Last month, I had the honor of speaking at a TEDx event, TEDX HKUST, here in Hong Kong. This one was hosted by Hong Kong University of Science and Technology. The crowd was standing room only and packed with excited and eager students. There were 8 awe inspiring speakers, plus me. The speakers were:

• Rob Lilwall
• Sir David Tang
• Emma Reynolds
• Me
• Puja Kapai
• Stuart Palm
• David Begbie
• Jan Metzger
• Melissa Mowbray-D’Arbela

My talk was on innovation and how startups cause disruption. After describing how much the economics of startups has changed, I encouraged those willing to start a business to give a try. I focused on how the culture in Hong Kong is a banker’s culture and how the Tiger Mom’s as well as HSBC need to change in order to support innovation and entrepreneurship.

Similar to collage application season, it is accelerator application season with many major accelerator’s deadline looming. (AcceleratorHK’s own deadline is April 15th.) Since Paul and I run two accelerators, we get bombarded with questions from people applying to accelerators with the same question: “what do you look for in an application?” Here are five things to think about.

Criteria 1: The Optimal Team Size and Dynamic

Yes, you have to be be a “rock star” or a “hacker” to succeed. That is a given, however, when I see an application with only one applicant, I usually stop reading it.  Too many times I see a tech guy who stumbled across a cool piece of IP and thinks that they can “build it and they will come.” Or a smart “business guy” who underestimates the technical aspects of the problem and thinks that they can just outsource the IT (big mistake, see my opinion here on why you need a tech cofounder.) You can’t do this alone.

The optimal team size is two, one tech guy and one business guy as equal partners. The working relationship between them should be ideal, and they should like each other and be able to joke around with each other. Lastly, and equally as important, they should be passionate about the problem space that they are in. If you don’t have two awesome cofounders that compliment each other and work well with each other, don’t even bother applying.

Criteria 2: “Fund for the Pivot”

The reason why we like good people and solid teams is that you most likely won’t be working on the same project when you leave the accelerator then what you have applied with. So don’t try to convince me that you are the next Facebook, show me your 5 year financial projections, and god forbid, your patents (immediate rejection.) The whole purpose of an accelerator is to put you through the process of customer development and have you via MVPs/prototypes and rapid iteration from feedback build something that people actually want, not what you think they want.

First you need to have smart and talented people that are open to coaching and changing their offering. Second you need them to be in a hot space with huge opportunity.  If the original idea fails, but you are in a hot space, most likely you will “pivot” into something really awesome. As Paul Grahm of Ycombinator famously says “fund for the pivot”, so sell yourself and your space, not necessarily your idea.

Criteria 3: Demonstrate That You Will Take the Program Seriously

Accelerator programs are full time, not nights and weekends. If you can’t commit 100% of your time for 14 weeks, don’t bother applying. When I see the note on an application that says only one member can come to the program full time and the other guys will “drop in from time to time”, I usually stop reading. The value of the program is the time you spend in it. I get it that you have friends, family, and other obligations, but if you wife is due to have a baby three weeks into the program, you may want to consider sitting this round out and applying next year.

Criteria 4: Rock Your Elevator Pitch

I have watched hundreds of application elevator pitch videos. You have to rock it. Again, don’t sell the startup; sell your ability to sell the startup. Show me that you can sell snow to Eskimos. Be creative. One team filmed their elevator pitch in an actual elevator! I still remember one video where one team sat at a table and introduced themselves, the coder never looked at the camera and only  looked up when called on to say “I code” and the biz dev guy said that he also did pyrotechnics (and a funny explosion animation triggered.)

Skipping the video, producing a piece of crap, or focusing just on the product is an almost automatic rejection.

Criteria 5: Demonstrate the Ability to Execute

At the end of the day, can you do the job? You have to demonstrate your ability to execute. Also make sure you are not in love with being in a startup (a vanity entrepreneur) and actually want to run this business forever. We all want to be the next Steve Jobs and Bill Gates, so remember they also stayed at their companies for 20+ years. (Steve even came back after he was kicked out.) Mark Zuckerberg has been working at Facebook for almost 10 years. Don’t do this because it’s cool, do it because you want to change the world!

Back in February, Accelerator HK cohort #1 had its Demo Day. As promised, here is the entire Demo Day video where the six teams made their presentations. Enjoy.

Earlier this week we opened the applications for the second cohort of AcceleratorHK, a startup accelerator I co-founded here in Hong Kong. As I broadcast the information out into my network, some former colleagues who never really liked me replied back smugly: “oh you are doing an Accelerator too? I heard there is an accelerator bubble.” Even the guy who I talk to at the gym told me that there are “a million accelerators out there.” Businessweek ran a story today about how the Accelerator bubble is going to pop.

