While I believe in a less government-driven economy, it’s good to see smart initiatives coming from this world also in Budapest, that truly supports the local ecosystem.
What is Design Terminál’s Techlab? And what is Design Terminál?
Design Terminal is a government backed agency responsible for improving the entrepreneurial scene in Budapest. Besides organising and hosting dozens of events every month, running conferences and gathering the community, we have an increasing focus on business incubation. To that end, we have expanded our non-equity accelerator program to be 6 months long, and it is now open for tech startups, designer brands and smartcity projects as well. Techlab is one of the three tracks in our accelerator program that is designed to guide idea and prototype phase tech startups towards Product Market FIt. We provide quality mentorship, office space, a living stipend and other sweet perks.
What makes this initiative unique?
Apart from not asking for equity, being open for even idea stage projects and offering a world-class mentor pool, we believe that our program is unique because it has a strong cross-disciplinary emphasis from its close relationship to the other two tracks: Designlab for product, fashion designers and Citylab for smartcity projects. We believe that diversity is conducive to innovation and creativity so we encourage synergies and peer-to-peer learning between our chosen verticals.
What is your goal with this project?
Our goal is to help our teams get accepted to top-tier accelerators and/or raise a seed round by the end of our program. We’ve noticed a trend recently that angels, accelerators and seed investors have shifted towards investing in more mature, less risky companies. This leaves a big gap in the fragile, super early stage space. Design Terminal aims to fill this gap. Our program gives entrepreneurs the skills and foundation they need to test their ideas and assumptions. By the end of the program, our teams will have learned and validated essential information about their market. Armed with this knowledge, they will be well-positioned to execute and leverage the full potential of an accelerator or a seed round. We channel these well-trained, non-diluted companies to our accelerator and investor partners. Our primary KPIs are the acceptance rate to accelerators and the total $ value invested in our startups.
How do you select the lucky ones? What’s the criteria?
The selection process is pretty simple. Our online application form is open until Nov 11. We involve our mentors to help us rate the applicants, resulting in a shortlist of teams who we will interview. After the interview phase, we will invite the 15 most promising teams to our Selection Camp, a 3-day-long bootcamp from Dec 3-5. After we’ve seen the teams in action, we will select the 5-7 companies to join the first batch of Techlab. Regarding the criteria, teams can apply with projects between idea and Product-Market Fit phase, so they don’t have to have a working prototype, not even a legal entity to be eligible. We are looking for highly committed teams with complementary skill sets. Industry-wise, we have a pretty broad focus, but we are mainly interested in highly scalable software and mobile projects targeting large international markets and solving huge problems.
Where are you expecting startups to apply from (geographically)?
For the first batch, we are promoting the program mainly in Hungary, but we are open to startups from anywhere in the world, as long as they are willing to relocate to Budapest. Eventually we plan to expand to a regional focus; we run the program and communicate in English so it is by default designed to be able to take international teams.
So you don’t take equity. Then why are you doing it?
For karma. As a gov backed agency we don’t intend to generate profit, but to create value and foster a healthy ecosystem. As mentioned before, we strongly believe that early stage startups play a crucial role in startup ecosystems. As the barrier to entry is getting lower accelerators and VCs move more and more to a de-risked ‘product & traction required’ phase which creates a huge void in the very crucial early stage. We aim to solve this problem by getting startups ready for VCs and accelerators.
I see very prestigious names amongst the mentors. What is their actual contribution? How will they help the selected startups?
We are extremely proud of our amazing mentor pool that consists of more than 60 world class experts… and the list is growing. We have investors, product, UX, tech and biz people from companies like Cloudera, Prezi, Ustream, 500 Startups, Skyscanner and more. Their contribution is pretty varied, some of them are really busy and can commit only monthly 1-2 hour online office hours from the US, however all are excited to be part of the program and many will be offering workshops and doing hands on work with the teams.
How do you see the output of the program? What is your long term goal / vision with this program?
Our dream is to see some of our startups land into the best accelerators such as Y Combinator, Techstars or 500 Startups after graduating from our program. We also want to foster a culture of knowledge transfer that has made places like Silicon Valley so strong – as we produce and nurture more startups, we hope that the founders will become future mentors in our program and share their experiences with the local community.