[Guest post by Don Ritzen, co-founder and former chief commercial officer at Rockstart]
After 2751 days (7,5 years) I’ve left Rockstart in an operational capacity to start a new company in 2019.
Building Rockstart has been one of the most gratifying things I’ve done in my life, seeing people coming together, helping each other, being able to build something much greater than yourself: a community that has helped over 150 startups is something that I’m very proud of.
However, less than a year ago I realised that I was slowly getting restless due to being caught up in the day to day operations at Rockstart. I felt the pull to start something from scratch again, to engage in the challenge of building something when all odds are against you.
The nervous feeling you have when you sense that you are on the edge of creating something new that people will get excited about and want to be a part of, but at the same time you are confronted with the fear that nobody will care and that you’ll miserably fail…
Ever since I was 9 years old and saw the 24/7 news coverage on television about the danger of the growing hole in the ozone layer, I have been interested in the area of sustainability. While I was travelling back from France last year, a moonshot idea that had been building in the back of my mind took shape. I’ll announce more about this new company later this year (It’s still in stealth mode), for now, I want to focus this blog post on the journey I’ve had with Rockstart and tell you about my highlights and learnings.
Startups=People=plural, not a one man-show
One of the most important things I’ve learned in the past years is that startups are not about the hero stories you read in the newspaper of the one entrepreneur/CEO, who succeeded against all odds. It’s the story of many people. It’s the story of a strong and diverse founding team; the first employees who left well-paying jobs for reduced salaries, because they believe in the founders’ vision.
It’s the story of experienced mentors who generously shared strategic advice at important crossroads; of angel investors who invested when there were still 1001 risks and hurdles to overcome. Surrounding yourself with the right people is in my experience 95% of what makes startups succeed (combined with luck&timing).
In the past years, I’ve talked to more than 100 successful entrepreneurs who have sold their company for millions and turned into angel investors. Many of them told me that one of the key ingredients in their success was the help and advice they received along the way; from mentors, investors and of course: their team. Startups are too hard to do just by yourself.
Going from 0 investors to having 43 reject your business plan
I can still remember the first year when Rune Theill, Oscar Kneppers and I started Rockstart, it was 2011 and we were in the middle of the global economic crisis. In order to launch the first accelerator we needed funding and I was tasked with finding investors. I quickly became desperate, since I only graduated from University the year before, I didn’t have a network and literally knew zero investors.
Contrary to today, in 2011 angel investors were scarce and difficult to find. I remember literally asking any friend, business contact, relative or random person I met at a conference if they knew anyone who would be interested to invest in startups or in an accelerator and if they could introduce me.
Luckily, after 6 months of hard work, my strategy of getting referrals worked: I managed to get one-on-one conversations with 47 investors. However, 43 investors rejected our plans and said that they didn’t believe there were enough high-quality Dutch startups to invest in and that we wouldn’t be able to convince foreign startups to move to the Netherlands. Investors told me the accelerator concept was very “nice”, but would never work commercially.
We hoped that launching our official call to applications would help further build our reputation and get more investors excited. So with only 4 investors confirmed (20% of the needed funding), we launched a PR campaign.
Sometimes you need to bluff to make things happen. To our surprise the campaign got picked up in a big way: since we were the first accelerator in the Netherlands and one of the first in Europe, we were featured on TechCrunch, The Next Web and Financieel Dagblad and other major blogs and newspapers. We ended up receiving over 300 applications from over 30+ countries. We were ecstatic.
Quitting or taking a huge risk?
Three months later it was February 2012 and we had successfully finalised our selection process and chose 10 startups to invest in. However, we still only had 65% of the funding committed by investors. We knew that after we selected the entrepreneurs, some of them would sell their house, leave their wife and move their life from countries like Argentina, Romania and Italy to Amsterdam.
We were thinking: Are we willing to take on this responsibility while we are still not sure whether we are going to raise the required funding or go bankrupt? We decided to risk it, and what followed was one of the most stressful moments in our lives, Rune and I working 100+ hours a week trying to run the program, find alternative sources of funding and build our mentor community.
Fortunately, we received valuable help from our advisory board, our co-founder Oscar and several mentors. In the end, our combined hard work paid off: we finalised the funding 1 month after the start, and we ran the first programme successfully.
The big Aha-moment: the Rockstart model works
The moment it really dawned on us, that the accelerator was having a big impact, was after working with Bas van Ooyen and Richard Kraaijenhagen, the co-founders from Owlin. When we met Bas and Richard they were just 20 years old and had built an algorithm to find the news for media companies such as Telegraaf, lightning fast.
They were excellent hackers, but when it came to the commercial aspects of the business they were very shy and not the most socially savvy. Up until today, they have proven to be the most technical team we’ve ever interviewed at Rockstart. During the selection period, we were seriously doubting about whether to accept Owlin into the programme. In the end, we selected them as our 10th team, the last to be accepted.
During the programme Bas and Richard did quite well: they made a smart pivot to apply their technology to the FinTech sector and they were close to signing a pilot with ING before the program ended. However, a few days before Demo Day their lack of commercial experience showed: their Demo Day pitch turned out to be a complete mess.
It was the only presentation of the startups that was far from ready, and Rune and I had to sit with Bas and Richard for several evenings until midnight to improve the story. Bas and Richard would write down our feedback, but the next day the pitch would be something completely different.
The night before Demo Day, we were becoming desperate, so we decided to write the pitch together on paper, word for word. And then we said: well, that’s all we could do, let’s see what happens tomorrow, fingers crossed.
Inaugural Demo Day surprise: the Owlin pitch “look at the fat guy”
The next day was show time, and Bas seemed nervous, but confident to go on stage. To our surprise he blew everyone away: he had memorized the entire presentation we had written together, word for word and gave a very convincing and even humorous pitch. After his speech, Bas and Richard had 15 investors lined up at their booth to talk to them.