While there is a proliferation of accelerators, there is no accelerator bubble. According to Wikipedia an economic bubble is:

An economic bubble (sometimes referred to as a speculative bubble, or a market bubble..) is "trade in high volumes at prices that are considerably at variance with intrinsic values". It could also be described as a trade in products or assets with inflated values.

The .com era was a bubble. Crazed investors pumped tons of money into speculative companies and inflated their values to levels not justified by true market conditions. Ditto the US and European housing markets last decade. But accelerators? Not so much.

For starters accelerators are cheap to put together (compared to raising $100 million to start your own Venture Capital fund) and usually done with your own money. (Note, no investor money was used to start AcceleratorHK, it is 100% funded by its parent company, Telerik.) Maybe people are referring to the companies going through the accelerators, that the proliferation of accelerators is drastically raising the valuations of all those companies that go through them. The standard practice of an accelerator is to invest $15,000 for 8% of equity, making the book valuation of these early stage companies under $200,000. Far less inflationary to valuations than a “friends and family” round. Actually the proliferation of accelerators are driving down the valuations of early stage startups! Considering that all accelerators operate on the same terms, we are more of a price fixing cartel than a speculative security in a bubble.

A few weeks ago I was speaking at Hong Kong’s Barcamp on the topic of the New New Startups Economics. My thesis is that the cost of starting a new business is about 20x cheaper than it was 15 years ago. The cost of going from business plan/idea to your first paying customer is measured in the thousands of dollars, not the millions or hundreds of thousands of dollars. I argued that accelerators are starting to replace the early round of seed capital such as “friends and family”. Since it is less risky and cheaper to start a company and there are more people willing to jump in, the combination of education and capital that an accelerator brings to the table is really the superior model. We have lots of inexperienced, but passionate people out there wanting to start a business in all parts of the world. As Eric Ries says: entrepreneurship can be taught. Accelerators teach entrepreneurship by doing. The best way.

Then someone asked me if there are too many accelerators and if I see any contraction coming in the space. I said “No way! We need more, not less accelerators!” Accelerators are like startup entrepreneurship universities. The world needs more of them. More accelerators mean more startups which mean more disruptive technology.

Will some crappy accelerators start to pop up? Sure. But they won’t survive and the market will self-correct. Maybe someone should do a “Zagat for Accelerators.”

PS, applications close on April 5th for AcceleratorHK.

AcceleratorHK, the world’s only startup accelerator focused on cross platform mobile development with HTML5 and Phonegap, has opened its applications for cohort #2 to be based in Hong Kong. The 14 week program runs from May 13th until August 16th, with Demo Day the week of August 12th in Hong Kong.

The application is here and will remain open for three weeks, until April 5th. The short listed companies will be lined up for interviews in early April and the final selected companies will be notified by mid to late April. As explained in our “About” page, we will be making a $15,000 (USD) investment in each company in exchange for an 8% equity stake as well as be providing co-working space for the 14 weeks in Hong Kong as well as a program in Customer Development.

The best applications are teams of two co-founders, one “business” and one “technical”. The team should have an idea and be ready to do customer development on that idea-even be willing to start over if that is what the results of their customer development tells them.

Hong Kong is an awesome place to customer development and validate your mobile app. The place is mobile crazy and everyone has a smart phone.

The first cohort of AcceleratorHK graduated on February 6th at their Demo Day. Take a look at how much fun it was preparing for Demo Day.

AcceleratorHK Demo Day Prep from Stephen Forte on Vimeo.

Last night the first AcceleratorHK cohort had its “graduation” Demo Day at the Time Warner Center in Hong Kong.

An accelerator is meant to speed up a startup’s progress over what they would have done on their own. Studies show that accelerators double or even triple the progress you would have made on your own. The goal is that if you are in a 3-month accelerator you should accomplish what you would have done in 6-9 months. Our teams in AcceleratorHK did exactly that, working on their Business Model Canvas for weeks (specifically on their segments and value proposition) and starting to build out their offering.

After 14 weeks of the accelerator program, the teams were ready to show the world what they had accomplished last night at Demo Day. Some teams had a “demo” of their app, some were just getting started and showed off their progress and discussed next steps. This is because some teams took longer to refine their idea (perfectly ok, exactly what an accelerator is suppose to do.)

We were oversubscribed and about 175 people crowded into the Time Warner offices and we had to have an overflow room with live streaming. Paul and I kicked it off with a short introduction as to what AcceleratorHK is, how an accelerator works, and what Demo Day is all about. Then the teams started their presentations.

First up was Taxiwise with Jean-Marc Ly as the presenter. Taxiwise is an app that allows you to make advance bookings of taxis in Hong Kong. Today you can do this offline, but it is painful to deal with the dispatchers, especially if you only speak English. Their app is driver specific and it creates a great experience for the user (us riders!)

