Accelerator And Retail Mentorship Programs: Application, Attendance And Outcomes
If there’s power in numbers, then participation in an accelerator or retail mentorship program can be powerful for beauty brand founders facing the isolation, resource and manpower limitations, and dizzying array of unknowns that often come with entrepreneurial existences. These programs gather startups together to benefit from shared lessons, careful examinations of their businesses, and the expertise of accelerator leaders and advisors. “What an accelerator does is gets you to focus on how you can do more faster and really accelerate in every sense of the word,” says Danielle Cohen-Shohet, co-founder and CEO of GlossGenius, and a veteran of Sephora Accelerate and Techstars. “Being part of that culture and community, you iterate a lot, do more faster, and cut out the ways you were wasting time.” To make sure beauty brand founders aren’t wasting time pursuing accelerator and retail mentorship initiatives, Beauty Independent chatted with about a dozen alumnae of these programs to understand what it’s like to apply to and attend them, and achieve results from the experience.
- An avalanche of accelerators and mentor programs
- As more and more corporate giants and investors attempt to harness the buzz of startups, the amount of accelerator and retail mentorship programs is ballooning. Traditionally, accelerators have been the province of the technology world. Veteran accelerators like Y Combinator, Techstars, Amplify LA and MuckerLab rule the technology accelerator field, but there are also accelerators dedicated to food (Food-X), healthcare (Health Wildcatters) and consumer goods (The Brandery and SKU). “A lot of tech accelerators don’t appreciate the value of brands and we felt like, if we were going to go with an accelerator, they had to be aligned with us and what we wanted long term,” says William Yin, co-founder of Scent Trunk, which went through The Brandery’s program in 2016. Recently, retailers and beauty companies such as Sephora, L’Oréal, Target and Walmart have jumped into the startup-fostering sphere with programs they occasionally call accelerators, although their purpose is largely vetting brands, training them for retail success and nurturing entrepreneurship. “It’s really a mentorship program,” says Karissa Bodnar, founder and CEO of Thrive Causemetics, a member of Sephora Accelerate’s inaugural cohort last year. “They are not investing in the companies. They are not taking equity. It’s really a community builder.” Technology accelerators write checks of $40,000 to $50,000 typically and regularly take equity stakes of 5% or so. The size of the accelerator and mentorship programs vary considerably. Over 500 entrepreneurs spanning several merchandise categories, including beauty, health, hardware and home décor took part in the Walmart Open Call last June. Sephora Accelerate’s 2017 class has 10 members; L’Oréal’s accelerator program with Founders Factory includes five firms this year, and around 50 companies are in Y Combinator’s recent cohorts.
- Application and acceptance
- The process to join an accelerator or retail mentorship program generally starts with an online application. Sephora Accelerate has a digital application, and the deadline to fill it out for the 2018 class is Oct. 31. The application delves into a brand’s vision, innovation, business model, social impact and merchandise. Even though there are applications, brand founders with experience in the retail programs frequently received emails inviting them to apply and didn’t initiate the application process themselves. Buyers and other employees suggest brands they believe could benefit from participation or that fit a program’s goals. The competition to get into these programs is fierce. Mary Futher, founder of Kaia Naturals and a member of this year’s Sephora Accelerate class, estimates there were 1,300 Sephora Accelerate applicants. One of eight companies in this year’s Food-X class, All Beauty Skincare Drink competed against some 600 candidates, according to founder and CEO Camille Varlet. Applicants considered for the programs endure extensive interviews. Sahajan founder Lisa Mattam was interviewed four times via Skype before she was accepted to Sephora Accelerate last year. Nathan Failla, founder of PocketGel, applied online to Walmart Open Call, and the massive retailer subsequently grilled him about his company, its products and the items that could work for Walmart or Sam’s Club before he was approved for the program. It took two rounds of interviews and about four months before Cassy Burnside, founder of Fatco, learned she was accepted to take part in Target Takeoff this year. Video components are common in the application process. Futher’s Sephora Accelerate interview process included three interviews and a video presentation. “It was very intense, but in a good way,” she says. “You certainly had an opportunity to take a deep look at your business.”
