Entrepreneur and investor Chris DeVore had an inside view of Techstars Seattle as one of the original leaders of the local startup accelerator in 2010, before serving as its managing director from 2014 to 2019.
His Feb. 21 post “What went wrong at Techstars,” looked closely at the broader organization’s evolution — including its increased focus on corporate sponsorships and shift to centralized fundraising — as the backdrop for the news last week that Techstars is closing its Seattle accelerator as part of a larger reset also impacting the original Techstars accelerator in Boulder, Colo.
So where should Seattle go from here? And what role do startup accelerators serve in the age of AI and remote work?
Devore, the founding managing director of the Founders Co-op venture fund, joins us on this bonus episode of the GeekWire Podcast to share his thoughts about what happened, and his optimism about what’s next. “I think Seattle is setting itself up for a great moment in its entrepreneurial journey,” he says.
Listen below, or subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen. Continue reading for highlights, edited for clarity and length.
The ingredients for startup success: The original promise of both Techstars and Y Combinator was such a powerful new idea at the time. It used to be that to start a startup, you needed to raise millions of dollars in venture capital and have a big team. And because of the collapse in the cost of starting startups, because of open source software and cloud infrastructure, there was this moment when all of a sudden people realized, “Hey, it takes a lot less money to start things.”
The limiting reagent in startup success is just extraordinarily talented people. Talented, ambitious people who want to make a difference in the world. And if you can get those people together, and provide them just a little bit of resource, but lots of support and mentorship, they can create magical things.
The ‘give first’ approach: Techstars created this ethos they called “give first,” which is like, “Hey, this isn’t about the money at the outset.” Sure, we’re all investors and we’re in this to try to make things work. There was a real sense of collaboration and community support of ambitious young founders who wanted to make a difference in the world, and the community coming together to help them.
I admit, I’m sort of nostalgic for that moment. That moment came and went with the zero interest rate bubble and the boom and collapse that’s come since. It’s taken 10 years for it all to play out. But there was a golden moment in startup formation that was really a joyful time to be a part of the work.
The broader evolution of Techstars: Our investment firm is called Founders Co-op for a reason. We as a partnership believe deeply in the unreasonable commitment of founders to make a difference in the world. That is really the animated spirit of creating companies. And that’s not typically done in partnership with corporates. It’s saying, “Look, there’s got to be a new way of doing things.”
I think it’s very hard to hold the two ideas at the same time, which is, I’m going to serve the needs of corporates that pay my bills and I’m going to support the needs of founders that want to just pursue the opportunity that they’re pursuing. Trying to stitch those two communities of interest together is essentially a recipe for failure. And that’s the choice that Techstars unfortunately made.
Addressing the reaction to his post: I didn’t intend to attack Techstars. … I have been mourning the death of Techstars for years. I didn’t feel at liberty to say anything because I wanted to be supportive of the program in Seattle and the leadership in Seattle that was trying to carry forward, I think with good intent, all the ideas that we started it with, even as the organization drifted away from its principles.
But not only when Techstars canceled the Seattle program but when they sort of threw the Seattle market under the bus and said, “Oh, well, Seattle’s not important enough for us anymore,” I was like, “Come on you guys, that’s not being honest with us or the rest of the world about what’s really happening. And if you’re not going to be honest, I’m going to do it for you. Not in a mean-spirited way, but in a genuine spirit of honest feedback about where I think you made mistakes.” But again, it clearly made them mad, and I’m sorry I made them mad, but I didn’t feel like I needed to sit on my feelings any longer.
What if someone were starting an accelerator from scratch today? You have to examine everything from first principles, but I think a lot of the conditions that necessitated the creation of a Y Combinator or a Techstars are still true. Particularly with AI, it’s extraordinary how much product a small, lean, lightly funded team can create because of not just open source and cloud infrastructure, which are the unlocks of the first wave, but now you’ve got AI assistance for coding so that even small teams can generate a lot more product.
Where can Seattle’s startup community go from here? At the pre-seed and seed stage market, there’s plenty of wealth in the Northwest to do the work from a capital standpoint. And the same thing is true from a community sense. We don’t need a Techstars or a Y Combinator. There are extraordinary people here, founders, executives, leaders who’ve lived through the startup journey from inception through high growth and success that have a spirit of community and giving back and essentially mentoring other people.
We don’t need to look outside Seattle. We just need to create a framework and a fabric that allows those people to engage in the work in a high quality, high performing way that treats their time and know-how with respect, and also gives them a curated set of companies so that lots of people want to be entrepreneurs.
I think we’ll find, over the next weeks and months, that the community comes together to create another local homegrown version that’s not Techstars in any way, it’s its own thing, but it takes that same spirit of extraordinary founders, high quality curation, and a fabric or a framework that allows people to engage and support those founders in the right way for their stage of performance.
Does an accelerator need a physical location nowadays? Organizations are human constructs. They don’t float in the ether. It takes human leadership, human agency, human collaboration and trust and all those things to get an idea to be instantiated as an organization that builds and sells and delivers for customers. … I think that starting companies begins with humans who look each other in the eye, and that tends to be in the same physical space.
“Founders are people of extraordinary ability and commitment, and much of the good in the world happens from people who are willing to buck the trend.”
Chris DeVore
Insights from the Techstars class of 2011, and what its success says about the current economic backdrop: Those founders were starting to think about starting something right at the depths of the global financial crisis. And so the kind of people who are willing to take that kind of risk, against the insurmountable odds of being an entrepreneur, tend to be really gritty, determined founders.
One of the things that has been dispiriting about the last decade or so is, with zero interest rate policies and easy money as a way to get us through the financial crisis, and then through COVID, it started to look easy. Being an entrepreneur started to look easy, and raising money seemed easy and there were all these great stories about unicorns and it tends to bring out less committed, more mercenary and less missionary founders.
What’s next? One of the things I’m frankly excited about the current economic cycle is, a lot of the air has come out of that balloon and I think we’re actually poised for a really exciting renaissance or a moment of excellence like we saw back then not only in Seattle, but in the global ecosystem. These resets are hard and uncomfortable. People lose their jobs. I don’t want to make light of any of that, but I really think it was less about the magic of Techstars Seattle than it was the business cycle and the kind of founders that are willing to take that kind of risk when things are hard.
Founders are people of extraordinary ability and commitment, and much of the good in the world happens from people who are willing to buck the trend. It’s joyful work to support them. I think Seattle is setting itself up for a great moment in its entrepreneurial journey. … I’m feeling very excited for our fund and for Seattle and for all of us who do what we do to support entrepreneurs in Seattle. I think it’s going to be a really exciting couple of years ahead of us.
Related content
- David Cohen: Techstars is evolving and growing
- Techstars: Techstars 2.0: Supercharging Founder Success
- Chris DeVore: What went wrong at Techstars
- GeekWire: Techstars Seattle is shutting down as accelerator shifts focus to cities with more VC activity
- Marcelo Calbucci: The most successful accelerator cohort ever: How this Techstars Seattle class produced 3 unicorns
