If you cover the technology startup industry, two words you are getting sick of seeing are “bubble” and “unicorn.”
In place of the former, you are hearing more about a coming “correction” in valuations and so forth. In place of the latter, you mostly get people shaking their heads at what the term even means.
You wouldn’t think a startup accelerator would be a safe haven from such talk, but this is Boston. And over the years, the Techstars Boston program has tended to reflect the grittier, in-the-trenches aspects of building young businesses. Emphasis on businesses—not hype-y potential. The most recent class is no exception.
Look at some of the companies that presented at the demo day on Tuesday: doDOC, which handles regulatory documents (the founders have backgrounds in physics and bioengineering); Cuseum, which makes location-based mobile tech for museums; and ThriveHive, which is using data science and predictive models to help small businesses do marketing.
Those businesses aren’t necessarily sexy, but are targeted at specific niches and have real customers. (OK, the startups SmackHigh and Hot might be going for sexy, in high-school message boards and hotel booking. And grocery delivery and 3D printing are represented by CartFresh and Kwambio. But nary a drone, wearables, or online-lending company in the class, at least.)
This week, Techstars Boston preceded its demo day with a more intimate investor-pitch day, for the first time. The goal was to separate the fundraising aspect of the companies from the public reveals of what they’re building. Lumping it all into one demo day event “wasn’t progressing things for the investment function of it,” says Ty Danco, a director of the Boston program, who works with managing director Semyon Dukach.
Not surprisingly, Danco says the feedback from participating investors this week has been “uniformly welcome and positive.” It sounds like they came from all over—not just familiar Boston-area angel investors and venture capitalists, but investors from New York, Europe, and the West Coast as well.
It remains to be seen just how excited investors and potential acquirers will be about the latest Techstars Boston class. But many of the companies had already raised money and built customer relationships coming into the program.
Take ThriveHive, which has been around for four years, building a business around online marketing. CEO Max Faingezicht says his 22-person company entered the Techstars program with “meaningful revenue” and is “now seeing much faster growth, like textbook acceleration.” The startup’s monthly revenue increased by about 50 percent during the 12-week program, he says, and it should approach a $1 million annual run rate by the end of 2015.
Faingezicht says his accelerator peers are “real companies that are getting real serious traction.” In his Techstars experience, he says there was “no talk about a downturn. We’re all focused on creating value—on building real companies, helping real people with real problems.”
Other alumni of the accelerator have noticed a shift in the level of businesses. “It feels like the companies are much further along than we were,” says Matt Barba, co-founder and CEO of Placester, which went through Techstars in 2011. (He’s referring to his company’s monthly revenue and number of customers when he did the program). Boston-based Placester, a real estate software firm, has since raised $23 million and now has 80-some employees.
Techstars Boston has become an institution since its start in 2009, just after Y Combinator left town. Its active graduates include Bevi, CoachUp, Freight Farms, Ginger.io, Kinvey, Ovuline, PillPack, and The Tap Lab. Its startup exits include DocTrackr, UberSense, and GrabCAD, which has been the program’s biggest acquisition to date ($100 million by Stratasys last year).
