Stephen Plumlee, Managing Partner of R/GA Ventures
Financial Capital Is Now a Commodity
Many accelerator programs are designed to help early stage startups test their products’ market fit and produce a minimum viable product quickly. This is the primary reason for the cash investment, whatever the amount. However, most young companies need more than just quick cash, mentor speed-dating, and a place to work every day.
R/GA Ventures recognized that startups need the capabilities that we as a digital agency bring to the table. We leverage our global talent pool, creative capital, and ability to bring Fortune 500 clients into the mix, and our client relationship capital to ensure that our startups have the tools for long-term success when they go to market.
Venture as a Service
Our model is similar to the format established by traditional accelerators, offering temporary workspace, financial capital, and mentorship. But the similarities end there.
Even before our programs begin, we work with each startup to assess its priorities. We then form purpose-built teams around each startup to address their unique needs. These services can include any of the skills found within R/GA, from brand and identity development, go-to-market strategy, UX/UI, visual design, tech development, research and analytics, to data science and visualization, prototype support, and industrial design. This hands-on approach – “venture as a service” – is where early-stage investing is headed, led by top-tier firms such as Andreessen and First Round. However, at R/GA Ventures we have taken it a step further by working directly with startups, helping them to evolve and build their products and services, create a brand, and position themselves in the market.
Building a Brand, Not Just a Product
Most early stage startups are focused on building out their initial product or service, and most accelerators–especially hardware-oriented programs–are geared to this. When assessing applicants for our programs, whether early-stage startups or more established ones at the Series A or B level, we look for founders who grasp the importance of user experience and brand proposition and are able to incorporate that thinking into what they are building in the moment.
Succeeding in this landscape requires long-term thinking and a vested interest in more than a startup’s minimum viable product. Instead of focusing solely on getting to a working prototype, startups in R/GA Accelerator programs are taught to think deeply about the user experience behind their product or service, and how this relates to the brand proposition of their company over time. Our experience enables us to help answer these questions, establish a viable value proposition, and build a brand that will deliver more value to the startups, their investors, and their customers over the long term.
Achieving Strategic Objectives
Unlike “pure” accelerators that are primarily interested in financial returns for themselves, we are motivated by strategic objectives, giving us flexibility in both the startups we select and the terms we offer. Our ability to offer terms that match the circumstances of the startup and provide access to our creative capital, enables the R/GA Accelerator to engage with startups at any stage in their trajectory, from Pre-Seed, to Seed, to Series A, to Series B and beyond.
In addition, when considering a program, we begin by working with a corporate partner that is strategically aligned with our vision and a program theme (e.g., IoT, Connected Devices, Sports Tech, etc.). This foundational approach ensures that the interests of R/GA, the corporate partner, and the startups admitted to the program are all aligned.
Outcomes that Attract Innovation
The results to date have been impressive. Companies that go through our program raise twice the average of other accelerator graduates. The majority of our participants have also exceeded their initial raise targets, and are now successfully raising A and B rounds at increasing valuations. Along with the startups, our partners also receive a significant amount of exposure to the innovation ecosystem (the program has received 1.9 billion media impressions thus far) and gain the opportunity to see what’s coming down the pipeline with the potential to disrupt their industry.
Like our clients and partners, we also benefit from working with startups. By working in the lean and nimble style that startups require, we have learned to work more efficiently bringing more day-to-day value to our clients. And because we see hundreds of applicants, we are able to understand where there are opportunities for disruption and can quickly bring these insights to our clients. The accelerator also creates new relationships with innovators and opportunities for partnerships, acquisitions, or business deals with our clients. We believe these types of programs are core to the future of agencies and corporations, and critical to driving innovation for our clients and ourselves.
Our goal for R/GA Ventures will remain the same: to create value for our startups, investors, and corporate partners, by leveraging our “venture as a service” approach and best-in-class resources to support the innovation ecosystem globally.
To do that we’re scaling up and going global with a number accelerator programs scheduled to be hosted in the U.S., Europe, South America, and Asia in 2016. At the same time, we plan to innovate on the accelerator format itself. The R/GA Accelerator will introduce longer-duration studio models, programs and services tailored to later-stage startups, an increased focus on female founders, and increasingly competitive and flexible financial terms for startups and their founders.