Episode 4: Does the Y Combinator Model Travel? A Look at International Accelerator Programs

 

Chris: Welcome to the tech lowdown show, where each episode will be discussing opportunities in the tech space with entrepreneurs from the U.S. and around the world. I’m your host Chris Jones. Today we will take our focus back down under and speak with an entrepreneur who recently completed one of the accelerator programs in Sydney, we’ve seen the success. Some just started heard at some of the big name accelerators like Y Combinator, but are other accelerators particularly overseas able to recreate that success for startups that can’t make it to the valley. Today we’ll find out!

Our entrepreneur today is one of the very first people I met when I moved to Sydney back in 2008, an expert as well. At the time she was running a mobile agency and it was immediately clear she was super bright & extremely driven. Fast forward to today her social commerce start up, ShopofU, recently completed the investable accelerator program in Sydney and raised a seed round of capital. Kelly Slessor co-founder of ShopofU what’s the lowdown?

Kelly: Hi Chris. How are you?

Chris: I’m good thank you. How are you?

Kelly: Yeah not bad, not bad. Thank you so much for having me.

Chris: Pleasure is all mine. So we’re going to dive right in, kind of can you give less than sixty seconds on your professional background leading up to how you ended up founding ShopofU?

OK sixty seconds wow. So I started my career in British Telecom [not clear]. I moved to Australia to run a mobile agency for a number of years. And I guess I needed more [not clear]. I start my own mobile company. [not clear] specially in Australia and that [not clear] now coming through mobile. And actually make it only point then that you know it was in like investments like in US and UK, and you know the Asian market probably the highest conversion market, and when I talked about it that’s how many people actually go to a mobile site and how many people end u buying something. So working with those clients and seeing as massive [not clear] that no one was really addressing them or fixing them made me think kind of, I need to do something about this.

So that’s why “Shop of U” was born. So “Shop of U” is a kind of social ecommerce platform that serves you fashion based on your style and brands.

Chris: Very, very cool, I love it! Can you walk us through the process of getting accepted into the Investible program and what exactly that period of time entails for you?

Kelly: What I saw was a bit of a crazy whirlwind, and it felt like it happened in about, you know, two minutes, but in reality it was probably the two years leading up to that, that kind of got us through that process right. So I was actually I did a lot of research last year into mobile applications. I read forty thousand mobile reviews across the U.S., U.K., Australia and looked at what was the best mobile performance. I mean why? You know what were people, what were the actual people saying they loved about or hated about them. And so I started to put this kind of act together and then I would say kind of middle of last year someone introduced me to someone in the investable team Trevor in Korea and they were about to run one of these programs and she said that  I should go along and do the angel pitching session which Involved 2 days doing kind of pitch workshop. Just pitched for two days. She just. And You know they chose, they chose people to pitch to different groups and then at the end of it they picked a pitch winner and I won that.

And then. I didn’t know we’d won. Me and my co-founder were sitting right there drinking a glass of champagne saying yeah what if we won and they said we were to be in a bootcamp campaign in the middle of nowhere with no internet connection and. I think we’re both absolutely mortified and flabbergasted that we were like, Bring it on let’s go for that. Go for the challenge! So we went off and we did this week’s boot camp and again it was all about you know working out, pitch working out. You know our value system, we were looking for transmission, we climbed Mountains. You know we waded through water in the middle of the night and I crank it up and then we came back from that and got accepted into, the winner of that week then got accepted into what they called lab, which was an eight week program and every week you had to fill on. It was like being it being in The Apprentice on steroids I compare it to lots [not clear] of a [not clear]. One week work on financials, next week it was on. Your video pitch, and then at the end you pitch to the people at [not clear] or you know well some investors and then we went through that process, in the end we won that, they picked  a winner after that and that’s when we got the investment. so it was pretty intense and it felt like we won it really quickly but I think it’s a lot Well when I went into it leading up to that.

Chris: Great, great! It’s interesting so you’re fortunate after raise capital after completing the program. How did you come to an agreement about what the company’s valuation was?

Kelly: Well they actually set the valuation so everyone that goes through the lab sets valuation. They think about the reaction a million dollars. So we did negotiate on the second tranche. But yet it’s a standard.

Chris: Got it, got it! So can you tell us what if anything the program taught you that others don’t have the benefit of this experience might be apply their own businesses?

