There’s no shortage of incubators and accelerators sprouting up around the Seattle area, and yet the creators of 9Mile Labs feel as if there’s still plenty of room to operate.
The firm is focusing on enterprise software companies, rather than the sexier consumer mobile apps and Internet startups that emerge from other accelerators.
That may be a smart bet. After all, money continues to flow to B2B startups, currently the hot sector in venture capital circles (as we’ve seen with recent large deals for companies like Smartsheet.com and Qumulo).
9Mile is still finalizing its physical location, but the firm will officially open in April when it accepts its first cohort.
It plans to invest $20,000 in the companies which are accepted into the three-month program, taking an eight percent equity stake. That’s similar to TechStars, which also operates in Seattle, though it takes six percent equity stakes for investments of $18,000.
We chatted via email this morning with 9Mile principal Sanjay Puri — a former employee at Microsoft, Opsware, Edifecs and H-P — to find out more about the new accelerator. Here’s what he had to say:
Why does Seattle need another incubator/accelerator?
“According to the latest Startup Genome report, Seattle ranks as the No. 2 region for technology talent globally. Seattle is also the No. 4 startup ecosystem placing only behind Silicon Valley, Tel Aviv and Los Angeles. Even subjectively, if you look at the startup and tech events organized by GeekWire and others, the number of aspiring entrepreneurs and the level of energy is amazingly high and plain to see. However, we have a surprisingly deficient support ecosystem, with two premier VC firms and the rest that you can count on the fingers of one hand; and this number is only depleting with OVP, Frazier and others closing down. Techstars is doing a phenomenal job as an accelerator but their capacity is limited to 10 companies per cohort. So where are the other early stage entrepreneurs to go? We believe the timing is right for Seattle to break out and support its budding entrepreneurs. But it will take more than just 9Mile Labs. It requires VCs, government, higher ed institutions and angel investors to all come together with the entrepreneurs to help build this out. We’re trying to work with all of these critical stakeholders to energize and re-invigorate the ecosystem.”
—How many companies do you plan to invest in each year, and how much money will you invest? What percentage equity stake will you take?
“We will have two cohorts per year, one in Spring and another in Fall every year. Our first cohort begins April 8 (applications to the cohort will open on January 14, application deadline is February 15). We will invest $20,000 in every company and will take an 8 percent equity stake.”
—What makes 9Mile unique from other accelerators?
1. We are focused exclusively on B2B startups
2. We are setting aside a pool of equity for our mentors as part of our program. This enables mentors to see the upside from the startups they are helping.
3. 9Mile Success Framework – We’re trying to make the process of picking and supporting startups as objective, repeatable, scalable and measurable as possible. We’ve spent the last few months building out this framework (with a score called the 9Mile Startup Index) and reviewed with dozens of investors, entrepreneurs and executives that we know and respect. The intent is also to make this available to the entrepreneurs themselves so they get an objective “report card” and track this over time. We fully realize, after doing all of this analysis, a lot of this is still about gut feel and very subjective. Eventually, once we’ve refined this model adequately, we would like to share this with others in the startup world. The vision is that we’re able to show some causality between startup success and the 9Mile Startup Index score, but we’re a ways off from that yet.
4. While the program runs for three months, we allow our startups to use our facilities for an additional three months after the program. This provides a “soft landing” to the entrepreneurs after the program. We also believe that B2B startups in general may take slightly longer to accomplish their customer development objectives than B2C startups would.
—How long will companies stay in the program?
“Startups remain in the program for three months. But as mentioned above, we allow startups access to our facilities, the 9Mile partners and the mentor network for an additional 3 months.”
—When will the program start? “The first cohort begins April 8. Demo Day is June 27, 2013.
—What mentors are involved?
Microsoft vice president Tom Casey; GSharp co-founder Enrique Godreau; Ignition Partners managing director Frank Artale; Microsoft senior director Neal Bernstein; Spotzot CEO Bobby Jadhav; Apptio CEO Sunny Gupta; Distinguished Microsoft scientist Anoop Gupta; angel investor Vijay Vahsee; Mixpo CEO Anupam Gupta; Smartsheet chairman Brent Frei; Naya Ventures Partner Gowri Shankar; Gap Inc. senior director Ray Taft; Microsoft vice president Bob Kelly; and many others.
—What’s the significance of the name 9Mile?
“9Mile is based on the 9 components of the Business Model Canvas promoted by Steve Blank in his customer development methodology. We plan to have our startups prescribe quite religiously to Customer Development and Lean Startup methodologies to help them discover a sustainable business model quickly and cheaply. Ultimately, it’s about improving their chances of success.”