learn with different people and different types of people, different cultures, different backgrounds. And I thought that's what made TechPeaks so special is like we just had all these people kind of thrown together and it was like, go collaborate.
Paolo Lombardi - 00:27:36: Exactly. When you have programs like Startup Chile that I mentioned before, that brings teams that are already formed, you always have a bit of cultural adaptation that you have to factor in. But, it's not as massive as what we had in our program because the idea of forming teams in this kind of setting that you're describing is much more challenging than just having teams that already work on their own to collaborate a little bit so that they can get advantage from each other, right? An exchange-like experience. So it was challenging. I think we had a bit underestimated that, in the first round. And wee had like someone on the team. She was not from Georgia, but nearby. So that area, someone that was Brazilian that was near South American as well. We had another person on the team that was Russian and Evan that was American. So we did have a bit of a variety already on the team, either on site or consulting part of the enlarged team. But we did underestimate that aspect, in terms of how we communicated. So, we were expecting people to be entrepreneurial and to be flexible so that we were a startup in essence as well. Yeah, we were a government program, but come on, it was first round. We all know there could be problems. It's an MVP. That's how we were living the experience as the team. We were like, let's get this out onto the market and then we'll work around it. So we do a bit of permission innovation, which was unfortunately not a good idea because from a program perspective, first of all, you can't iterate very quickly because when you design a program, you have like this beast that lasts for like three, six months. And before you open the next one, you also need some planning and programming. So you can iterate once a year, twice a year, but you can't iterate during the program, especially if it's a government program. You have set rules out there. And then you have to deliver on the rules and respect the rules. Otherwise, again, when you should get an audit or how you spend taxpayer money, you can get in big trouble.
So you need to abide to what the rules you have set. And the other thing is we totally underestimated that the local government could have the same problem at a larger scale to the point that even if they wanted to help, they needed to pass laws, directives or whatever. I'm not a legal person. So this might not be the right law. But, they needed to pass decisions through the local Parliament, let's say, or Congress to actually enable some things like, for example, the distribution of the 25,000 euros we had in funding. And we had no idea that would take like. Incredible amount of time, much longer than what they thought and what they told us and what they thought and what happened. And for everyone, the money was supposed to come at the beginning of the program. And people like you and your teammates were pitching for the money, I think, in June. So the program started 30th of May or 31st. And then so early June, like 10th of June, we started with the pitches and we were set to assign all the money by end of June. And we did, but the money arrived in late September. So that was because the government also underestimated their times. So there were a lot of underestimations of the cultural adaptation that you said, the way we communicated this stuff that was taken like from especially some geographies or like, no, you promised that. It's in the law. It's written in the rules. Now, you know, I'm going to get you to jail if you don't give me your rule. We were expecting flexibility that came from some people, but not from others. And we were also expecting that, you know, like the government could foresee the issues they would have. And instead, it was the first time for them too. So it was really difficult. So a lot of underestimations first time. And that is another thing with designing a structure programs is that probably that idea of MVP, which is still in the lean validation theory, which is still very valid, I think, but needs to be instantiated, implemented in a different way, probably by doing a different program or a smaller program, or we could have made like one week program or two weeks bootcamp in the summer.
Melissa - 00:32:30: Let's talk maybe about what you learned from that one and especially about Startup Accelerator Design because you went on to write a whole book about this and do this many, many other times. What do you think really worked at TechPeaks and would you learn not work and would you iterate on for the next time or pull through into your book or into designs of other accelerators?
Paolo Lombardi - 00:32:50: It was a great idea. I still think it's a great idea to do the co-creation. So when you start with a program, it is an initiative to put together different worlds. It is one of those connectors. And that puts together classic programs like accelerators, Y-Combinator, or textile style. They put together investors with startups. Then you have the corporate accelerators. They put together a corporation with startups. In this case, it was university, local ecosystem, and a startup. So it's always a connector. So what I think that worked was all the actors together. And I mentioned before, we forgot the startups in that co-creation workshop, which I would include, and I include it later on, and do that co-creation part. You want all the actors because you want to spot immediately opportunities for connecting the different actors that you might not do if you are alone and thinking about that. So the other thing that really worked for us was this international opening. So we had people from Russia, Ukraine, US, and it was amazing, especially if you think of where we stand now, thinking back that all people were really collaborating in the same environment and created this community and network that survives over 10 years after the end of the program, as you mentioned before. And it is something that really worked well for us. Some of you guys from the first round served as in the selection committee for the second round and then helped people out from that round also later with their startups. And so the international community really works well. And that worked quite well, I think, was inspiring the local ecosystem. So a lot of people still look at TechPeaks from the region as a program that was leading the way in the time. And then we stopped it at the end of 2015. And I still get people, when they meet me in Trento especially, they're like, oh, we're missing TechPeaks. So the local community really got to realize the potential of the university and region thanks to the program. So those worked really well.