The way I heard them talk to the investors, answer critical questions, the way they carried themselves, it was like a personal transformation. That’s when I felt the proudest, that’s when I knew that the accelerator programme we had created really worked, and had an impact on (young) entrepreneurs.
Owlin: from two technical wizards to a business with 30 FTE
During the program Bas and Richard also met Sjoerd Leemhuis, who was volunteering at Rockstart and had a background in banking, Sjoerd joined them as a co-founder and is currently leading a team of over 30+ talented people, with big clients such as Fitch Ratings, Adyen and ABN Amro. Bas and Richard left Owlin a while back to work on new projects and companies, but are still shareholders.
After the first Rockstart programme in 2012, we started fundraising for a second programme, which went a little bit easier and fortunately we never had to take as much risk as during the first programme ever again. After the Web&Mobile Accelerator, we went on to launch a Smart Energy Accelerator in 2014.
Crazy Smart Energy idea: Balancing the grid by switching off our appliances
The moment when I thought, our accelerator concept is really working and is becoming bigger than ourselves, was a few years later when I saw Simon Bushell from Sympower present at the Smart Energy Demo Day in 2016.
Simon and his co-founder had this crazy idea to balance the electrical grid by turning thousands of devices off, rather than turning one coal plant on. Some people in the selection committee: experienced investors, thought it was a too complex concept and that it would never work. But our program director Freerk Bisschop really believed in the vision and the team so we ended up investing in them.
The progress that Sympower made during the programme and foremost, the vision that Simon presented on stage really gave me goosebumps. Right now they’re one of the fastest growing startups in the SE programme, and it all started with an MVP and a big vision.
That’s the moment I realised our accelerator concept had outgrown us as founders, we had found someone who was much better than us in making investment decisions in the energy sector. After that year, Rune and I took a back seat in the selection committee and fully trusted Freerk and the other members to choose the top 10 Smart Energy startups and accelerate them.
Internationalizing Rockstart: a risky adventure
In 2014 we had run 3 different programmes and felt that we had proven that our accelerator format worked and we could grow internationally. So we created a plan to expand Rockstart to LATAM and Asia. After extensive market research, we decided on Singapore and Colombia as launching hubs for their respective regions.
Unfortunately, after about 1,5 years we didn’t manage to get Singapore off the ground, and many people we spoke to also had doubts about our decision to expand to Colombia. They raised questions on Colombia’s drug and war-ridden history.
To top that, due to the popular Netflix series Narcos, many people in our network had the perception that Colombia was still very dangerous and asked why we didn’t choose for more developed and safer economies such as Argentina and Mexico.
I won’t go into detail about the strategic aspects of our decision (IT/Mobile infrastructure, Technical universities, entrepreneurial culture, etc), but expanding to Colombia indeed proved to be much harder than we thought. After going there for the first exploratory trip in 2014, there were many moments that we thought we are not going to make it and we should cut our losses, hundreds of thousands of euro’s by then, and give up.
Finding the right international partner & the importance of persistence
For starters, it took us 2 years and 8 candidates to find the right partner/entrepreneur to run Rockstart in Colombia: Felipe Santamaria. After we found him, Felipe spent most of 2016 and 2017 to:
1) educate local investors about startups and how an accelerator works and;
2) try and convince them that Rockstart would also work in LATAM.
I supported Felipe in that period and went to Colombia 4 times to talk to investors and explain to them about our accelerator model. After (mostly) Felipe endured about 100+ rejections, we managed to convince 6 Dutch investors and 10 Colombian investors and the program kicked off in October 2017.
After visiting the first Colombian Demo Day in February 2018, I was blown away by the fact that most startups grew around 300% and were much more mature than the ones who graduated in the Netherlands.
Several startups grew to EUR 15k/25k monthly revenue and many Colombian mentors came up to me to express how impressed they were with the quality of the programme and how happy they were that we chose Colombia, instead of countries like Brasil, Mexico or Argentina.
The next morning I woke up happy that we decided to ignore Colombia’s reputation and its past, and instead focused on its potential and its people. To me, that’s what entrepreneurship is about.
After that first programme in Bogota, I concluded that our philosophy of entrepreneurs helping and mentoring each other, of “paying it forward” is universal: it did not only work beautifully in Europe but also all the way in Colombia.
When looking back on the past 7,5 years, that’s the thing I’m the proudest of: that our core vision has always remained the same from what it was in our first business plan: to help (first time) founders by surrounding them with the best mentors, experts and investors; the best people.
Concrete Results of investing in 152 companies
When starting in 2011, we couldn’t imagine that the number of people who would become part of our Rockstart community would end up being so enormous and would span different continents.
Some of you will be wondering, what were the results of all of these Accelerator Programmes? I’m happy to say that together with our 500+ mentors, 140+ investors and our dedicated and passionate team of over 30+ talented people we’ve accelerated over 152 companies, who are now worth more than EUR 350 million combined and employ over 700 people.
There are too many people to name individually, so I want to thank everyone for believing in Rockstart and taking a chance on me back in 2011: a recent graduate with 1 year of startup experience, a fancy business plan and a PowerPoint presentation.
We couldn’t have built Rockstart to what it is today without hundreds of people coming together and joining us on our mission to help passionate and talented entrepreneurs Rockstart their companies. So thanks again.
Rockstart has several exciting new developments to announce in the coming months so be sure to keep an eye on updates by my co-founder & CEO Rune Theill.
I’m happy to continue to be part of Rockstart, as an advisor and shareholder.
[This story was originally published on Medium by Don Ritzen, co-founder and former chief commercial officer at startup accelerator Rockstart]