Eric Mathews‘s honesty about what it took to build his own organization, early-stage startup accelerator Start Co., makes him the right fit to lead a program that helps founders build a raw idea into a viable company. Mathews had been an early-stage investor for a little over a decade when he founded Start Co. in 2011 with co-founder Andre Fowlkes.
“The first five years had failure, false starts, scar tissue, experiments, and hints of success,” says CEO Mathews, who also worked at the FedEx Institute of Technology leading a corporate R&D team. Fowlkes had been living and working in New York and San Francisco, and moved back to Memphis “to make an impact,” according to Matthews.
The Memphis, TN-based non-profit organization combines investment capital assistance and development with three focused track accelerators — home services, edtech and female founders — to walk potential entrepreneurs through what Mathews calls, “the startup valley of death.” The team also taps into the community by hosting smaller bootcamps, helping entrepreneurs get feedback on their ideas and if needed, helping them prepare applications to the accelerator programs.
Mathews has prioritized diversity, especially as the program attracts founders from all over the world including Ireland, Slovenia and more. 40 percent of founders in the accelerator programs are minorities and 40 percent are women. “Memphis is a majority/minority city and women have been underrepresented in these technology fields, so that’s something that we’ve focused on deliberately early on,” he says.
Mathews shares more on how Start Co. is helping Memphis and its participating startups grow, and the key lessons he always make sure he passes on to startup founders.
Start Co. focuses on specific verticals for its accelerators. Why does this benefit the founders?
Here in Memphis, we focus on industry strengths and verticals that we can be the best in the world at. They’re mentorship driven in nature. People get what I call the three M’s: money, mentorship and a Marine-style bootcamp, where we cram 12 months of entrepreneurship into three, very high-touch business and technical assistance months. We focus on four regional industries of strength: Home Services, Medical Device, Supply Chain and Logistics, and Ag Technology and Innovation.
Our portfolio management zone is great at getting you to the series A metrics that venture capitalists are looking for. We’ll have to work with our teams for several months to maybe a couple of years to help make sure that they actually get through those milestones. We can get people from “I’m not sure if I should be an entrepreneur,” all the way through to having a business with $1 million in revenue and be in a position to raise significant capital off the coasts to support their businesses.
I tell our founders all the time that entrepreneurship is the art of subtraction and not addition. And so by us narrowing our focus, and subtracting down, that focus has brought us more resources, not less — especially capital.
One of your main verticals is AgTech. How are you making connections between farmers and startup founders?
We’re partners at AgLaunch and have a program for agricultural technology. Memphis, being in the Mississippi Delta, is a powerhouse in the agricultural economy, with all five major row crops grown here as well as animal husbandry. We have 100,000 acres of farm land from a farmer network that is willing to test new products and services out. The state of Tennessee offers a fund to actually pay for those prototypes, so the farmers don’t have to risk that much to support these prototypes.
On the logistics side, Memphis has the four R’s — road, river, rail and runway that all intersect here. On the road side we have the busiest east-west, north-south interception with I-40 and I-55. We can reach 66 percent of the U.S. population within one day’s drive from Memphis. FedEx’s headquarters are also here.
You’ve interacted with hundreds of startup founders over the last decade. What are some key lessons you always pass along to them as they begin their journey?
The number-one cause of failure is building something nobody wants. We now encourage all our teams to stop building, stop inventing, and go talk to 50 customers. We can tell very quickly, within the first few weeks of our work together, whether or not a team will be successful based solely on their willingness to go out and talk to customers and hear that their baby is ugly. To face some rejection, to get some feedback and to understand that what they’re working on is not quite going to work or may not work at all.
It’s also a hard exercise because most people don’t know 50 of their own customers. It’s a good test of their tenacity and their willingness to get out there and meaningfully digest that feedback into changing their business for the better.
I definitely emphasize to make sure that everybody’s going in the same direction. Your key employees, your accounting team, your board of directors, your shareholders, investors, etc., because if you’re not all going in the same direction, you can end up ripping your startup apart. By making sure you understand and define your cultural norms and values, your core purpose, you have a strategy that we’re all collectively working on.
How is Memphis evolving and growing as a technology hub?
Memphis is a very humble and authentic place in nature and that creates a very accessible business culture. If people need to meet the CEO of a major company here, they can get that meeting. This goes back to the founding nature of Memphis as a major port where people would have to transact after knowing them only after a couple of hours or days. I think that business culture is one of our key advantages.
There’s two areas that we’re helping grow in the Memphis community specifically — social impact and minority business growth. With our Sky High program that focuses on social impact, we look into how we can actually change the pathway to college for underserved/underrepresented populations. We’re not building charities, we’re building businesses. The other area is minority business growth and helping minority businesses scale to get more businesses, more revenue to their bottom lines, which helps grow wealth and economic opportunity in our community.
You can really feel the history and the gravity of being here and that, in getting to know us during [our] interview process, gives founders further faith that this is the right place for them to be.
Interview has been condensed for clarity