AlphaLab alum Nathan Speller mentors current AL companies about their businesses.
By Matt Pross, Staff Writer
As part of the TEQ Startup Project (TSP), the folks over at AlphaLab have granted us pretty much unrestricted access to the current cycle of startups participating in the South Side-based incubator program. Over the past few weeks, it has been great hanging out at the AlpahLab offices getting to know the companies and learn about what each hopes to accomplish by the end of the incubator cycle in mid May.
One aspect of the program that is very useful and, I’m sure, sometimes eye opening for the AlphaLab companies is Office Hours. AlphaLab Office Hours basically consist of an Innovation Works employee or an AlphaLab alumni meeting with each company one-on-one to discuss their product, proposed market and value proposition. These sessions are incredibly valuable to the entrepreneurs in AlphaLab because it forces them to answer the hard questions that investors will inevitably ask come Demo Day in late May.
Recently, I sat in on an office hour session with Nathan Speller, the founder and CEO of 8020Select and designly.com. Nathan participated in AlphaLab’s seventh cycle with 8020Select and has been mentoring subsequent AlphaLab companies since.
“I do these office hours because it pains me when I meet a company and see that they are missing something so obvious,” he said during one of the meetings. “I want to share my past experiences from AlphaLab to provide insight to other startups.”
Just recently, Speller and two colleagues won Hackathon in San Francisco, netting the development team $100,000. Click here to launch a YouTube video.
During the 30-minute session with each company, Speller asks the tough questions that every entrepreneur needs to know the answers to before they will be able to attract follow-on funding.
“Where do you want to be by Demo Day? How many paying customers will you have by that time? These are the types of questions investors are asking themselves when considering a company to invest in,” Speller explained.
“They gauge their risk versus the potential reward,” he continued. “If the company in question is targeting an enormous market, then investors will be more likely to take a greater risk because the potential payback is greater. On the other hand, if a company’s target market is relatively small, investors are going to look primarily for paying customers as market validation of the product. You can’t really say your company has value unless people are paying to use your service or technology.”
After sitting in on two sessions with Speller, I was starting to understand the types of obstacles that stand between turning a great idea into a profitable reality. This is the main challenge that every startup company faces on its journey toward commercialization. Only a small proportion will garner successful results when all is said and done, but local incubators like AlphaLab and seasoned mentors like Nathan Speller provide startups with the knowledge and advice that creates successful companies.