Every startup founder has two fears: failure and having to keep their start-up as a side-hustle for much longer than they desire. To work with entrepreneurs towards conquering or moving past these fears and actually survive, there have since emerged key players in startup ecosystems known as ‘accelerators’. Accelerators support early-stage, growth-driven companies through mentorship and financing, helping them steer clear of mistakes new businesses make, as well as connecting them to appropriate parties that can help them further.
In recent past, we have seen accelerators spring up in different parts of the world, including Nigeria. But while every accelerator has its own eligibility criteria, program duration, and performance criteria for a startup to continue in the program and graduate, not a lot of them accommodate “underserved populations”. This is why we found New York-based Startup52 diversity-focused accelerator quite unique and intriguing.
Founded by Educator, Entrepreneur, Investor, Humanitarian and Biomedical Engineer, Chike Ukaegbu, who sees it as “a safe haven for entrepreneurs from backgrounds traditionally underrepresented in the technology sector”, Startup52 since its launch in 2015 has been doing exceptional work with redefining representation through diversity and inclusion in tech and entrepreneurial spaces. In this interview with Glam Africa, Startup52’s CEO offers up an immense dose of founder philosophy and productivity tips. He also shares his startup experience and reveals top tips to fund new startups.
Briefly, tell us the start-up story behind Startup52. Where did the idea come from and what exactly does it do?
CU: Startup 52 is focused on what I would call untapped communities: people of color, women, LGBTQ, veterans, immigrants, and people with disabilities. So, basically, if you feel like you don’t belong, you actually belong with us. Startup52 provides access to capital, resources, and a safe haven for entrepreneurs from backgrounds traditionally underrepresented in the technology sector. The idea for the accelerator came as a result of my experience running a program we designed at Re:LIFE called The URBN Youth Start-UP (UYS), an intensive project-based 15-week entrepreneurship program in Harlem. Many students accepted into the program were victims of domestic violence, formerly incarcerated, high school dropouts, homeless, and more. Yet, by the end of the scheme, graduates were presenting innovative tech ideas to a panel of judges. Only about one percent of venture funding goes to black founders, and many of these young people get frustrated with the program because they don’t have the network or capital to pursue what they want to do. I was determined to see the talented young entrepreneurs go beyond the program and develop their ideas. The idea of creating something that would create better access to resources and capital to help these students [and other entrepreneurs] see that their ideas and small ventures were important is how Startup52 came to being.
How did your professional experience prepare you to be the founder of Startup52.?
CU: I believe that the best preparation I had prior to Startup52 was through Re:LIFE. Re:LIFE taught me a lot about management, creativity, building strategic partnerships, different nuances involved with the relationships with stakeholders, and so much more. But most importantly, it taught me to understand the importance of building cultures and ecosystems that create safe spaces for all. I’m still learning, but the learning curve today is not as steep as it was working with the Re:LIFE demographic.
Besides these, I think that everything that I’ve done in the past has found a way of being relevant in the building or growth of Startup52. From my Biomedical Engineering background, finance and venture capital, leadership and public policy as an alumni Colin Powell fellow, organizational management and exec leadership, 7 years of teaching at the college level, among others have all proved useful in some way.
What motivated you to work towards an inclusive tech ecosystem?
CU: Initially, it was to create more opportunities for the Re: LIFE demographic to succeed in entrepreneurship. Then it morphed into the need for increased representation of people of color in tech and funding spaces to fund more people who looked like me. Until I realized that it was also not just a social impact cause, but a profitable one. Diversity and inclusion are apparently very important to me. It is my own missionary work. It gives me the opportunity to fight for others so that my children and other generations will have equitable access to opportunities for success
How do you go about marketing your business and what has been the most successful form of marketing for you?
