How your cohort multiplies the value of your business — Accelerating Asia
What is the cohort effect? At Accelerating Asia the cohort effect is the value that is unlocked by the community and networks that a founder is able to sustain.
Herein we'll briefly breakdown how the community and in particular a cohort of portfolio companies add value to one another. Then how founding teams ensure the ongoing support of their community. Followed by some examples from existing portfolio companies.
It's counter-intuitive, but the world often wants you to chalk up the wins to an individual. It's a normal part of our maturation to realise messages need to be simple. Complicated means variance and variance means risk. And so the market constructs a simplified reality it is willing to bear. We render the world into easy to consume binaries. Right vs wrong, profit vs loss, and individuals vs the ineffable network of supporters. This is part of the reason why the value of community is de-weighted. It's easy to do so.
You will hear people say "It takes a village to raise a child". The network map of the paypal mafia highlights that it takes a village to scale a startup. And an accelerator cohort can be a big part of that.
HOW DOES COMMUNITY ADD VALUE?
Founding teams know the journey is equal parts timing (luck), effort and resilience. There’s a lot of different parts - internal and external - that contribute to these factors, but after running multiple accelerators and being a founder myself, I’ve learnt that the strength of your community and network generate momentum quickly and effectively
Timing (Luck), does your community unearth and filter opportunities with honesty and integrity for you?
Effort, does your community motivate you to be the best human you can be?
Resilience, does your community lift you up and refill your batteries in tough times? And does it offer diverse points of view?
For those that are more balance sheet inclined, a community and network can:
- Reduce the cost of capital.
- Reduce cost per acquisition of enterprise clients and partners.
- Reduce recruitment and retention costs.
- Reduce the risk of entering new markets or verticals.
ENSURING ONGOING VALUE ATTRIBUTION?
Investment by an angel, VC or mentor, brings community value, network connections and offers credibility (often quickly) to your startup. Some founders are better at realising this value than others. And every community member decides consciously or unconsciously if and when it makes sense to provide their social capital to support a startup
How readily this is realised depends on a few factors within a community members control;
- Shared values and vision.
- Recency and relevance.
Shared Vision and Values: People generally like to support people that are working on a vision of the world they align with. I've seen this signalled by founders to their network in the following ways;
- Founding a company with an impact at its core.
- Consistency within communications and interactions.
- Honesty and integrity.
The signals of shared vision and values work two-fold. One, it shows us that we're participating in the world we desire. And two, in seeing consistent behaviours that align with our values. It tells us that the person we're helping will safeguard and respect the value we're giving.
Some ways founders can unlock and indicate shared vision and values that I've experienced;
- Closing meetings with "how can I help you or add to your trajectory".
- Timely follow-ups on introductions. The best founders and investors typically follow up within a day and often within hours.
- Asks, where it is evident that the other community member has done the research or pre-work. Indicating that there is a mutual respect for time.
Recency and relevance: It's easy to add value and connect people that you remember within your network. I remember thinking during a capital raise that dragged-on over Christmas and New Years. "I want investors talking about our startup at their Sunday barbecue".
You can optimise for recency the following ways;
The most successful startups and scale-ups send a monthly email update. Monthly updates to your community of supporters, why and how:
- It reduces the need for in-person meetings when you're head down sprinting.
- Monthly updates keep your investors and prospects warm to your story.
- Provides an opportunity to respond with solutions or connections associated with your asks.
The best way to do this is to utilise a CRM or reminder systems to ensure that you can effectively prioritise and be notified when to follow up with those that are and will contribute to your vision.
SOME RECENT EXAMPLES
We’ve found that the network and community that comes with the Accelerating Asia program, are some of the best examples of how startups have leveraged a community in order to optimise activities. Here are some recent examples from our cohorts
Optimising the cost of capital.
Typically building a relationship with investors can take months or years. Inside of the first few weeks of the program, Numu World closed their round with investors and mentors from the Accelerating Asia network and program.
Carlos the CEO and Founder of Numu has one of the most systematic approaches to connecting with the community I’ve seen. Monitoring his community workflows via a set of AirTable sheets and always sending out monthly updates without fail.
Optimising the cost per acquisition of enterprise clients and partners.
Knowing your enterprise clients is a discovery process that every startup runs. Companies like Panalyt and IZY.ai to name a few, have a base of clients throughout the region. So there’s always someone within the portfolio that has data points that reduce the time it takes to orientate.
Optimising recruitment and retention costs.
Below is an example of a chat between founders on recruiting a hard to fill position. That would typically cost +$30k in recruitment fees and multiple interviews to ascertain the fit. I’ve taken the liberty of removing the names of the GloboCorps in the image below.
Managing and optimising the risk of entering new markets or verticals.
When you’re part of a community that spans across multiple countries in the region. It’s usually a lot easier to get comfortable with expanding into new markets.
Earlier this year iFarmer expanded its presence from Bangladesh to Myanmar inside of 100 days. Myanmar based company Recyglo who expanded into Malaysia. During the onset of COVID-19 iFarmer and PriyoShop collaborated to deliver fresh produce to people’s doors from farms in Bangladesh. The learnings between companies on market expansions become super valuable in reducing the initial friction when entering a market and knowing which partners to work with.
TAKE-AWAYS
In general, most founders overcome some friction from the status quo when you first found a company. We develop reflexive independence to overcome cultural limitations and naysayers. Yet, the value that we unlock when we find our peer group is what a cohort, community, and portfolio is about.