Kelly: I got so much from it critically it was unbelievable. I mean you know one thing one of the gold pieces I got out of it. Me being a perfectionist eighty percent growth was one of the biggest things I could out of it. Because when it took lock in the morning and you have to present a video pitch, a financial spreadsheet and a pitch document at 10 A.M. the next morning, and your computer fails and you lose everything. You learned very quickly that eighty percent of got it and have no other choice. So, I learned that eighty percent is actually good enough and the extra time you spend on the twenty percent, bringing it to one hundred percent doesn’t actually, you know that the reward doesn’t actually stack up. I’m learning that which is really good for me, because I spend a lot of time on the last twenty percent of things. And also you know just getting things out the door quickly so that was probably one of the mag things like that also a lot around negotiation, and a lot of around, share agreement, You know not making quick decisions on each thing you know you can conversations I have with you along the way with you know just making sure that I’m clear about where I want to get to. Making sure the decisions I make now are based on that. And then you know just making sure that I ask people to help I think that’s another thing, is the amount of people that reached out or just really given that time and being kind of humble enough to get each people. I think were super busy and don’t have time to help, and just asking the question and the amount of time and they have to help, and help that we got back has been amazing so I think that one of three key learning for me.

Chris: That’s interesting I want to dive into one of the things you said around particular around negotiation. A lot of folks don’t get the opportunity to train in the negotiation or be trained in. What did you learn specifically around negotiation, that might be useful to others? I think it’s such an important area because often times you might be having your first negotiation that might be the one that you need to get your company across the line and so having a bit of understanding your insights to how others have handled that would be really helpful.

I think now there is tendency when you start something like this you have nothing, right. I mean I’m working on a concept yes. There’s IP there’s research behind it, it’s a lot of you know a lot of hard job that going into it’s, but in reality what I have right. There is a tendency because you have nothing to give away a lot nothing. So you know if someone [not clear] you know. That and I think there is that sense and there is a tendency to do that at the initial stages. Something right i Pod and just take your time with things you know don’t rush decisions and then if someone does right I’ll take ten percent of this [not clear]. [not clear] while negotiating it not just for the sake of negotiation. You know one of the one of my vices was telling me that he had been through this process before and he got to the point where a company that had what diluted so much, by the time he got to the point of selling it, he showed the shares of the people that were involved were worth so little, that you know that time and effort they put into it wasn’t what it said. So one of the piece of advice he gave me is just think down the track of how you’re going to dig it up so that you don’t get down the track end up with a single digit number of shares, and then you look back and got to spent five years of my life working on these business and by the time I’ve given some investments, what member friends and family they can share and you know I’m that person that gave me advice in a meeting, and now I’ve been left with a single digit number of shares. Yeah I thought I was just given some really great advice around that which has been I think really valuable.

Chris: Interesting, interesting! So now that you’ve completed the accelerator portion, how do you expect to support an interaction to change?

Kelly: Well so we’ve now got a structure where we, we meet with investable. I mean we’re in their offices everyday which is great and so we have access to them. I’m making connections left right and center and you know we constantly asking do you know anyone in this industry, do you know anyone can help us with this? The introduced us to Bitsmart, Microsoft’s developer partnership last week, and so we’ve had a meeting them and they’ve now accepted us on board and then making lots of connections, but we also have access to the likes of Trevor in Korea, which is great. Trevor’s got one of the highest [not clear] in terms of investments in Australia and Creo. Both Trevor & Creo are amazing enterpreneurs. Yet having access to them to kind of challenge us but also give us insight on how we can make sure we’re heading in the right direction and it’s really great.

Chris: It’s really interesting. So tell me what looking back did you wish you knew before getting into the program either about your business or personally?

You know I don’t I’m not great at hindsight because I think it’s kind of useless, because that you know in that everything I’ve learned and everything that happened, kind of happened for a reason and that’s why I feel like I’m here doing this now. So in terms of doing stuff differently, the only thing [not clear] myself earlier. It took a while to get to this, but also what I’m not sure, when I look back I’m not sure if the market was totally the ready for it I’m not sure it’s totally ready for it now to be honest right, but it is but the consumers are ready for it and if the consumers were ready for it then and I think it’s time to do it.

Chris: That makes a lot of sense. So I know you’re in the midst of a of a ninety day sprint. Now what exactly are you looking to accomplish during this time and how do you go about prioritizing what needs to get done?

Kelly: Well that I mean this this three things that we kind of par tied in terms of the next ninety days. The first one is to get some tech developed. But great advisers like [not clear] have told us you know it kind of helped set realistic expectations around that so we’re trying to be really realistic about a timeframes on that. The second, second one is to get some brands on board so we’re running an event for brands at the end of next month.

And trying get some brands engaged, and the third one is to get the customers. And so we’re doing a lot of social activities a building a database with the customers in the background. I suppose you know how we set a lot of priorities. Really just getting a lot of really smart people in the room and I mean like these are all the things we’ve got to think about the next ninety days. how do we distill which ones are the most important, and  then it’s not really rocket science. Now I mean there were things on there like bullets and governance and compliance and you know in and we had a right meaning the guy who got picked and he’s an amazing CEO, and it solved multi-million dollar company last week, and he basically said you know you’ve got to be spending eighty percent of your time on the top three objectives and if you’re not then you’ve really got a question what you were giving thought he was quite tough with us which is right. But setting priorities about you know asking small people to just help us still those down because it can be overwhelming.

