Applications for MassChallenge’s flagship accelerator program in Boston are fast approaching (March 31st), so I spoke with Scott Bailey, Managing Director for the Boston program, about MassChallenge’s mission, history, and vision for the future.
MassChallenge was started in 2010 by Akhil Nigam and John Harthorne, who had a vision of catalyzing a global startup renaissance to re-establish the entrepreneur as a critical piece of the value chain. They wanted to create a society that was focused on value creation, not value capture. MassChallenge’s name comes from the idea that doing this is not only a massive challenge, but also results in a mass movement towards this idea of value creation.
The four-month accelerator is the most startup-friendly program on the planet. The nonprofit takes no equity and is truly open to all companies with any legal structure, in any industry, from any part of the world, and provides startups with the access and resources they need to succeed, from free office space to mentoring, workshops, and access to its global network. Each cohort is comprised of 128 startup companies, so the organization is truly looking to provide its services at scale. The accelerator culminates in a competition to identify finalists who compete for the grand prize of $1 million in non-dilutive grants, which is awarded across the top 10-20 companies.
Scott joined MassChallenge as a volunteer in 2010 and worked his way up to oversee the flagship Boston program, where he currently serves as Managing Director. Since he started, he has seen MassChallenge grow beyond fostering companies in Boston: the organization now operates in 12 cities and five countries around the world, including the UK, Switzerland, Israel, and Mexico, and they are aiming to expand to another three countries next year. In terms of diversity, last year, 44% of the companies were founded by women or had a woman co-founder, and almost 30% of the class was international. A lot of their growth has been through word-of-mouth, when alumni return to their home countries and tell their friends about the program. We also discussed the diversity of industries: because MassChallenge does not take equity, they tend to see a broad range of companies from energy, pharma, medical devices, and even nonprofits who have the potential to have a really big impact, but may not have a return for traditional investors.
When I asked about MassChallenge’s comparative advantage over other accelerators, Scott immediately said no equity and scale. MassChallenge is the only program that takes such a significant number of companies at one time without taking any equity. In addition, the strategic value of and connection to the Boston community is massive – they have significant corporate backing and access to some of the top Fortune 100 companies who may want to invest in or become customers of the startups. In addition, MassChallenge truly has global access – if you go through Boston, you have access to investors all around the world.
We also chatted about the unique challenges that face startup social enterprises. Mentorship is a critical need, because many people have the passion for their cause but they need to build their network. MassChallenge mentors have been able to connect these organizations to key resources such as capital and technology, and participating in a program with for-profits accelerates the nonprofits’ considerations on their business model and ability to scale. In addition, there is a huge amount of exposure you get both publicly from a PR and marketing perspective and with other enterprises in the form of peer mentorship. One MassChallenge alumnus and current Impact Hub Boston member, David Delmar of Resilient Coders, which teaches young people from traditionally underserved communities how to code, connected via MassChallenge with the Mayor’s office to run their first code camp. David said he just needed people to care, and through MassChallenge he was able to make the necessary connections to obtain both funding and support.
Finally, we talked about current trends in entrepreneurship in Boston that have him excited about the city’s future. Scott discussed the uptick in hardware and robotics applications over the previous year, which is really exciting, and the program is launching a digital health program in the near future. With respect to digital health specifically, there are so many resources in the city geared towards health that there is the opportunity to create a meaningful cluster of digital health startups here. In addition, he’s seen growth in social impact companies, which now represent about 20% of the overall class. He thinks Boston has a very giving type of community, with respect to both time and money. People want Boston to be a world class city, and that takes philanthropy, the private sector, government, and organizations like MassChallenge that foster a welcoming, open, and collaborative environment.
At the end, I asked Scott for any advice for entrepreneurs who want to apply to MassChallenge this round, as applications are due March 31st. In general, he suggested focusing on impact over equity: “Make sure you’re building a business for scale in a way that will create impact and help a lot of people, and MassChallenge will do everything humanly possible to help you reach those goals.” Other than that, get your applications in and use his discount code for the application fee, scottbtv!