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Emma Thorn, Centre Director of SETsquared Bristol, reflects on what the tech business incubator looks for when selecting new members and the questions to ask yourself before you apply.
We’re experiencing exciting times at SETsquared Bristol. We currently have 85 high tech, high growth members that we are working with and membership applications are growing.
The special thing about SETsquared is that we incubate companies rather than accelerate. This means we do the slow parts of the journey as well as the fast moving elements. We take a holistic approach, and that means more commitment on both sides. It’s about companies making a real step change in their ability to scale.
Photo credit: Candour Creative Photography
SETsquared services are bespoke to each venture. The journey of a venture through the incubator experience will depend on several factors including what stage they are at when they join us, the speed they are growing and if they require funding.
Our assessment criteria is suitably tough and robust, and any potential ventures needs to meet these before membership is offered. On average, we turn away about 75% of applicants but always with a heap of feedback, and, where possible, signposting to other support in Bristol’s fantastic start-up eco-system.
One of the questions I get asked most is ‘what do we look for in potential members?’. Well the answer is several things, and a good place to start before you apply is to ask yourself what thought you’ve given to these areas covered below.
Are you ready to apply to SETsquared Bristol?
There are typically three stages of growth: investigation, acceleration and commercialisation. Some companies are too early for an incubator, for example if you need another six months of investigation or research then you’re probably too early.
Is my idea high tech?
When we talk about high tech we want to see that tech is at the centre of your business proposition. In other words, it is the tech that will be the reason your business will scale rapidly. Ideally, we want to see a product which means we don’t give membership to pure consultancies. Crucially, we want to understand how your tech gives you competitive advantage. So, have you thought about how your tech is unique and if it is defensible? What is stopping your competitors copying you? What is the business opportunity and market?
To have a viable business opportunity, you need to know what the problem is, and who has it. Then you need to know how your solutions solve that problem! When we talk to new ventures, we are interested in how big their opportunity really is. Have you worked out how you might get your product to buyers? We call this ‘channel to market’.
Do you have a business model?
This is all about knowing how you might make money from your business idea. We look for business owners who have thought through how they will generate revenues into their business, and crucially how much profit they might walk away with from sales. Have you considered what it would take to scale your revenue sales?
Have you got your financials covered?
At an early stage with your business idea, you should have made some cash projections and assumptions on P&L. However, have you thought about what funding you might require to get off the ground, and to scale in the future?
What’s the make up of your strategy and team?
It’s never too early to think about your plans for developing product, sales and marketing and how your operations will work. We will ask about the founder team and how they add values, as well as your plans to grow your team. Who are the key hires you will need to get you to the next stage? What type of roles do you need? How will you pay for them?
Have you thought about your exit and personal aspirations?
It might seem strange to think about the end just as you are starting-up but having a view of the different exit routes will influence many aspects of your decision making at earlier stages. Also, you are about to embark on the rollercoaster ride of your life so it’s worth stopping to check what you want from the experience. It can be helpful to ask yourself: where will I be in five year’s time in relation to my business?
Above all, can SETsquared add value?
We don’t expect all aspects to be polished, and of a certain correct standard to apply. We DO expect you to know where the gaps are and come prepared to talk about that. At an interview that’s when we know how we can add value through an incubator membership.
What if I’m not ready?
We don’t turn away business ideas flat. Several of our most successful SETsquared companies didn’t make the cut the first-time round. What they did do is they went away with the benefit of the advice and feedback they received at interview and came back when they were ready.
Gareth Williams, Founder and Managing Director of YellowDog comments:
“What do they say, that if at first you don’t succeed…? The first time I was interviewed by SETsquared, I was rejected. The feedback I received was immensely helpful and valuable in sharpening our pitch and also sharpening our commercial focus. Having listened and taken the advice on board, just over six months later, I reapplied and was accepted. And here we are almost three years into our membership, with 17 people working on YellowDog and growing fast.”
Keep an eye out for the next blog in this series to help you with the application process for SETsquared. Our next blog will look more closely at some of the characteristics of a successful applicant using case in point examples.
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