Mass Challenge just completed its fourth year as one of the nation’s preeminent startup accelerator programs. While there has been an explosion of accelerators lately around the country, Mass Challenge, along with Techstars and Idea Village of New Orleans, represent the most ambitious and rigorous attempts to nurture the startup ecosystems in their communities. These guys work harder than the startups they are helping.
There were actually 15 startups this year that won a portion of the $1 million prize – with prize amounts ranging from $15,000 to $100,000. They run the gamut from medical technologies like Hemova Medical to transportation technologies like RailPod and consumer products like Cape Commons Brewing.
The startups coming out of programs like Mass Challenge give me confidence in the future of American competitiveness and in our ability to find solutions to the world’s most challenging problems. I had the privilege of mentoring some startups that came out of the first Mass Challenge class, and they continue to grow and succeed despite a challenging economy and the difficult space they are working in. These include Fenugreen, a company that is using the traditional plant fenugreek to create sustainable food packaging and Sproxil, a startup that has already prevented several million people globally from receiving counterfeit medication.
Mass Challenge has become successful because of the entrepreneurial leadership of its founders, but also because it filled a very important need in the Greater Boston area. While the region is home to the most cutting-edge research and innovation in the world, it would often see that innovation commercialized in Silicon Valley, or increasingly, New York. There is enough entrepreneurial talent, management experience and capital in Greater Boston to have an even more vibrant ecosystem than it has, and to prevent this “innovation bleed” from happening. Mass Challenge is the board on which the various pieces of the puzzle fit together.
Accelerators are providing much more than office space and the company of fellow entrepreneurs. They provide educational opportunities for entrepreneurs related to their sector. They connect them with mentors and other entrepreneurs in their space, and host an overwhelming array of events to connect participating entrepreneurs with any and all potential supporters of their work. In 2013 Mass Challenge had 526 judges and 351 mentors assist their entrepreneurs (about 3.6 mentors per startup). In addition, over 12,000 people attended their events. A dedicated entrepreneur is given all the tools in the world to find the right network for his/her venture.
Most exciting for me this year was to see the success of 99 Degrees Custom, which received $100,000. This company custom manufactures build-to-order apparel and utilizes the historic textile infrastructure of the older cities of Lowell and Lawrence, MA. We are seeing companies like 99 Degrees participate in regional accelerator programs – in this case the MVS Sandbox, and graduate to Mass Challenge. They can then move to an even more engaged and elite program like Techstars if they succeed. The development of a regional ecosystem and a “farm system” for entrepreneurs, is critical to bringing prosperity and jobs to those parts of our country that are struggling economically.
But the growth of Mass Challenge, and that of similar programs also reflects the tension among policy makers and business people about startups. On the one hand, policy makers, philanthropies, economic developers and others see an American economy more and more reliant on innovation for solutions and startup entrepreneurs for job creation. Thus there is support for programs like Mass Challenge that can enable, support and nurture innovation, entrepreneurship and future job creation. While universities have long had startup commercialization programs and incubators on campus, they have not been focused on helping companies grow and become job creators. And government efforts to “pick winners” - technologies, sectors or companies, has often ended in spectacular failure.
On the other hand, accelerators are being asked to provide the services that investors and venture capitalists often provided. It used to be that the investors had the golden Rolodex – and connected you to the right attorney’s, manufacturers, PR professionals and head hunters to help your growing company. Increasingly, those connections are being made through participation in accelerator programs like Mass Challenge. When we look at the sponsorship list of Mass Challenge, or 1776 in Washington DC or Idea Village in New Orleans, we see very few institutional investors or venture capitalists. Even though they benefit from the startups coming out of these programs, they no longer financially underwrite the ecosystem. That has been left to the universe of successful entrepreneurs, philanthropies, state agencies and professional service firms who are important, but don’t always bring a targeted focus of helping the entrepreneur grow their business. Time will certainly tell whether this model works as we watch these startups grow and succeed and give back to their entrepreneurial ecosystems.
The 2014 entrepreneurial season will soon be upon us. You too can win $1 million. Except it will be Aasif Mandvi of the Daily Show telling you, not Ed McMahon.