Chris: Right right. And so those are kind of I would say three things that you kind of need to do well in order to make this thing success and that way which what you feel? Yeah, absolutely. Got it got it! Cool so now we’re going to move into I like to call the real low down segment a show here has some hard hitting questions but love if you can just dig in because honest as you can obviously not to have missed Don’t Don’t, Don’t, Don’t, Don’t back out on your investors or anything but out really just want to get stuff that really people can grab hold of and try to understand what’s happening here in the larger picture or specifically down with what you’re doing. First question what is holding Australia back from producing more global tech entrepreneurs and global tech businesses.

Kelly: Complacency. That’s a hell. Yet top one so we had a I went to a retail how for a minute a while ago. And someone say you know Amazon is going to come in and you know destruct Australia really needs help. What will ruin it is the absence is our inability here in Australia to actually, to be really innovative and to change the system. You know we are on an Island here and I think some time it’s you know if no one’s doing it there is a tendency if that should in the retail space that doesn’t need to be done. I had a conversation a couple of months ago with a big brand [not clear] their statement was we need to focus on mobile. They’re getting hundreds of thousands of hit sixty percent of that it’s coming from mobile and far less than a point six percent conversion rate and they said we need to focus on mobile. If I’m to see how many would it be if we need to focus it would be mobile as their number one priority and I think that kind of show the level of complacency that they rate at the moment because a lot of the point I think at the top that’s a great point.

Chris:  What if any challenges have you come across as a female entrepreneur and a person of color in tech.

Kelly: Now. I did talk actually on the cloth evening and I actually don’t believe in it. I think I talk. I have come across challenges. Because of those two reasons. I believe that you know for me just as much as anyone else there is opportunities. Yet you not I don’t I don’t think any challenge it’s very correct what.

Chris: What Personal sacrifices have you had to make in order to chase this dream is there any advice you would give to others that are looking to go down this similar path?

Kelly: Not sleep is the master one. All the time. You know I’ve got two young kids about six year old interior out and you know sometimes. Where I balance and. You know try not to be on my phone texting developers or talking to people while spending time with the kids is a constant challenge and you know massive, massive area of improvement came when I’m constantly challenging myself to improve on. You know if you weigh the time but then I try and I’ve really tried just been camping out. Really trying  to get those three or four days quality time away where the phone gets switched off when we’re in the bush doing nothing we have down time with it. Not always successful. But, we just had a great weekend camping away. I just I try and do that scene on a personal and also you know I probably worked for four years without really earning a lot. I’ve been working towards it, and a lot of my mind I thought towards my consultancy work, has gone into this, and I take on jobs. That I’ve cut some because or I’ve not charged what I should have done because I know I’m learning on that you know it’s teaching me something. I think my few sacrifices were all worth it.

Chris: Nice, nice. What other than your kids, what keeps you up at night right now?

Kelly: I suppose the development pace. I then actually it’s user experience pace. That’s the bit where I kind of quite wake up and I go, you know we just need to get that act. This is got to be something that consumers want to use, but want to use on a regular basis, and because it saves them time. If I can save people time I know people will keep coming back for more, and now that’s my ultimate goal, that’s probably the main thing that keeps me awake at night. It’s just that constant feeling of it it’s got to be it it’s got to actually save people time. It can’t be a clunky user experience, and the way the systems integrate at the moment in integrating with brand if I do it in the traditional easy way, it’s going to be hunky so I need to I have a smart way to do it that’s not hunky.

Chris: Nice, nice! So we’re close on this. What’s the best part about being an entrepreneur in Sydney, and what’s the worst part?

Kelly: The best part about being an entrepreneur in Sydney it’s just that access to smart people the access to a really really savvy audience that want the technology. The ability to test things on a small scale before going global, Yeah they would be the top the top three things. The worst part I think being in a small market. So you can’t get that growth, you can’t get that, you can’t get that backing of funding easily you know, it’s difficult it’s quite a small market, so you know you don’t have the opportunities you have in the US in the U.K. for instance.

Chris: Wonderful! Well thank you so much Kelly. I really appreciate your time. If you can please tell our listeners how they can either find out more about you or more about “Shop of U”.

Kelly: So you can either go to my Linkedln page and look for Kelly Slessor, that will get linked to everything or you can go to shopofu.com and have a look on there. Then you’ll see the videos which we’ll launch later on this year and just look out for that as well.

Chris: That’s wonderful! It’s awesome folks. If you like the show, please download all the episodes and leave us a five star rating on ITunes. You can find all the show notes at techlowdownshow.com and follow me on Twitter @CJones2002

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