I recently had the very cool opportunity to be part of two startup pitch days for the SAP.iO Foundry accelerator program. Both the San Francisco Foundry and Munich Foundry are kicking off new fall cohorts focused on Customer Experience and as part of the selection process I got to hear pitches from 28 different startups targeting compelling problems within the Sales, Service, Marketing and Commerce domains.
They were long days, but exhilarating ones. The passion and conviction startup founders bring when pitching their companies can be infectious.
The prospective startups had exactly five minutes to pitch followed by 15 minutes of Q&A. After they left the room, then the debate began! The selection committee, which was a cross-section of executives from SAP, SAP’s customers, systems integrators and VCs, had a difficult yet ultimately rewarding task. The goal was to pick the 8 companies for each foundry that would then join the 13 week acceleration program starting at the end of August. We were asked to rank the various companies on several criteria: Relevance to SAP, Strength of Team, Team Diversity, Strength of Product, and Market Potential. And lastly there was one final criteria: “Would you be willing to work with this company or introduce them to a client?” which provided a final, simple gut check.
There was a lot interest in the program: each foundry received over 200 applications and that meant that the companies that came to the pitch day were all interesting. (I also had the chance to spend time with many of the companies ahead of time and get in depth demos.)
Occasionally a company would be very strong in one area but need more development in another. For example, one company had a very strong team of technical founders, all PhDs and university professors. However, it seemed to us they had yet to find a compelling solution to apply their technology and research to. Another was headed by a charismatic and dynamic sales leader, but there we thought there was still some work to be done to build out a completely robust product that solved the problem they were attacking.
It was interesting to go through the same process in both Europe and Silicon Valley and see the patterns and commonality. No surprise to see that most of the ideas being pursued in Silicon Valley are also being explored in Europe, or to see that often times the Silicon Valley startups had a bit of a head start. But the two geographies are closer and more in sync than I might have thought.
One innovative idea I hadn’t personally come across before though came from the French startup Dotaki. Dotaki can determine the “personality” of an anonymous online shopper based on a set of several thousand data points it gathers from the shopper’s actions. Some people make purchase decisions more “rationally” and others purchase more on emotion. And Dotaki has found that when optimizing a commerce site, a change that improves conversion rates for the rational buying group can often decrease the conversion rates for the emotional buying group and vice versa, so that in a standard A/B test those two groups would cancel each other out. But Dotaki claims to be able to determine within 30 seconds of an anonymous user hitting a commerce site which personality category they belong to, so that the site can then be better optimized for them. This fits well with the approach of SAP Commerce Context Driven Services, which allows Commerce Sites to dynamically respond to the profile being built up by an anonymous user browsing and shopping habits. What are these data points? They range from things like device and browser type to data points gleaned from observing the user’s interaction style, how fast do they browse, how fast do they move their mouse around, and so on.
Another lively discussion centered around a company that has created technology to automatically convert existing, non-responsive commerce websites to sites more optimized for mobile. More and more visitors to commerce sites are coming from mobile devices, yet if the mobile site is not responsive, the conversion rate is a lot lower than it could be. Therefore, a possible quick win for any retailers with a non-responsive commerce site would be to leverage this technology to get a quick boost to their conversion rate. So, with such an obvious benefit for some customers, why did the committee feel that it wasn’t the best choice for the Foundry? Simply put, the committee was concerned that while the startup was targeting a very real pain point, that pain point would eventually go away as businesses upgraded and improved their web stores. So while there might be revenue short-term for this company, the long-term future was much less clear.
A bit of info about the SAP.iO Foundries: There are foundry accelerators in 8 different cities around the globe: San Francisco, New York, Berlin, Munich, Tel Aviv, Tokyo and Singapore. Unlike some accelerators, it’s a no equity program, meaning there’s no cost for a startup to participate. The value for SAP is a strategic one, we are investing in relationships with companies that may one day become future stars. The startups are in residence at the SAP.iO office for 13 weeks during which time they will receive mentoring from SAP leaders and subject matter experts on a wide range of enterprise software, ranging from pricing and licensing to sales motions to integration options. And they get exposed to the many different SAP customers who will visit them in person during the program.
The program kicks off in a couple of weeks – I’m looking forward to it!