Four classes of startups in the books over two years and Bay Area incubator AngelPad ”hasn’t had an oops” yet, according to co-founder Thomas Korte. Well thats about as exciting as elevator music and it’s equally as likely to produce a 100x return on investment.
With the ambitious plan AngelPad has laid out, and the very nature of startups, this batting average likely means that its companies are not taking enough risks. Maybe it should shoot for a few more mistakes along the way.
One week removed from its latest class of 10 companies presenting at Demo Day, Korte and his team of ex-Googler partners have shared some more insights into the incubator’s path to this point and are introducing their recent graduating class.
Korte has the right talking points. “We only want to admit companies that are tackling big problems,” he says. “We look for companies that build things beyond just what you and I want. We want to see a market that allows for a possible billion dollar company and one that solves a real problem and impacts a lot of people.”
Angelpad’s list of alumni companies is now 49 strong. Prior to this latest class, 31 of 37 graduates had secured follow-on funding and only three had failed to achieve traction according to Korte. The fact that so few have failed may explain another opposite truth: The group is still lacking a runaway success to be held up as proof of the model.
Looking at the most recent class indicates that Korte and crew may be genuinely thinking big. They’ve put their money where their mouths are, and assembled a class that includes a social learning platform, a solution to embed ecommerce into every online image, and a cross-platform social search engine, among others.
These are some BEHAGs (big hairy audacious goals), no doubt. If the companies continue trying to tackle these enormous problems, a few may succeed, but more than a few will likely fall short. And that’s okay. The incubator model is based around testing, iterating, and even failing faster and smarter.
AngelPad’s founders attribute its ratio of success thus far to a highly selective application process. They only have two relatively small classes per year and spend approximately three months between each class recruiting the next batch. This latest class saw more than 2,000 applications (about equal to the previous class), approximately 10 percent of which were from international applicants. This same ratio was reflected in the admitted class, with two of the 12 companies coming from the UK.
As an aside, Korte echoed a popular concern around the issue of founder visas. He said that his legal advisers have done a great job thus far and most applicants receive the requested H1B Visa. In rare cases, would-be founders have been able to receive something called an O-1 Visa for “Aliens with Exceptional Abilities.” (That’s either a sequel to “Men in Black” or an amazing tattoo, but either way I’m extremely intrigued and impressed.)
In contrast to the oft-popularized image of the dropout-phenom-founder, the current AngelPad class had three second-time founders and several alumni of Google, Microsoft, Intuit, and other talent factories. Korte says that most of its resident-entrepreneurs have three to eight years of professional experience prior to being accepted.
The most recent two classes have had access to $120,000 in financing through the program; $20,000 from AngelPad directly and an optional additional $100,000 from two unnamed VC partners. While companies entering the incubator program typically have, at minimum, a working prototype of their idea, one in this latest class which had spent 18 months building the foundation of its complex cloud application. As a result it was able to launch prior to the completion of the program with several $100,000 of revenue.
Korte called his latest Demo Day an enormous success, saying, “Pretty much all the companies have gotten investment offers at this point. They’re now just spending a bit more time with each of their potential investors to decide who would be the best long term partner.”
No one can say that the next Dropbox or Google is not among the 49 AngelPad graduate companies. But as the saying goes, no one ever stole second with their foot on first. Big thinking, paired with (strategic) big risk taking, is the formula for big success. This is true for entrepreneurs and for investors.
Below is a brief overview the graduating companies:
Academize – a social learning platform that enables educators to create and share interactive video lessons.
Academize has been worked closely with professors at Stanford, Berkeley, and Harvard to develop and test the product in private beta. The goal is that any teacher can create and deliver their own videos online, in many cases on a personalized per-student basis. The videos will be created through a tablet app. This is an extremely hot area of innovation with many investors and educators pointing out that higher-education is both over-priced and in many cases ineffective. In the past few weeks, they have signed up seven universities for alpha trials in the Fall 2012 semester.
Codenow – a code writing sandbox for developers to quickly test, run and share code snippets.
Since launching last week, they have signed-up over 15,000 developers. The founder is a second-time entrepreneur and former Amazon engineer.
[Codenow is one of the two companies which elected not to present at the recent Demo Day. Korte hinted that there was news to come from both shortly.]