Things that didn't work as well were the connection of the researchers and the research with the program. It is difficult, and it does require a lot of special design for that to happen. We tried something in the next round, which worked a little bit better, but still, it was an area that needs a lot of planning and preparation. So you need to prepare the research and the researchers in a way that they can actually really interact with entrepreneurs. And the other thing that did work in a couple of cases, there's one startup that was born in your round, I'm sure you know pretty well, but is still alive today. And that was born, actually, the CEO and CTO didn't know each other until they came to the program and they got the startup funded. They participated after our program. They went to an accelerator program in the Netherlands. They had raised the first round of funding. Then they came back to Italy. They raised a Series A from a VC. That company is the typical success case that we would like to see. But it didn't happen at a scale, at the scale that we were hoping. So there are a couple of other examples like that, but it was not happening on a scale. And that is still something that I wonder if anyone cracked, because, I'm not sure that call has been cracked at scale.
Ads - 00:36:54: Are you eager to dive into the world of angel investing? I was too, but I wasn't sure how to get started. I knew I could evaluate the early stage companies from a product standpoint, but I didn't know much about the financial side. This is why I joined Hustle Fund's Angel Squad. They don't just bring you opportunities to invest in early stage companies, they provide an entire education on how professional investors think about which companies to fund. Product leaders make fantastic angel investors. And if you're interested in joining me at Angel Squad, you can learn more at hustlefund.vc/mp. Find the link in our show notes.
Melissa - 00:37:27: So for me, my perspective was I felt like we did in our round, and I know you solved this for the second round, and I'd love to hear more about that because I don't know a lot about the second round. But the time for us to form our teams, figure out who we wanted to work with, figure out what our idea was, and then pitch and lock it in was extremely short for us. We had like less than a month. We had like a week or so. I think two weeks, right? And for me, that was really hard because it was hard to figure out like, do I really want to be locked in legally with these people? Do we have an idea? I started off on like one team. We couldn't come up with an idea. We were like not idea people. And then I ended up in another team. And then we worked together the whole time. We got the funding. We did that. And then at the end, I decided to leave because it was not just working for me. They went on. But I think that was an interesting thing about like, how long do you give people to norm and form and experiment and figure out exactly what it is that they want to work on? And then also, how many, like, what's the balance of bringing in people who have good ideas or some traction, let's say, on their idea before you put them into a group? Like, do you have a lot of those people? Do you have a mix of those people? Do you bring in some existing startups? That to me is really interesting about how do you get that mix right so that you can still encourage innovation, but let people have enough time to figure out what it is that they want to work on or build.
Paolo Lombardi - 00:38:48: We had several different aspects here. The idea of bringing people without any traction was led by the problem that we wanted to solve. That was the ability of mixing people with patents and research that we had. In the second round, we actually changed that dramatically. We did accept people who had an idea. And in the application form, we were happy for them to share their idea, even if they didn't have a team, which helped us also screen the people a little bit more. Because that would give information whether we had actually research that could help them or not at all if it was something completely off. Quite sincerely, you may remember there was a guy in your round that wanted to basically have a truck, to sell food around in the streets or something like that. If you have an idea like that, then our program that was highly based on AI and digital technology might not be the right match. So we did encourage people to share their ideas because all ideas are good and they can be successful businesses. But if we can't help with that specific business, it's losing time on both sides. So we did encourage people in the second round to share ideas, even if they were alone without a team. And the other thing we did was we added time. So instead of those 10 days you mentioned, they actually had two full months.
So the program was actually, second time was four months long, not six months long. And we gave two months to form the teams and come up with an idea. But then there was a hard stop in any case. So people who didn't have an idea at that point or were not in a team, they would be moved into kind of consultancy mode. So they would like help the others, but they wouldn't be able to pitch for an idea on their own if they hadn't formed a team to the point. So when we were operating, we were in 2012 for the design for the first round and 2013 for the design on the second round. And we were unaware of other experiences in the world. And it turns out that pretty much at the same time, maybe even a little bit earlier than us, people in London were starting Entrepreneur First, which was kind of a very similar idea, was based on getting people with PhD together with people without a PhD, but an MBA. And so in London and then get funded with ideas that were coming from research or corporates. And I actually know very little of their early rounds. I know the program very well as it runs now. Very, very early rounds were probably very similar to what we were doing. What they're doing now is a program of, I think, exactly four months, where the first two months are dedicated to forming the teams, and they have special activities on that. Then there's a decision gate, that is, you have to pitch your R&D and your team, and then you have another two months of more classic accelerator on the formed teams, which is basically what we did for round two. And again, we didn't know the guys, Entrepreneur First, at the time. It seems that we independently got to the same conclusion. And there is a more recent program that is called Antler, that I don't know if they came up with the idea completely independently. It seems like they did, but they ended up with the same format. Again, like two months for creating the teams and that decision gate, and then two months of acceleration later. So that's kind of the state of the art today for these kind of programs that start from the people.
