Why Kate Kendall wants to shift the focus from funding as she launches new pre-accelerator Atto
Monday, January 14, 2019/
CloudPeeps founder Kate Kendall has launched a new remote pre-accelerator program designed to help Aussie women founders approach their early-stage startup ventures with a bit more chill.
The Atto Accelerator is based out of the One Roof women-led co-working space, where Kendall has taken up the mantle of entrepreneur-in-residence, with funding from LaunchVic.
The 12-week program covers accounting, pricing models, building and audience and planning out an MVP, helping first-time entrepreneurs to dip their toes into the ecosystem.
Speaking to StartupSmart, Kendall says accelerators can tend to encourage startups to get as much done as possible in a short space of time, with a view to pitching for investment at a final demo day.
Kendall is more interested in an “indie” approach, focused on profitability, rather than on rapid growth.
“We get obsessed with raising money, we get obsessed with networking with VCs,” she says.
Atto will focus on the basics, giving women entrepreneurs “the tools so they can be quite independent in the way they build the company”, she adds.
If founders give away significant equity early on in their journey, they may become too diluted to be attractive for later-stage investments.
“The more independent you are, and the better position you can get in, the more power you have when you then go to scale,” Kendall says.
The growth obsession
Having spent time in Silicon Valley, Kendall is all too aware of the growth-at-all-costs mentality that reigns in the global tech capital.
Uber, for example, “started to operate outside the boundaries of the law” and saw a high turnover of staff.
“You can still have a very profitable business that grows without having to raise as much money as possible and churn through as many people as possible,” Kendall says.
Equally, she points to startups that have raised a lot but still not succeeded. You can raise a lot of money, and shoulder the pressure that comes with that, “but if you don’t have the right unit economics, the right customers and product-market fit, it’s not going to help”, she adds.
On the other hand, Atlassian — Australia’s favourite startup success story — was bootstrapped for its first eight years, Kendall notes.
“I think we have to swing the pendulum back a bit,” she says.
“You’re not a loser if you haven’t raised money and if you want to bootstrap for a while,” she adds.
While she advocates for a more relaxed approach to growth, Kendall isn’t against VC funding altogether. She simply suggests it shouldn’t be the first and only thing on a founder’s mind.
“There isn’t a one-size-fits-all for success in startup land, and the more that we celebrate different versions, the better it is.”
A startup creating an autonomous vehicle, for example, may need a lot of money to get off the ground. But a lot of companies such as marketplaces of Software-as-a-Service businesses can be self-sufficient, Kendall says.
“A lot of these companies aren’t capital intensive anymore — you can actually do a lot with a little,” she adds.
“VC is the right pathway for some, and it is needed and vital, but it’s not for everyone.”
It’s time for a new mindset, and to get back to focusing on what really matters, she says, which is “having a product that really satisfies a need”.
The startup ecosystem across the world is ready for a new mindset, Kendall says — and Australia is the place for it to start.
“We’re used to being outliers and bootstrappers and making do with what we have,” she says.
“If we celebrate this indie path and show more indie options and get away from being obsessed with raising money and trying to replicate Silicon Valley’s version of success, we’ll have a lot more growth in the ecosystem.”
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