“Changing the Way We Start Companies”: Q&A with AngelPad’s Thomas Korte
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you bring people in to tell you an idea that you then own a majority stake in? It’s the wrong way to go about it. That’s not the kind of founder you want.
So when you saw the next wave of incubators coming out—and I personally dislike the word “incubator” very much, because it misrepresents what the second wave is all about, which is Paul Graham with Y Combinator. Paul early on had very young founders coming out of college, saying “Hey, I could do grad school, or get a job at Google, or I can start my own company,” and he really helps them through the process. There was still a big question mark for me about whether you could cross the chasm to a more mature founder, a founder that has five years at Google behind him, that probably could go out by himself to raise money. And through the process I found out that it’s not about the money. Of course raising money is part of the life cycle of a company, but it’s much more about being part of an environment where other smart people operate, they tackle big problems, they challenge each others’ assumptions, and having access to all these mentors who are going to help you through the process. When you have smart people with good ideas and big visions, the money comes.
X: Do you see AngelPad as part of that second wave? Is it the same kind of animal?
TK: Very much so. I would group Y Combinator, TechStars, AngelPad in the same category. We all carve out our own niche, be it geographic, or what kind of companies we attract, or what kind of founders we attract.
X: Okay, so what is your niche? I’m assuming it has something to do with this focus on Google alumni, basically.
X: Well, that’s how it looks.
TK: It does very much look like that. That’s because the seven people who started it, we have known each other from the last 10 years of working at Google, and our social network, our offline social network, is very much around Google and ex-Googlers. So right now this group is 60 percent ex-Google. Over time that is going to decrease. We didn’t have a public application process. This was literally invitation-only on the first iteration. We asked our network, “Who is about to start a company, who just started a company?,” and really picked founders from there.
X: Is the whole thing self-funded at this point? The seven ex-Googlers who got together to start AngelPad are putting up the capital for the stipends?
TK: Yes, exactly. A subset of the mentors are the ones who are footing the bill.
X: It does strike me that this group of people, as a cross section of founders, is a little older and more experienced. They might have been around the block one more time than the typical Y Combinator group or the typical TechStars group. A lot of them do have that Google pedigree. So they’ve been thinking about big data and measurability and metrics for a long time. I wondered whether that was part of your formula—to go out and look for people who are already proven, as a way of improving your chances of getting a payback on your investment.
TK: I don’t think it’s so much about having a payback. All of us are slightly older, so this is kind of our social circle. What is different is that these groups are attacking problems that they had seen in their professional careers, not so much in their pre-professional careers. When you look at Facebook, for example: Facebook had to be started by someone who was in college, understanding a problem. If you solve someone’s problem, if you understand that problem like no one else, then you can … Next Page »