“Changing the Way We Start Companies”: Q&A with AngelPad’s Thomas Korte
Last week I reported on the inaugural demo day presentations from startups at San Francisco-based AngelPad, the newest of the Y Combinator-style tech incubators springing up around the country. After the presentations I had a chance to speak with Thomas Korte, one of the founders of AngelPad, about the vision behind the program, and I’ve written up the full interview below.
Korte says he and six other ex-Google executives (Richard Chen, Keval Desai, Vibhu Mittal, Deep Nishar, Gokul Rajaram, and David Scacco) started AngelPad in order to create space for founders who are slightly older and more experienced than those who join other incubators like Y Combinator or TechStars. And indeed, 60 percent of the founders invited to join the first group of AngelPad companies are themselves Google alumni, usually with several years of engineering experience under their belts. (Korte says that the proportion of ex-Googlers will drop over time, now that the AngelPad application process is open to anyone.)
In the venture world, it’s sometimes said that there’s too much money chasing too few good ideas. But far from worrying that there might be too many incubators these days, Korte says there should be many more. The rise of incubators, he argues, is basically an indictment of business and engineering schools, which he believes don’t really prepare their graduates to be entrepreneurs. “I think there ought to be hundreds more incubators,” Korte says, including wine-company incubators, restaurant-company incubators, university-specific incubators—essentially, one for every geography and specialty.
Most incubators these days offer startup founders roughly the same combination of services. That includes help defining a product idea and a business model, encouragement and mentorship from experienced entrepreneurs, an artificial 10- or 12-week timetable to encourage rapid iteration, and, of course, a moderate amount of cash (in return for a small amount of equity) and access to a larger community of investors.
That’s the formula at Y Combinator and TechStars, and AngelPad is no exception, Korte says. He credits Y Combinator’s Paul Graham with inventing the model (and says he’s made individual investments in over two dozen Y Combinator companies). “It’s exhilarating,” Korte says. “We’re changing the way companies are started. I think the likelihood of them succeeding is going to be much, much higher.”
Here’s the full Q&A.
Xconomy: What’s your sense of how the pitches went tonight?
Thomas Korte: I think it was really good. I think one thing early on for me [was that] I wanted to have a diverse group of companies that do different things in interesting spaces. And one thing through the program that we continuously hit on was, ‘Do something big. Try to change the world and see where you end up, and you’re going to have an impact. But if you start with a small problem, it’s not going to be interesting.’ I think we succeeded in that. We have mostly companies that are willing to take on big problems.
X: I can see that with MoPub, with AdKu. Most of these companies are addressing big markets.
TK: Not so much big markets. Obviously, big markets are interesting to me as an investor. But when I look at the challenges that they tackle—even something like Curate.by. Everyone talks about the social graph and people tend to forget about the interest graph. My Facebook feed today is full of stuff that I’m frankly not that interested in. If it were random people [instead of my friends], I wouldn’t even read it. It would just be noise. But this really surfaces the interesting stuff. If I were to get the stuff that you tweet about, that is relevant to the economy and startups, I would love to have that. I think from that perspective, they all take on big challenges.
X: Fill me in about how AngelPad was born. You said in your introduction that you almost didn’t do this until you got encouragement from one particular team, I think it was Snip.ly, which said they would joining up if you did this, which gave you some validation that you would be able to get some cool teams that would want to be part of it.
TK: Yes. If you look at the history of incubators, it’s not a good history. Incubators 1.0, back in the bubble, were big funds that would force people to use their services. They would bring people in and have ideas and spin them out of the incubator. There were few that were really successful. It was like, … Next Page »