CU: I am not a marketing guru. However, I was invited to a recent Summit to speak on how to craft a great message to successfully market your brand. In topics where I am not very confident, I speak from my own experience and add a disclaimer. So technically, this is what works/worked for me but may not work for everyone. For me, there are 5 parts to crafting a compelling message – Vision, Mission, Timing, Marketing Hook/Hack and The Close. These 5 parts must come together cohesively to achieve 3 things – Connect with an Audience, Engage and trigger a reaction, and Deliver a result. Vision is the big picture, what drives what you do. Mission is what you are doing to achieve the big picture. Timing just means that – Is the message timely? Marketing Hook is what gets them. This is what turns your audience into marketing ambassadors. The hack is how you get the word out. What you do to cause virality. The Close is what you want them to do/make them do. If successfully done, this will connect with your audience, emotionally or otherwise. The intensity of the connection will result in engagement and trigger a reaction (shares, likes, loves, comments, video responses, etc. But more importantly, depending on your Close, this should deliver a result – a perception of your brand (whether good or bad), which in turn could lead to donations, increased/decreased sales, virality, popularity, etc. These are the driving forces behind whatever we put out, whether an original article, shared article, commentary, etc. Hopefully, that makes sense.
Which do you think is most important: the right market, the right product, or the right team?
CU: (Laughs) I usually hate questions like these because they are all important. However, to me, the right team trumps product and market. With the right team, you can pivot to something else that works, or go after a different market if need be, but product without team or market would not work and market without product or team will also not work out eventually. So Team rules.
I am also a people person anyways
How do you separate yourself from your competitors? What makes you different?
CU: Once again, I don’t compete. All I do daily, is strive to stay true to my purpose. I am in the business of empowerment. Competition distracts from the bigger picture. However, it is important to stay relevant, and one does that by understanding what others are doing and adapting if need be to ensure that you are doing the best that you can all the time.
To the second question, there are a couple things that I believe differentiates us though. First, our diversity positioning – Most people who work in diversity tend to silo their solutions i.e. either focus intently on just people of color, or just women or veterans, etc. While this is great for social impact, it almost misses the profitability positioning of diversity, which we are huge proponents of. Diversity is profitable when applied at the founding level. This means that a team of four black male founders is not diverse. A better team will be one that reflects diverse backgrounds, mixed gender and different perspectives. This tends to result in better innovative solutions that could translate to newer markets, increased success and higher profitability.
How are you funded? What is your best advice to entrepreneurs when it comes to raising funds?
CU: The mistake I have seen with several entrepreneurs today is, you come up with an idea, sometimes lousy at best, and then believe that it’s your right to get funded on that. Many get disappointed when they are rejected. Now that doesn’t take away from the many who toil very hard and still don’t get what’s due to them. That being said, I believe an entrepreneur’s MOST important task is figuring out how to make money. Entrepreneurship is the art and science of buying and selling – demand and supply. Many forget that. In the startup world, thanks to Silicon Valley, many now believe its idea and raising capital. This is why, just to digress a bit, I now tend to look for founders who have at least forayed into small business entrepreneurship. These most often understand the importance of not just revenue generation, but of the need to be profitable.
Back to answering your questions. Startup52 has so far been self-funded. The great things about that is, you become more nimble in being creative at staying alive. I have leveraged partnerships to minimize costs, we are currently developing other paid programming besides the acceleration one to bring in revenue, I get paid to speak, consult, etc.
Now personally, being Nigerian means you definitely understand the hustle mentality and engaging that mentality effectively helps as well. In fact, I started Airbnb when many people in NYC didn’t even know what that was, as well as found and used other competing/similar platforms to bring in money. Thanks to my dogs, I also ended up a breeder of labradoodles, which are in high demand, and having two girls and an always-ready standard male poodle becomes a great blessing and a lot of work.
So for founders out there, don’t spend all your time trying to give away a chunk of equity in your business in the name of raising capital from investors, instead creatively focus on being profitable while mastering the art of fundraising. It becomes a double-edged sword. But for those who must, mastering the art of fundraising means relationship building with potential investors, fully understanding your craft and why it is pertinent to your market, understanding what investors are looking for, diversifying your fund-raising options, etc.
