NETWORKS AND SPEED FOR STARTUPS

Hatch, an accelerator that launched recently, aims to play the crucial role in the startup ecosystem of connecting investors with the teams and ideas that are most likely to succeed

IN JANUARY 2019,  a co-working facility that is also a startup accelerator called Hatch was offi ially launched in a characterful colonial building in Colombo’s Fort area. Its founders, Jeevan Gnanam and Nathan Sivagananathan, say they aim to create an ecosystem that can bring startups up to speed quickly and provide accesses to a network of contacts.

Providing what young tech entrepreneurs lack the most – mentorship from experienced leaders and access to networks with plenty of ideas, and the opportunity to deploy their products and acquire scale – has proven to be a winning business model for accelerators like Y Combinator in the US and many others. Hatch aims to do that for Sri
Lankan startups.Hatch’s 60,000 square foot facility, which is also a co-working space, can accommodate 1,000 people when it’s fully operational.

Here are some excerpts from an interview with Jeevan Gnanam and Nathan Sivagananathan…

What are you trying to do here with Hatch?
Gnanam: We want to try and catalyze the startup ecosystem. We felt that one central location for all startups to cross-pronate ideas and create something exciting was a cool idea, but to make that happen, we had to add a lot of things like an investment fund, an accelerator programme, an incubation programme, cool spaces and great collaboration areas. We also needed to work with partners who understood each of these specifi c areas, and knew about it better than we do. For example, for social investing, we need a partner who understands and wants to focus just on that. For good life acceleration, we have another partner.

Sivagananathan: Something we noticed was that most startups go into a location and don’t learn much, but just germinate within a team. Elsewhere in the world, we have seen how people interact and share ideas with other startups, because at an early stage, you can’t afford every single skillset that your business needs. Generally, if you go up to someone and say “can you help me with this”, they will always help you.

Second, you want to be in a space with access to things you generally can’t afford in your startup like nice meeting rooms, a coffee shop or admission to inspiring events. We encourage people to mentor startups. For instance, if you want to get a chief executive, owner or founder to come to your location and give a half an hour mentorship to a startup, they won’t be willing to drive one hour to a location. But, they will come here and spend an hour with two startups, and may even invest in them.

We are trying to do a full 360 and encourage sharing. Sri Lanka has this issue about people being closed up. We want to encourage people to share problems and collaborate with others to solve them. We are also building a global network with similar outfits all over the world. The ones in the US, Germany, Norway, the UK, Australia, Myanmar, Vietnam and Indonesia are already in, so far. We’ve lined up other centers like ours so that startups here can go, spend time and learn from there as well.

Tell us about your partnership.
Sivagananathan: The two of us have been investing in startups together and individually, and were noticing the same challenges. We started working on this idea in 2014 to change Sri Lanka’s startup landscape. We clearly understood that a startup accelerator was needed. We even looked at a government-driven accelerator and co-working space. But there were many challenges in that.

So we realised that we had to do it ourselves to show what can be done. That’s how this started. We were originally going to set it up at TRACE Expert City. It made sense with all the IT companies there. But that space was given away to someone else. When this place came about, it was close to the World Trade Center, in an old building with a lot of character and history, and very close to the Fort railway station and bus stop as well.

Gnanam: When we invest in startups, we found that the mistakes these guys make over a period of five years can really be condensed into six months. That’s really why we were keen to get them all together, to learn off each other.

Typically, what are those mistakes?
Gnanam: An example is growth hacking. No company today does it properly. They don’t understand how to use the tools available, how to find the right customer, or how to market and scale quickly. I think if we implement one tool right, that will solve 20% of the problems. Our entire space downstairs is for events. We want to have frequent events and create a learning culture. So when you are here, in the morning there will be something on IoT, in the evening something about tourism, etc. Maybe a startup will grab something from one and then another idea from another, and put the two together to create something extremely cool.

Sivagananathan: Some of the common mistakes startups make and ones we can help avoid are that they pick the wrong teams: they build teams that are very similar to them, which may lack other key skills. Second, they don’t spend enough time understanding the consumer. I’ve seen a lot of engineers make the big mistake of not spending time trying to understand the consumer. The third is that they over-develop a product. They don’t do minimum viable products to get feedback and keep improving. They just want to continue to build a product without understanding what the consumer needs or will appreciate. Jeevan and I are mentoring some of the startups here, and their CTOs want to build the best product and they don’t want to launch until its perfect. But we’re constantly pushing them to launch earlier.

Tell me about one or two things you got wrong here, at Hatch.
Sivagananathan: We moved into a space whose former occupant was the government. We didn’t insist that they move out. So you constantly have all sorts of people walking in with their files. We have seen files from the 1970s’.

We’ve also been busy trying to explain and get approvals for some things here. We have a coffee shop in here and would ideally like to have a bar at some point as well to keep with the whole ecosystem. Some people like to hang out in a coffee shop, some in a members’ area, others in the event space, some in the eating area and others at a bar. So we are trying to create something for everyone in this space. It also probably has the nicest basement you’ll ever see, under the building. Its walls are made of exposed brick and it used to be a safe for the Central Bank as well as a one-time prison. We are trying to clear it out for use.

Any last thoughts?
Sivagananathan: Our only request is for people to come and mentor these startups, because I think a lot of these guys are first-time chief executives and founders, and they are making common mistakes. If you advise them and open a few doors, they could scale really fast. Sri Lanka has to build more of these businesses if we are going to stand on our own two feet.