The Accelerator Series is a multi-part spotlight on Canada’s startup accelerators and the people who lead them.
Marcus Daniels and Extreme Startups Want the Best Founders in Canada- And the Best Program in the World
Ever since he took over as Extreme Startups’ Managing Director, Marcus Daniels has been a man on a mission. I found him to be an easy-going guy when we first met few months ago, but on the phone he was all business.
It’s been four cohorts since Extreme Startups launched, the most recent being Daniels’ first as leader. That was in October, when he implemented major structural changes to the well-known accelerator program. Prior to that it had experienced relative success.
The status quo didn’t cut it for him. “We’ve had a pretty good track record but quite frankly its not good enough,” said Daniels. “The reality is that until the best founders in Canada are cramming the doors to get into our program over bigger US programs, we’re not satisfied.”
The Montreal-born entrepreneur took over the program about five months ago as outgoing co-directors Sunil Sharma and Andy Yang pursed new paths. Immediately he addressed what he saw was a maturity issue: too many teams may have had big ideas with big talent, but they weren’t necessarily venture-ready.
That’s when he changed the program into a three-pronged approach. Today Extreme Startups’ main program is a venture-ready, mature “Advanced Track” cohort of four to six startups, along with a “Founder’s Academy” pilot project. There, up to 20 less experience “farm team” startups with big ideas can gain office space and essentially compete to get into future cohorts. The third prong is the “Venture Advisory” stream, or companies that may have already graduated from other programs, but are still eligible to get into Extreme Startups.
The later two streams- Founder’s Academy and Venture Advisory- are about creating competition within Extreme Startups’ headquarters. Daniels said he wants to make the Queen street location into a kind of Hacker House like Vancouver’s Launch Academy or Montreal’s Notman House.
The biggest change comes in the four to six startups entering the Advanced Track. They must have their product built and in market upon entering the program. In their first week they’re thrown into a “Showcase”, forced to give their first legitimate investor pitch. In October for the fourth cohort it was in New York City, while the program’s fifth cohort will kick off with its showcase at the DX3 2014 Conference on March 5.
For Daniels, it’s about “throwing them into the fire.” The teams get started right away on business development while Extreme management can see what challenges lay ahead for each. It’s only a three-month program and time seems to be of the essence for the Extreme braintrust, which includes entrepreneurial investment banker Lauren Robinson.
The question is whether all the changes will prove to have lasting, successful outcomes for Extreme. Daniels admitted that the transition from the old leadership team “wasn’t exactly flawless”. There may have been questions about its future, particularly when Extreme Venture Partners, just one of many institutional investors in the program, went out of business.
His benchmark for these teams’ success will be whether they can raise institutional capital after 12 months, or the elusive “series A” round that often differentiates the mature from the “has potential”. There’s over 1600 accelerators and incubators listed on AngelList, Daniels pointed out, and the vast majority of them don’t produce fundable companies. “I’ve been a digital entrepreneur for 24 years, so I’ve always looked at what the ingredients are that we need to implement into the program to get these companies fundable,” he said.
He knew what needed to change upon taking power, and he treats Extreme Startups like his own venture. A venture, he reminded me, without government funding (which may or may not have been a shot at some of Canada’s publicly-funded accelerators).
Among Extreme’s strongest examples of teams to have went through the program are Sciencescape, SqueezeCMM and Picatic.
Sciencescape, a social tool for academics, researchers and students discovering and organizing academic journal articles and research, recently raised an “oversubscribed” $3 million seed round.
Content marketing platform SqueezeCMM meanwhile participated in the program’s most recent cohort. Daniels personally convinced its founder to join Extreme after she had already led a Profit 50 company and a highly successful agency. Daniels called it a perfect example of Extreme’s desire to find strong technical founders and “supercharge” founder and product development.
Picatic participated in the program’s second cohort and was recently featured in the Day Job documentary, having had stints in both Silicon Valley and New York City. In an extremely crowded ticketing space, Daniels felt the startup did a “phenomenal job” in both the program and after when it raised $750,000 in August.
And how could one forget just two weeks ago when Shoplocket, a team from the program’s inaugural cohort in spring 2012, was acquired by PCH International.
The program’s beginnings offer a fair prediction of where the accelerator wants to go. It was originally founded in 2009 as “Extreme U,” an incubation program lead by the founders of mobile development agency Xtreme Labs (which was acquired by Pivitol in October for $65 million). Eventually it morphed into its current state in 2012 when several of Canada’s institutional investors came together to fund what would be a major accelerator in Canada, including Rho Canada Ventures, Relay Ventures, the BDC, EVP and OMERS Ventures.
Daniels said the program wants to become a “mobile centre of excellence,” one that’s “the best place on the planet to build big ideas on mobile platforms.” It would make Extreme Startups a global player, something Daniels has already built foundations for with his strong connections to New York City (October’s showcase was held there).
He’s serious about a constantly evolving accelerator program and he’s serious about the level of excellence the startups, mentors and results show.
“We want to be the best at something in the world. And we’re not benchmarking ourselves against just Canadian accelerators; if all the top accelerators [in the world] have that level of ambition, it will be better for the ecosystem.”
Have you check out the rest of the series?
Part One: Hyperdrive (published January 13)
Part Two: GrowLab (January 20)