500 Startups have launched their first UK programme, Distro Dojo, in order to bring their unique brand of support to innovative UK tech companies. We caught up with programme head – and WeWork neighbour – Matt Lerner, for a Q&A to find out more.
1 – Tell us about Distro Dojo.
Distro stands for “Distribution” – as in getting masses of customers to use your product. And a Dojo is a martial arts studio where people go to study in a hands-on practical way under a master (Sensei). We are setting up Distro Dojos around the world where we seek post-seed, pre-series-A companies – companies with a live product and traction that indicates product market fit. We invest in the companies, and work closely with them to help them scale their growth so they can raise a larger Series A faster. In our London Dojo we’ll be investing in batches of 5 companies, and taking them through a three-month growth program.
2 – Why have you chosen London and the UK, and why now?
The UK has the best startup ecosystem in Europe, with great early-stage programmes like Seedcamp, Techstars and Ignite. Plus great support from the government, the EIS and SEIS programs, Tech City, and the Sirius visa program – I see them all having an impact every day.
We’ve invested in about 20 UK-based companies so far. But the Dojo seemed like a perfect fit for London for two reasons: first, while there’s a lot of early stage money, there’s a bit of a drought between seed and Series A, where we see a market opportunity. Second, whenever we talk to founders, the main place they want our help is with scaling growth! They want help with all aspects of growth – from hiring good growth people, tracking the right KPIs accurately, improving search rankings, to activation, engagement and retention – the whole gamut. We think there is a big market need in London!
3 – What sort of companies should we expect – FinTech, Big Data, IoT, all of the above?
We invest in all sorts of businesses – anything we can “growth hack” – from B2B SAAS to mobile games apps to ecommerce. We prefer businesses that can scale through internet-based distribution that aren’t too capital-intensive (i.e. can be up and running for <$1M US). Like all investors we’re looking for great founders with fantastic products and happy customers. We also want founders who are really committed to growth – it’s their main focus personally and they are willing to invest in it (hire the right people, license software, buy ads). If growth isn’t a priority for at least one of the founders, then a programme like this is probably a waste of their time.
4 – What will the companies get out of the programme?
Each company will set their own goals depending on their business. We’ll start by identifying their key success metric, and some hypotheses about how they can move that needle. Then we’ll help them test the hypotheses – whether it’s content marketing, landing page A/B tests, drip email campaigns, hiring, app store SEO or new sales scripts. Our global team of 10 Distro Hackers have expertise in every growth discipline you can imagine. And we’ll make sure we match the right 500 Startups team members with each portfolio company so they get the help they need.
5 – What are the three things you would advise entrepreneurs to take into consideration before embarking on their startup journey?
If you have any other career option at all, take it! Just kidding ? Over the past few months, I’ve had the privilege of hearing very honestly and extensively from dozens of entrepreneurs in the UK – some who are struggling or have shut down, others who are amazingly successful. There are so many ways to mess up a startup, I won’t go into them all here. But there are a few ways to greatly increase your chance of success:
- Actually build and launch a product – get something out there quickly. Sounds obvious, but it’s surprisingly rare.
- Then listen to your customers – find the ones who like your product and find out who they are exactly why they love your product.
- Stay focused – you’ll have lots of advice and input – from employees, customers, investors, mentors, and bloggers. It’s a very noisy job, being a founder. You’ll get pulled in every direction. Stay focused on your product and your customers’ needs and do the things you need to do to grow before the money runs out! You’ll make mistakes. You’ll probably fail. That’s great! Because it means you’ve learned, and your chances of success the second time will be so much higher!
6 – Could this initial programme lead to a larger 500 Startups presence in the UK in future?
Certainly: if we see enough demand in the market, and a place where we can add unique value to the ecosystem, we’d be happy to expand our business here. But for the moment, I want to stay focused on finding five great companies for our first Distro Dojo, and then making sure they all scale their growth!