Melissa - 00:42:49: Maybe we should talk about this too. Like we've been talking a little bit about accelerators and incubators. And I think there people throw those two terms around like they're the same thing. Are they the same thing?
Paolo Lombardi - 00:42:58: A lot of debate. I'm not an academic in that field, but I'm sure that some academician could tell us the exact differences. From my perspective as an operator, there's a lot of gray area and it does depend actually on the design. So one of the points we're making in the book that you mentioned before, and by the way, I have here, which is the Program Design is that we are at a level of maturity in this field that allows us to blend different models. And at the beginning there was the incubator or even before that, the corporate venture capital and then venture capital without corporate and then the incubator. And there were models that were coming one after the other and the accelerator innovated the field around 2005 with Y-Combinator first round. And we have experimented a lot. And I believe that like you have different products for different problems. When you design a startup program, you're basically a product designer, you're a service designer, a product manager, and you need to go through the same sort of analysis that you do when you create a new product, a new digital product.
So you go look at your customers and here you have the complexity that you have a list of customers, the startups and the funders, whoever they are, it could be business angels or private money. It could be a corporation. It could be government. It could be university or a multiplicity of these people. And so when you create, you may call it accelerator or incubator or whatever you like, but at the end of the day, it must be something that is targeted on solving the problem that you're trying to solve. So that's where it becomes difficult to trace a line. Because you can't say, oh, this is a purely AI product and this is a purely non-AI product. And the same way you can't say this is a pure accelerator, this is a pure incubator, because it doesn't make sense. If you're about to solve a problem as a product manager, then you want to make the best product for your customers. Then you call it whatever you want. And you shouldn't be limited by categories. That's the point. So yeah, there is probably, you know, historically there's a difference incubators were more based on delivering cost-saving value proposition. So you would share sources, like, space and Wi-Fi or labs. Whereas accelerators come more from a market-fits sales value proposition or fundraising value proposition. So it would be more about sharing mentors and the access to VCs and business Angels. So, again, that, that is something incubators could do as well. And accelerators can provide you with coworking space and stuff. So it is really about what you're trying to solve. So what are your objectives? What you can offer as an organization? So, can you offer funds? Can you offer mentors? Can you offer technology? And what kind of startups you want to serve? Is that early raise stage startups or non-funds Startups? Because the problem you're trying to solve is similar to what we were trying to solve? Or are you trying to help like late-stage startups to internationalize? Or what is the market that you're trying to solve on the startup side as well?
Melissa - 00:46:42: I also think like I've seen a lot of different approaches from corporations, and I'm curious what you think works. And I get what you're saying where it comes back to the problem. The problem that I see most corporations want to solve is baking innovation into their ecosystem, right? Like they're usually really big at this point. They want to be able to compete still with the startups out there, with new companies coming out there. And you ask them like what problem you're trying to solve. They're like innovation, like we need more innovation. And I've seen like two different ways of them doing it. One accelerator I saw was part of a corporation that was gigantic, was Telecom. And they took a bunch of outside startups in, incubated it, gave them fundings and gave them a space to work at. One thing they didn't do that always struck me as really odd is they didn't make any connections though back to their company with those companies, right? Like they said, you cannot have our resources. We will not like introduce you to customers. We will not introduce you to our tech people. Like you just basically exist over here, just like any other accelerator, pretend like we weren't funding this. And to me for the objective, that was strange because they took all different sorts of startups and they wanted to harness innovation and have a new way to start it, but they didn't want to help leverage the things that they could help them with, which was like customers, introductions, technology, working with them so that they can build those things. So I thought that was strange. On the other side though, I see corporations also do this thing where they take a lot of internal people and then they go put them out somewhere else in a different office. And then they tell them to go create startups. And they usually don't give them a ton of direction. It's just like, go innovate. And then on that side, I've seen that kind of fail as well because some of them are like, I don't know what to innovate around, right? Like, go where, right? What are we supposed to be building here? And a lot of those people have never built startups before. They haven't really been in a startup before. They've worked for that corporation for a long time. They have never worked in a different environment. And that's to try to start with, you know, a couple teams and infuse more innovation back into their organization and try to shift the way they think and they work. That sometimes doesn't work as well. What works, right? Like if you're a corporation and you're like, we want to make sure that we are innovating, maybe change the way that we innovate, try to instill this culture into our organization better. Like how should you approach that?