- What an accelerator or retail mentorship initiative is really like
- Traditional accelerators are lengthy programs during which participants decamp to the programs’ offices to work side-by-side with their peers. Cohen-Shohet details that Techstars is a three-month program, while the Sephora Accelerate program features a week-long bootcamp followed by a demo day six months later. “Being around the other companies in my cohort was awesome. There was so much energy there,” she says of Techstars. Sephora appoints members of Sephora Accelerate mentors that guide them during the program and after. Bodnar’s mentor, for example, is David Stutz, vice president, education and client service for Sephora inside JCPenney. Sephora brings in outside mentors as well – Pamela Baxter, co-founder of Bonafide Beauty Lab, and former president and CEO of Dior Couture has participated – to give brand founders broad views of the beauty business. “Being part of an accelerator can be valuable to get people in your corner to support you,” says Bodnar. Founders at Target Takeoff hear from executives in many areas of Target’s organization. Burnside divulges, “We had one-on-one meetings with specialists in marketing, distribution and sales. It was like speed dating with people from Target.” At the daylong Walmart Open Call, brand founders pitch their products to buyers in their categories. “You hear so much about Walmart, but actually putting faces to the name and seeing the people who make decisions was really neat,” says Ben Bower, co-founder of Stinkbug Naturals. Jon Koller, founder of Beard Balm, recalls, “I must have met 40 different people who worked at Walmart over the course of 12 hours.” The technology incubator programs confront companies’ weaknesses head-on and link them with people to assist in addressing them. “Whatever problems you have, you are able to tap into the network and get someone who’s an expert in the field,” says Yin, talking about The Brandery. At Techstars, Cohen-Shohet says goals are defined for companies to reach. “Techstars called it big rocks. What are your big rocks that you want to move or climb? Something we took away from Techstars is setting goals that can be done in a short amount of time and making sure everyone is aligned around them,” she relays. The finales of most technology accelerator programs are demo days dedicated to founders presenting their ideas to audiences of investors, business executives and media.
- Accelerator participant objectives
- Accelerator programs, particularly the traditional technology types, are geared toward seed-stage companies that are beginning to gel. These companies benefit from the tools accelerators afford because they can shift their modus operandi. Prior to her participation in Target Takeoff, Burnside considered a consumer goods accelerator program, but decided her business was mature enough to skip it. “If it had been three years ago and been super new, it might have made sense. I think if you work really hard at networking, you might be able to make the same connections using LinkedIn really well,” she says. Cohen-Shohet recommends, “You really need to know what you want to get out of accelerators when you go into them.” Varlet concurs. “You have to be realistic about what you want to achieve,” she says. “Within the 14 weeks [at Food-X], I had new packaging, a production run with the new packaging and a deck ready to pitch. All in all, I’m satisfied.” Money can definitely be a motivator. The fragrance subscription service Scentbird was in need of capital in 2014, and the $40,000 it received from Entrepreneurs Roundtable Accelerator (ERA) was a helpful boost. In 2015, Scentbird participated in Y Combinator’s accelerator program, where it refined its business model. Breaking into retailers is a priority of brands participating in retail mentorship programs, but the retailers make no guarantees that taking part will lead to presences on their shelves. “We would certainly love to be in retailers like Target at some point,” says True Moringa co-founder Emily Cunningham, who attended Target Takeoff. “We sought out mentorship on everything from scaling operations to building our digital strategy to improving products so they pop off shelves in the mass retail setting. We are now implementing suggestions.” Several Sephora Accelerate participants emphasized they strove to build relationships with their fellow founders through the program. “You meet incredible people who are very relevant to you and become part of a community where everyone gets it,” says Cohen-Shohet. “It’s helpful to be in that group of companies that Sephora identifies as awesome and interesting.”
- Results of accelerator and retail mentorship program involvement
- In a crowded beauty marketplace, accelerator and mentor programs emblazon brands with stamps of approvals from movers and shakers in retail and technology. “There is inherent validation from Sephora choosing you,” notes Mattam. Involvement in these programs has also changed companies in fundamental ways. During their participation in Y Combinator, the founders of Scentbird were pondering whether to abandon fragrance in favor of skincare or cosmetics. Michael Siebel, CEO of Y Combinator’s accelerator program, advised them to stick with fragrance, and they switched from a Warby Parker-like concept to a subscription service with monthly supplies of scents. Scent Trunk’s accelerator experience was similarly transformative. “We are literally 180 degrees different besides the fact that we still sell fragrances, but not every company is going to look different when they come out,” says Yin. Mattam’s Sephora Accelerator journey didn’t spark a major change in her brand. However, it prodded her to revisit its positioning and create a new tagline: “The science of intuition.” The connections that accelerators provide brand founders can be important. Yin doesn’t believe Scent Trunk would have had Procter & Gamble as a client if it weren’t for The Brandery. Burnside offers, “It’s all about who you meet and how well you stay connected to those people after the program is done.” Securing money and board members are possible outcomes of these programs. Sephora will loan Sephora Accelerate participants money to fuel growth. The retailer loaned the brand Kreyol Essence $50,000 to ramp up for distribution at Whole Foods. Scentbird raised $100,000 shortly after its stint at ERA – it’s amassed much more since – directly due to its time there, and Y Combinator’s Siebel is an investor in the company. Cohen-Shohet says, “In tech, it is very common for companies to come out of accelerators and move right into fundraising accelerators get them thinking about the things investors want them to focus on.” No matter the immediate consequence, participation in an accelerator or retailer mentorship program doesn’t necessarily equal continued company success. “It’s not like all the companies that go through an accelerator come out with fairytale endings,” says Cohen-Shohet. “In fact, the majority break up or fail, and that’s the model. You accelerate and, if you are going to fail, you fail fast.”