Dro.pt - a platform & technology that makes images shopable and trackable.
Dro.pt is looking to make images across the Web “shoppable and shareable,” regardless of how far they travel across the Web. In the age of endless “pinning” and sharing, the original context of an image is rarely maintained. For brands and content creators this results in missed sales opportunities.
The company’s technology embeds ecommerce data in the image that persists as it is distributed across the Web. Dro.pt is reporting click-through rates on their “ecommerce enabled images” of 10 times higher than banners. Without any marketing, over 180 fashion brands have apparently asked to be in their beta rollout.
ElasticBox – an enterprise solution that simplifies complex application deployments and optimizes resource usage across multiple cloud providers.
ElasticBox enables automated deployments, distribution, and auto-scaling of applications, disaster recovery, cost control, and governance, all across public and private clouds. (Public clouds being EC2, Azure, Rackspace, and HP, etc. and private clouds being OpenStack, Eucalyptus). They launched after 18 months of development at the Open Stack Conference and have since been flooded with inbound leads. They already closed two paid enterprise customers with revenue over $100,000.
Embark Anywhere - an Intelligent Mobile Assistant to help users process complex transactions.
Embark Anywhere is focusing on travel initially and has dramatically simplified the flight and hotel booking experience. Using Embark, Korte claims to have booked a flight from SFO to NYC in less than 60 seconds. A nifty features which the company highlighted is the ability to receive a QR-code boarding pass from the app. They are also looking to simplify the booking process in some ways which they have not fully disclosed. With just a few alpha testers, they already have $26,000 in revenue and thousands of people on their beta-invite list.
Hall.com – a virtual war room for teams to communicate and work in real-time.
Hall.com is pitched as an antedote to “switching context between email, IM, and skype,” so that employees across a company can work together in one place in real-time. The product actually launched three months ago and have several hundreds teams using it currently, including Amazon, Autodesk, Intuit, Nike, SAP, and more. They are reporting traffic doubling monthly over the past several months.
Mobile Captain – building mobile marketing products for local businesses.
Mobile Captain is looking to integrate and automate small business local marketing across multiple platforms including Foursquare, Yelp, Google Places, and Facebook Places. An example use case is a business owner setting up a single promotion and simultaneously launching it across each of the above platforms. Mobile Captain also makes intelligent suggestions, such as when and where to advertise and how much to spend to reach a specific goal. They already have over a hundred alpha customers and are reportedly in talks with a major yellow page company to sell through their sales force.
Piggybackr – a fundraising platform for young people that connects fundraising groups with individuals, local businesses, and corporations.
Piggybackr is looking to disrupt traditional fundraising among school-aged children by connecting them with online tools to reach local influencers. Since soft-launching two weeks ago, they have received applications for teams needing to raise $160,000. This is a big market, with crowdfunding growing exponentially and six out of ten Americans giving to schools and youth. Furthermore, 75 percent of local businesses support local causes, but there is no efficient way to give today.
Rolepoint - an innovative approach by finding the best candidates through a company’s employees.
Companies need great people but finding them is difficult and expensive. Rollpoint thinks companies should be self-sufficient in their recruiting. The technology matches relevant roles with potential candidates in the social networks of current employees. Companies like Google and Facebook are already very successful at finding candidates through their existing employees. RolePoint is bringing this to a wider group of hiring companies.
During one month of alpha-testing, Rolepoint claims to have tripled the employee referrals for open positions and filled 78 percent of the positions posted. This was accomplished while saving the companies an estimated $250,000 in recruiters fees.
Spotsetter – a social search engine tackling a big data problem in the online to offline space.
Spottsetter aims to answer the question “Where do I go?” based on previously shared social information. Their system focuses on ranking results based on relevancy according to factors such as friendship, topic, location, and expertise. With just a few hundred alpha users they already have indexed and analyzed over 200 million status updates and classified 10 million physical locations.
(Robert Scoble called this out as his favorite startup within the class.)
Spotivate - a mobile app for discovering your city, building a layer of context awareness on top of location and event information to provide a truly personalized list of activities.
The Spotivate founders set out to duplicate the experience of visiting the hotel concierge desk in search of the single best activity to meet your personal goals. The team behind this are engineers from TeleNav, Playdom, and Google.