Paolo Lombardi - 00:48:56: It does depend on where you stand on your innovation readiness path, because corporations are made of people and the processes. And depending on the corporation, one or the other might not be ready to actually welcome startups or innovation in the broader sense. You have like maybe amazing people really, really good, but the processes that the company has created over the years are just not friendly and vice versa. You could have like an accelerator that has been created to work with startups, but then the people are not ready. Also the other processes, apart from that specific initiative, are not ready to connect startups with the rest of the company. The first example you gave is one of the reasons why many corporate accelerators are historically failed. Organizations were creating a silo for this cool new initiative that maybe they'd seen out made by professionals and they said, well, that's easy. I can do it. Let's do it inside on our own, right? So we create these accelerators and we'll put like this guy who's seen, or these people, they seem very smart. Let's put them there to run the accelerator. They'll cope. They're a big entrepreneurial. They'll make it work. But then they didn't think it holistically as what comes after. And some of the most advanced examples of accelerators, they don't want to be called like that for marketing reasons. What they'll do is they start from briefs that come from inside the corporation. So they first engage the internal side. They engage engineering units, marketing units. They understand what their problem is. They transform that into a brief. And then whether they run a challenge. So some of them are called challenges or competitions or stuff like that. Others call themselves platforms, collaboration platforms. Others call themselves venture clients.
This is something that was born in Germany around 2015. And now it's quite well known in Europe. Not sure about in America or in other geographies. They all start with this, this idea that, first of all, so the most difficult part is to connect the startup after the acceleration with the internal side. So first of all, identify where is the unit that is ready to incorporate an innovation that comes from a startup. And do they have a clear problem? Do they know how once, if we find a solution, do they have the budget to actually work with the startup and run some pilot programs, and can they follow up? Do they have the right people in the vision for that? So when they have identified internal receptors, then they go out and look for startups that match those receptors. So somebody calls them matching programs, matchmaking programs. We call them solution-seeking programs, right? Solution sourcing. The concept is I have a problem that I have scoped and described, and I know the people internally who are working on that problem and want it solved for a business reason. And then I look for a startup outside. The old way of doing corporate accelerators is now a long tail. It's probably bound to disappear. So corporate accelerators that are just replicating the tech stars, Y-Combinator out there that are run by investors are doomed to fail because they don't have this prep work of internal partners. And the other example you gave is what other people call venture studio, venture builder, startup studio. And that is something that is actually being explored more and more in this moment. It's on the getting on to the hype curve, I would say. And it can work. But again, what I believe is that you need a lot of preparation. You need some marketing analysis. You need a clear need that has been scoped or needs to be scoped before the startup actually gets funded. And like a real entrepreneur's door, right? So if you start with a problem that is not there, you bound to fail. And some of these startup studios or venture builders, they are facing the same problem. They put some smart people from inside the company there. But it's just a sense.
And sometimes it's also people problems, because they are great corporate managers or workers, but they are not comfortable with taking risks or taking quick decisions that imply risk. And sometimes they can't gauge risk and control risk. So that's probably the thing. Very often they're smart people, so they understand the risk, but they can't gauge it quickly enough to really control it. And in corporate environments, that somehow is not a required skill. Whereas, of course, when you're out in the wild as a startup, that is an intuition that you have to have. Otherwise, you're bound to fail. So venture builders are promising. I think like, you know, solution sourcing programs, whatever you want to call them, a collaboration platform, venture client, they're very promising. I think there's a third case. There's quite promising for corporations. That is the ecosystem builder. That is, have something that is a platform. And by that, I mean something that is an enabler. So that can go horizontally on many people. It could be a technology. And then you create a program for startups to adopt that technology, that enabler. And that can be a boost for startups because that it can give them an asset that would be costly. It can be advantages for the corporation because they can increase adoption of their technology or test some new use cases that are out of the internal roadmap. So that is another interesting model that again, we call ecosystem builder.
Melissa - 00:55:31: What's an example of somebody who's doing the ecosystem building well?