Next up was PayAllies with Carlos Grajeda aka “Carlos 2” as the presenter. This was Carlos’ first presentation in English! PayAllies is from Mexico and is solving the unbanked problem since only 17% of Mexicans have credit cards and 34% have bank accounts. They are like a debit/gift card/Google Wallet meets the Octopus card for Latin America. PayAllies is AcceleratorHK’s first success story, immediately after graduation they are headed to the Chilean incubator, Startup Chile for six months.

Our third presentation was SurroundApp with Jeffrey Broer as the presenter. Surround solves the problem of English speakers wanting to engage with Chinese social media (half a billion Weibo users!) What is pretty cool about SurroundApp is that they can even translate slang into its “street” or common usage.

After that was  Dynamino Lau Kok-hwa aka “Special-K” as the presenter. Dynamino is a new marketing campaign creation app that allows people to spread their campaigns by word of mouth.  In their testing they found out that they were equally as effective as Facebook ads but 23x less expensive!

The penultimate team was 100 Village with Nick Wang as the presenter. 100 Village is a social venture that is focused on the Reggio Emilia approach (REA) to early childhood education. Nick gave a very passionate and inspiring speech about how schools are killing our kids creativity and how something as simple as playgroups can make a huge difference with the kids’ development. 100 Village’s app is “meetup for moms” where it helps facilitate the organization of REA style playgroups.

Last, but not least was GOnnect with Furuzonfar aka “Foobar” as the presenter. GOnnect is an app that helps you find, make, and keep connections at an event. They solve the problem of who you should talk to at an event by matching you up with someone to network with and making it easy to connect with them later on via LinkedIN or something similar. Finally we can do away with business cards!

After the presentations, we had a reception for the audience to come and meet the teams at their booths. In order to force the audience to mingle and network with the teams, we provided cold beer at each of the teams’ table. In addition, each team had a drink and food from their home country. The teams were mobbed!

Carlos Rivera aka “Carlos 1” had to head back to Mexico to get his visas for Startups Chile so he could not attend, but we Skyped him in all night. Here he is talking to potential investors.

I was surprised by the amount of investors, media, and government officials that attended. Maybe they just wanted the free vodka that Team GOnnect provided.  

We’ll be opening up the applications for cohort #2 in a few weeks with a start date slated for mid-May. Stay tuned if you want to apply. :)

In November, six new startups entered AcceleratorHK, Hong Kong's first startup accelerator -- and the world’s only accelerator focused on hybrid mobile development. I can’t believe how fast it all went by! After 14 weeks, the AcceleratorHK cohort is graduating at Demo Day on Wednesday 06 Feb.

The format for Demo Day will be as follows:

7pm (sharp!): Introduction by Stephen Forte and Paul Orlando, program organizers.

7:10pm: Presentations by the six startups, seven minutes each. No Q&A by the audience.

8:15pm to 9:30pm: Meet and greet each team. Each team will be in a conference room where you can go and ask questions, get a demo, and of course, get a drink! Each team will be serving a drink from their home country and AcceleratorHK is providing beer and soda in the conference rooms as well.

Please arrive early! We only have 85 seats in the main room, all late comers will have to go to the live streaming overflow rooms (we have room for 75 more people there.) Since we are being hosted by Time Warner Asia, the live streaming will be in super quality HD, CNN lent us a high tech splitter!

The location is at (MTR Quarry Bay Exit A: turn right, go up the stairs over the overpass and walk through Taikoo Place all the way to the end to Oxford House):

30/F Oxford House
979 King's Road, Taikoo Place
Quarry Bay
Hong Kong SAR China

See you Wednesday!

As the AcceleratorHK cohort teams are rounding out their Demo Day presentations, I am proud to announce that Paul and I are running a new (semi) Virtual Accelerator focusing on Win8 App development.

The focus of the accelerator is early stage startups who are willing to work on their business full time.  As always our preference is for a two person (or more) team that has at least one techie and one business co-founder and is willing to work on the project full time.

The selected company will receive a $30,000 (USD) investment (for 4%-8% equity) from Telerik and be put through a 14 week program starting with an intense week onsite in Hong Kong alongside the next AcceleratorHK cohort working on customer development. (We’ll pay your airfare and housing for the week in Hong Kong in addition to the investment.) After the week in Hong Kong the team will return home (or decide to stay in Hong Kong, but it will have to come out of the $30k ) and do the customer development process with guidance from the Accelerator virtually. At then end we will help you launch your product to the world and have your business take the next step.

The application is here, apply today! The deadline is March 15th. The world famous Robert Scoble is helping determine the company that is accepted.

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Update 04 Feb 2013

Originally I wrote that there was no equity taken, that was my mistake, we take between 4% and 8% equity for the $30,000 investment. Sorry for the confusion.