Reflections on Techstars: Was It Worth It?
Over the past few months, one question I’ve been asked repeatedly is whether I would recommend Techstars to other founders. It’s a fair question, especially since the program requires a significant equity stake — 6% for a $20,000 investment. At first glance, this might seem like a hefty ask. But when you consider the numerous companies that have gone through Techstars and swear by its value, it’s a question worth exploring deeply.
Why Akara Applied to Techstars
For us at Akara, the decision to join Techstars came down to two main factors: entering the U.S. market and fundraising.
U.S. Market Entry:
As a European company in the healthcare technology space, we knew the U.S. was a critical market for our long-term growth. However, breaking into the U.S. market is no small feat. The healthcare system is vastly different from Europe’s, requiring a well-refined route-to-market strategy. On top of that, there were logistical and time zone challenges, compounded by the operational requirements of supporting pilot deployments of our technology. At the time, we felt these were problems that Techstars could help us tackle more efficiently than we could do alone. With the support and mentorship from the Techstars Healthcare program, we believed we could achieve in three months what might otherwise have taken over a year.Fundraising:
Building at the intersection of robotics and healthcare is not for the faint of heart. The challenges of ‘hard tech’ development, coupled with long sales cycles in healthcare — especially when selling to hospitals — can make investments in this space appear risky, particularly to the more conservative European VCs. We joined the Techstars Healthcare program to gain the support needed to take practical steps toward improving our company and strengthen areas that investors may have concerns. Additionally, we reasoned that being based in Los Angeles would provide exposure to top U.S.-based VCs and allow us to seek investment from a wider pool of investors than would have otherwise been possible.
Inside the Program
Techstars is a three-month sprint, and while every company’s journey differs, the structure broadly follows three phases:
Month 1: Expanding our network, upskilling in entrepreneurship, and conducting market analysis to identify opportunities.
Month 2: Applying insights from the first month to refine our product and messaging strategy while engaging with prospective customers.
Month 3: Closing our first customers, defining our go-to-market strategy, and preparing for Demo Day.
Throughout this process, we spoke with 200+ relevant stakeholders, engaged with 60+ hospitals and attended workshops and founder stories from healthcare companies, like us, that had successfully raised capital and achieved commercial success. Additionally, we took field trips to Minneapolis (where we met with United Healthcare, Optum, Mayo Clinic, and Medtronic) and Boston (where we met with Mass General, Point32Health and had the opportunity to pitch at an investor mixer alongside companies from the Techstars Boston program). Building on our deepening understanding of the U.S. healthcare landscape, we received tailored one-on-one mentorship from some incredible Techstars mentors that helped us refine our product offering, pricing, go-to-market and messaging.
Key Benefits
Looking back, the program delivered immense value in several ways:
Market Insights: We gained unparalleled exposure to the U.S. healthcare ecosystem, engaging with stakeholders across hospitals and beyond.
Advisory Network: We built a robust advisory board, adding commercial and communications advisors who complemented our existing technical expertise.
Peer Collaboration: The camaraderie with other founders in our cohort was an unexpected yet invaluable benefit, fostering collaboration and shared opportunities in numerous ways. Post-program, the CEOs continue to meet virtually a few times a month, providing a valuable sounding board and a platform to seek advice and peer support.
Global Network: Techstars’ renowned network has provided valuable connections with prospective customers, partners, and investors.
Practical Support: After the program ended, we were permitted to work from the Techstars LA office space and given a place to store our robot. We continue to meet regularly with Matt Kozlov, the program MD, who has provided a number of important introductions and recommendations for us.
Advice for founders considering Techstars
If you’re considering Techstars, here are two pieces of advice:
Define Clear Goals: Enter with a clear vision of what you want to achieve. During the program, things get hectic and I found that having primary objectives allowed me to focus my energy on the things that mattered most. For us, these were refining our product for the U.S. market and securing our first U.S. customer.
Commit Fully: Make Techstars your top priority. We immersed ourselves completely, relocating to LA for the program and putting other tasks on hold. It was leap of faith, but thankfully one that paid has off.
Pitfalls to Avoid
While Techstars offers significant value, it’s not a silver bullet. Here are a few things to keep in mind:
Don’t join just for the Techstars brand. Techstars opens doors, but you’ll need to put in the work to capitalize on the opportunity.
Research your program and Managing Director. Ensure their vision aligns with yours and that the program’s sponsors are active and engaged.
Manage expectations for Demo Day. It’s a great platform to launch investor conversations, but closing rounds still takes time.
Final Thoughts
Joining Techstars has been one of the best strategic decisions in Akara’s history. While it’s not without trade-offs, the value we’ve gained in market insights, connections, and growth has been immeasurable. For founders willing to commit and put in the work, Techstars can be a game-changer.
