It’s really hard to take a deep technology idea and nurture that idea until it grows into a real business, especially with the pressures of modern tech venture capital. 500 Startups thinks it can make that process a little easier.
Starting this July, 500 Startups will launch a data-startup oriented track for startups working on big data and machine learning problems. Chris Neumann, who had been advising 500 Startups on this topic since January as entrepreneur-in-residence, is now joining the incubator as a venture partner and will lead the track.
“The current model doesn’t work for enterprise data companies,” said Neumann, who founded DataHero and sold it to Portland-based Cloudability last year. “Maybe it takes longer than 18 months to build your MVP (minimum viable product), and once you layer on top of that enterprise sales cycles, it turns into something very different” than experienced by the consumer-facing social media apps so popular among incubators and venture capitalists over the last few years.
Also, founders of deep technology companies tend to be, well, immersed in deep technology problems and less aware of what it takes to turn a product demo into a customer pilot and eventually a sales commitment, Neumann said. VCs won’t fund small companies until they’ve demonstrated at least some traction, and first-time founders with great tech ideas often need help getting the business part off the ground.
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