Share a few tips and advice on finding investors & funding for new start-ups?
Focus on building relationships. Investments are like marriages without the option of divorce. If an investor does not feel comfortable with you i.e. does not know you and cannot vouch for you without reservation, investment is highly unlikely. Spend time cultivating and building relationships. Cold call/email people, but do your research first to understand who they are, what they like or something about them that will get their attention. I will spend another 5 pages writing on the dos and dont’s or building investor relationship based on what I’ve experienced with founders. But most importantly, understand that not all money is good money. So do your own due diligence to figure out if this investor is right for you. Research or ask about prior investments and reach out to them. Do your research! it is very important.
I usually say there are three types of investors, the vulture investor, the philanthropic investor and the right investor. The vulture one focuses too much on ROI and profits does not care about your well-being. They don’t care what happens to you or how you thrive. All the care about is their money and thus also tend to micro-manage and/or have insisted on things being done their way. In fact, the reality is, you end up slaving away for this person. Advice? RUN. FAR. AWAY!
The philanthropic one unconsciously considers you more like a charity case. To them, giving you money is like doing charitable work, not really an investment. They’re very quiet i.e. never really reach out to see how things are going. Maybe once in a while, they may introduce you to someone they think you should meet, as long as it does not hurt their reputation, meaning you are only as good as the next nonprofit they donate to, that they may not really care about. A harsher way of saying this is your venture is really disposable to them. These investors are not always bad for business, especially if you can hustle your way through to the connections and resources you need without their help. Advice? Take the money but don’t expect much from the relationship.
The right investor is the one who understands the importance of ROI, as well as the fact that the best ROIs come from well-balanced and supported teams. They care about you first and foremost but also understand that sometimes they have to push you to get to the next level. They open up their network to provide access to others who may help you. They provide mentorship when need be, celebrates your successes with you, as well as shares in the failures. advice? Seek these out!
Starting out what the worst mistake you made as an entrepreneur, and what did you learn from it?
I think the better terminology would be one profound lesson I learned as an entrepreneur. As a leader, you must recognize early who on your team is crucial and get rid of dead weight asap. As easy as it sounds, this is very very difficult to do, especially when you are working with really close friends and/or family. Telling someone you’ve known for many years and have worked with that you have to let them go because they are not the right fit and then trying to maintain the friendship is not an easy thing to do, but MUST be done. Carrying dead weight while trying to launch something will cost you more, especially if you have little or no capital at all.
Another important lesson I learned was managing expectations, with regards to your dependence on others. My first rule is if you do not have capital, do not offer something to people that you cannot provide. In other words, make sure that whatever services you are offering are things that you can step in and do if something erratic happens. I learned this from running Re:LIFE. My co-founder and I decided to just offer only services that we both can teach/provide, instead of depending on people who may disappoint in the end. Saved us a lot and helped us protect our brand.
Did you ever have a moment where you were just, like, it’s too hard to go alone? Or a moment where you almost were just like, I’m done?
CU: So many times. In fact, most entrepreneurs go through this more times than you think. Few months after I launched Startup52, I was in court with my landlady facing possible eviction, because even though I had told her and asked about some grace period to launch it, my grace period expired before the breakthrough. So it was a really rough time juggling everything with that. That court case lasted awhile. That is just one example. I can go on.
If you could only pick one thing to validate your reason for building your startup, what would it be? In other words, what has been the single biggest indicator to you that you are doing the right thing? The privilege to fight for others, which I elaborate in the Turning Point video (include backlink for Turning Point video). When I launched Startup52, the goal was to see more people like me succeed in the space, to increase representation by creating better access to opportunities and resources for others. As I delved deeper into the benefits of diversity and inclusion, my findings further emboldened me because I then also realized that this is not just a social cause, that it is profitable. Building wealth while living out your life’s purpose of empowering others? How can you beat that?
