As you read this, we at Grand Central Tech are in the midst of reviewing (more like re-reviewing) applications and conducting interviews for next year’s class of companies. It’s a thrilling process, but it’s also painful in a way. So many of the companies we’re reviewing are truly remarkable. The “who are we to judge” notion occurs to us routinely. But we do have to make our calls.
In making those decisions we rely broadly on five key criteria: (This language is cribbed from an Interview we did with BreakOut Labs. For even further background on our thinking at GCT, I’d encourage you to read the full interview here.)
1. The team. How long they’ve known each other, whether they’ve worked together before, whether any of the founders has done anything notable in the space before etc.
2. The quality of the engineering talent on the team. We want to make sure the team can independently build their vision and has the skills to pivot if necessary.
3. The importance and the scope of the idea. Does the idea matter? Are they attacking a big market with a novel “way in”?
4. The traction. Is the idea/business in the market? If so, is it generating users and/or revenue? If not, what’s the path to market? How likely is it?
5. The community fit. Does the business buy into the broader GCT mission to address issues of diversity and inclusivity in the tech ecosystem?
This evaluation criteria is reflective of where we like to position ourselves on the “startup maturation curve”. While we believe in not taking equity from our companies as a matter of philosophy (and explained in detail here), we also want to capitalize on that decision strategically. Our criteria, and the manner in which we deploy it, helps us find companies in the “GCT sweetspot.”
We are looking for points of proof that, by their virtue, diminish the risk inherent not just in their business, but in ours as well, namely the year-long nature of our program. No accelerator program wants their bets to not pan out, but we really don’t. Were we just trying to build promising companies for their investment potential, a slightly higher level of risk would be attractive insofar as it might warrant the equity fee baked into the standard accelerator positioning. We’re trying to build something a bit different though, a bit bigger. This is not to say we don’t have every interest in our companies gaining notable investment and becoming tremendous, lucrative businesses; because we do. But we’re also trying to build a long-lasting, vibrant community around, and via, our companies. This is how we build a “single-point of density of New York’s premiere startups” as we often put it.
Companies that fall in the “GCT Sweetspot” have demonstrated to themselves and others the initial indications of product market/fit, or a well-honed aptitude for finding it. They’ve often raised a bit of funding, too. You might then be asking yourself, “Why are they participating in an accelerator?” I think the simple answer is that, even with this much worked out, it still ain’t easy. Having the opportunity to leverage the collective know-how of a best-of-breed community, as well as top-flight corporate partnerships, can provide the final solutions that truly transform promising businesses into proven ones.
What proof do we have that this works? 100% of GCT’s inaugural class of companies is graduating into our coworking space elsewhere in our building. It is the case that we ask our companies to commit to doing so as a condition of their entry into GCT, but we give them every opportunity to avoid this commitment if they view it as an encumbrance. None has. Furthermore, our companies have requested to be seated alongside each other in our coworking space. You can’t force community like that.
One last thought, in case it’s occurring to you, “accelerator” might be the wrong term for us. Maybe we’re a “finishing school for proven concepts.” We happen to not be the biggest fans of startup jargon ourselves. “Accelerator” is close enough for us, so we’ll stick with it. But we are different. And we like being different. We think our positioning in the “GCT sweetspot” lends us the highest likelihood of checking the last boxes for startups poised to become job-creating, economy-improving businesses and imbuing in them a sense of community and corporate citizenship that will have lasting, ripple-effect benefits throughout the tech sector.