Paolo Lombardi - 00:55:34: There's an example in the book. We had a sense that they were on the right path. I haven't got any updates since we interviewed them for the book, but there's a European company SAP that you might know, they do enterprise software, SAP. They created a program where they also iterated a little bit at the beginning because they started with the idea of a formula that would work and then they had to change it once they understood certain things, but the latest combination that I learned seemed very smart. So they had this brief discovery process. So they would look for internal partners. And then they would onboard startups on the SAP platform by giving them, since the very beginning, all the tools to connect to the platform and basically create a plugin that then could be sold over the platform to SAP clients. So for SAP, that's, they were creating this ecosystem of plugins that would add value to the SAP platform. And from the startup perspective, there would be a marketplace that they wouldn't have possibly thought of, or would have found a lot of problems and entering without the program that helped them go through certain steps that they needed to do. So, that that seems quite, you know, an interesting win-win for everyone involved.
Melissa - 00:57:04: What about the venture studio? Have you seen any companies who are doing that model very well?
Paolo Lombardi - 00:57:08: That was outside of the scope of our research. And that is because that was a conscious decision we took. Because it's a bit different whether you want to integrate external startups in your innovation processes or you want to create a new startup. The problems are different. In the first case, you are a connector of someone outside that is already wanting to do a startup or would like to be an entrepreneur like TechPeaks. But it's a connector. In the other case, instead, you probably have to hire entrepreneurs. We're not connecting entrepreneurs. You're looking for people you really have to hire them. I was saying before TechPeaks selection was a bit of an HR exercise. So the kind of issues... And you have only one client. That is the internal client. So whereas for startup programs like TechPeaks, for instance, or Y-Combinator, you have at least two partners, right? You have the startups and the funders. In this case, you just have the funders. And yes, of course, you have the market. But that's common to the startups as well. So it's different. So I'm not the lead expert on that one.
Melissa - 00:58:24: No, that makes sense because you were looking at more of how to connect the startups with them. So Paolo, after doing all this research and working with accelerators and incubators yourself, starting them up, what would be your advice for anybody who wants to start their own startup accelerator, whether it be a government or a corporation or maybe a group of people who made some bank and cashed in on their business? How do they get started and what should they concentrate on?
Paolo Lombardi - 00:58:51: Take it as a design problem. This might be obvious to someone, but it's not obvious to the majority of people who start on this bus for the first time. So if you take it as a design problem, as a product design or service design problem, then you're really thinking of who are my customers and what value proposition I can give them. Who are my partners? What are my internal resources? So basically, you can even draw a business model, canvas of a program. And I haven't seen that done many times. So just reflect about, think about really these things. What do you want to get out of the program? So your objectives, what you can offer. Not every company, every government organization is the same. And think about what makes you special. Because in this context, 20 years ago, well, almost 20, when Y-Combinator started with the accelerator value proposition, there weren't any other organizations offering that. So now there are thousands of organizations. So you want to treat this as like any other market where you want to attract the best companies, the best startups to work with you. And the best in general is not the best for you, typically. So you want to create a program that really tackles the needs of those startups you want to work with and design around that. And you can offer very special things. And those are the things you should put forward and not just do whatever, what all the others do. So think this through. If it's your first time, you probably want to start small. And bringing in the concept of Lean Startup or Lean Validation into this world, you can't do an MVP with a full program. It doesn't work. Because it doesn't let you trade, as we were discussing before, at the speed that you need if you're learning. So you want to start small with a small program, maybe a weekend or two weeks or three weeks, or a very narrow niche value proposition. Test your ability to deliver on that. And then if you succeed, you will have learned something. And you might have a bigger vision in mind, but start with a lower commitment and grow step by step from that. And then another thing is, it's the first time, look at experts. There are experts around, people who've done it, companies that offer this as service. And you might want to start, even do the first round with them. Or if it's that too much of a budget commitment, you want to serve as a mentor in one of their programs, or you want to help in other ways and kind of a give first attitude. And then from there you learn and you try to understand what you can do really for the startups.
Melissa - 01:01:52: Great advice for everybody out there who wants to get started with this. Where can they find your book, Paolo?
Paolo Lombardi - 01:01:58: It's actually only on Amazon and more-
Melissa - 01:02:01: So Startup Program Design is on Amazon. We will also put that link in the show notes. Thank you so much, Paolo, for being here with us. We will put all of Paolo's contact links and for you to learn more about him in the show notes if you go to productthinkingpodcast.com. And thank you so much for listening to this episode. We will be back next Wednesday with another guest. We'll see you next time.
Paolo Lombardi - 01:02:21: Thank you, Melissa.