Startup52 is successfully accelerating and investing in the NY region for some time now. Do you have any plans for Africa? Do you think Africa needs an accelerator programme like startup52?
CU: Yupp. 83% of the world’s population live in what we call emerging markets and more than 50% of the population in sub-Saharan Africa is currently under 30. To me, the next decade or two belong to Africa as the next tech frontier for innovation and now is the time to get in. Currently, Nigeria is the largest and strongest tech ecosystem in Africa. I think Kenya is the most advanced and South Africa probably has the most readily available capital, as well as the most exits, I believe. The MENA region (North Africa and the Middle East) is also emerging on the scene. I believe Dubai has its first unicorn in Careem. Thing is, we’ve had an explosion of applicants from Africa that we would love to serve. We also know that packing up and moving to NYC for 3 months is not an easy thing to do especially for people who require a visa and all. So in other to address that, we will be launching Startup52Africa starting in Nigeria in 2018.
What do African investors need to know about diversity?
CU: I have had many people say to me, well diversity is not applicable in Africa, so your investment thesis would not be relevant in Africa? This is misguided. First, you have men and women in Africa, so gender diversity is still relevant. Secondly, while only some parts of Africa deal with racial differences, we have both cultural, religious and ethnic differences which amplify the need for diversity. In fact, I believe it will work better. Now that that’s out the way, I outline the importance of diversity in this piece, which should be relevant globally.
You launched a global foundation – The Educational and Entrepreneurship Leadership Fund (EELF), with its first location in Nigeria, West Africa (EELF-A). What was your aim in doing this?
CU: I came home in 2012 and during that visit, my older brother had organized an entrepreneurship conference in Aba. We expected about two hundred people to show up. Over 1000 did, including young children. The conference culminated in a competition, which a 9-year old won. At that point, it was imperative to me to do the little I could in empowering our youth, as well as in stoking the fire and hunger they had for innovation. One of the best decisions of my life.
There is the impression that startups only have a shot at becoming global giants when they move to Silicon Valley. Do you agree with this? And can startups from Africa grow without going to the Silicon Valley?
CU: Anyone who believes or agrees with that does not understand Silicon Valley (SV) and oppressive institutional structure of US systems. SV is not designed to allow any others succeed. For instance, as progressive as it claims to be, its biggest social problem to date has been figuring out how to be inclusive of others. For instance, in this era of unicorn tech startups, the age of Facebook, how many unicorns have you seen from SV that are led by women or people of color. In fact, in 2017, I can only think of one Black tech billionaire – Robert Smith, who, if I recall, had to mask his identity as his business grew. The fact that the big tech companies still grapple with dismal diversity numbers is another indication that SV is not designed for the success of non-white male others. Their success (of others) will not come from SV but from other ecosystems that intentionally embrace others. So while I understand why people believe that SV is the place to be, diversity and inclusion is the disruptor that will either unravel SV or birth the new wave of unicorn blessings outside SV. This is why it is important not to try to mimic SV in building ecosystems but rather learn from what worked there and adapt/customize solutions appropriately.
You seem to have a lot going on at the same time: Re: LIFE Incorporated, TECH: INColors, Startup52, e.t.c. How do you pull this all off? How do manage time and what advice can you give on how to properly manage one’s time?
CU: The most important indicator of success is the right team, and that, of course, includes leadership. Your team can make or break you. Case in point Uber and its founder Travis. Once you identify the right people and let them do what they love without micro-managing, they can take you to the moon and stars. I am blessed to have great people who inspire me, challenge me, but most importantly execute swiftly, professionally and effectively.
Just for fun, If someone paid you $1 billion right now, with the condition that you could never work a day in your life again, and never start a company, would you do it? Why?
CU: First, if that money will be taxed, then no. But if not, what does ‘not work anymore’ mean. If I can invest, grow my money and do the things I love, then maybe. But if not, Nope. I’ll make much more than that grinding.
In case you think Startup52 is a good opportunity for you and your business, visit www.startup52.com for more information.
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