Plug and Play is here to “actually make shit happen”
The number one innovation platform and accelerator in the world is anticipating its next new location may be in an unlikely place: Fargo, North Dakota. So why should you care?
Silicon Valley. Abu Dhabi. Jakarta. Beijing. Amsterdam. Fargo?
With 22 locations around the world, including places as far away as Silicon Valley, Abu Dhabi, Jakarta, Beijing and Amsterdam, Fargo may seem like an unlikely spot. However, when you know the history of how they came here and what they hope to accomplish, Fargo could make perfect sense. Michael Olmstead, Global Head of Corporate Partnerships for Plug and Play had a simple answer on why they may come here.
“Serendipity,” said Olmstead. “We have a couple partners that are local to North Dakota with Bremer Bank and Bobcat. We’ve been working with them for a couple years in Silicon Valley. They’re very comfortable with us as a partner… I remember several occasions where our main contact Melissa (Carmichael, Strategic Innovation Manager) from Bremer Bank was talking about the region and there being a big opportunity.”
James Leiman, Director for the Economic Development and Finance Division at the North Dakota Department of Commerce, went out to Plug and Play’s headquarters in Silicon Valley and did a reverse pitch to them to come to North Dakota. After many discussions, it was agreed upon and while it’s not 100 percent solidified, Olmstead is very con dent that they will be opening a location in Fargo.
So what the heck is Plug and Play?
As the largest global innovation platform, Plug and Play does a lot of different things. They run 50 different accelerator programs in 15 countries at 30 locations and they also invest in about 250 startups every year, which makes them the most active investor in the U.S. based on the number of investments.
The innovation platform in Fargo would be industry specific to ag tech. How the program works is, Plug and Play has corporations and partners all around the world that they team up with and the corporations dictate the focus of the program from a technology perspective.
Let’s run a scenario to illustrate how this works. I own Fargo INC tractor and I want to invent a tractor with a bathroom in it but I don’t have the time or resources to create it on my own. I’ll team up with Plug and Play who will do a two-month call for applications where startups will apply to the program. During this call, they’ll get anywhere from 250-1,000 applications. Plug and Play then does their due diligence to narrow it down to roughly the top 10 percent of applicants. From there comes selection day.
On that day, startups will present to the corporate partners and be voted on. If you are one of the 10-15 startups that has the best idea for a toilet in a tractor, you are then put into a three-month program that’s comprised of weekly mentorship sessions, business model re nement sessions, pitch polishing and a whole slew of other education.
“The three months are really meant to vet each other and potentially come up with a pilot like a short test where they can validate the technology and use case,” said Olmstead. “If that works out, it can roll into a commercial deal. This is about making business happen between the startups and corporates involved. It’s also to get these startups additional funding and to get additional venture capitalists interested.”
Why do I want to be involved in Plug and Play?
Oh, and if that wasn’t good enough, if you’re startup is chosen on selection day, Plug and Play requires no equity and will even give you an investment, office space, clout and access to their partners.
“If you’re able to get selected, it’s an amazing experience for your business,” said Olmstead. “The tough part is getting selected. It’s not like just because you applied, you’re going to get in. You go through a rigid sourcing and evaluation process, which isn’t only Plug and Play. It is the corporate partners. They are the stakeholders.”
Judging by some of the companies that have gone through their accelerator programs, he isn’t lying. Some of the startups that they’ve worked with include LendingClub, PayPal, Dropbox, Zoosk, Danger and hundreds of others. Their model and process have turned them into the most successful accelerator in the world.
“We find the startups that have that technology, we put them in the room together and we see how those interactions take place and the successful interactions lead to Plug and Play investing in that startup,” said Olmstead. “It’s a win-win-win. The corporate gets the technology, the startup gets the customer and we get the insight of whether to invest or not.”
What would they be doing for North Dakota?
In any given year, Plug and Play will work with 30-40 startups that they’ll accelerate. In North Dakota, access to venture capital is very limited. In fact, 50 percent of all venture capital money is deployed from Sand Hill Road in Menlo Park, California.
“We want to build that bridge between North Dakota and Silicon Valley,” said Olmstead. “We want to bring that capital to North Dakota and to be that connective tissue.”
With locations all around the world, Olmstead has seen the success of this program firsthand. In Stuttgart, Germany, they opened a Plug and Play despite the fact there were no startups but there was Mercedes-Benz, Porsche and Bosch. They have since created the largest mobility platform in the world because of those corporate partners. Olmstead views North Dakota as the same with large players in ag tech with corporations like Bobcat, John Deere and Microsoft.
“In the case of North Dakota, we feel we have a tremendous pull and opportunity with these corporates,” said Olmstead. “It’s really tough to attract startups outside of North Dakota or the surrounding cities if you don’t have a reason to be there. We have that reason.”
How will they help the Grand Farm?
Plug and Play will really be a way to vet companies to get involved in Grand Farm. Considering the fact that, last year, they accelerated 1,107 startups, their average check size was $147,000 and they had 280 corporate partners, Plug and Play is an expert in choosing successful startups.
“When you think about Grand Farm, you have to have innovators,” said Leiman. “We have a lot of corporates that are innovative. Then you have disruptive technology and you have new software applications, tools and autonomous systems. All of these things come together for precision ag and are aligned to Grand Farm. More or less, you’re effectively accelerating the Grand Farm by having this in place.”
One of the main goals of Grand Farm is to create a strong and vibrant ecosystem around ag tech. Plug and Play already has industry-specific innovation platforms like Fintech, Insurtech, mobility and real estate and construction at their locations around the world. They recognized the potential of ag tech in North Dakota.
“You’re only as strong as your ecosystem,” said Olmstead. “That ecosystem is complex and there are a lot of different stakeholders and different types of entities but you need the government, corporates, startups, venture capitalists and innovation junkies in place. But once you have that ecosystem, it’s very tough to pull apart.”
What do you need to know to be successful with them?
What the corporate partner is looking for in a startup really varies depending on its need, but Olmstead has noticed that there are a couple of common mistakes he sees startups make as they go through their program.
“As a startup, there’s a tendency to try and be all things to all people. I think the first piece of advice I would give startups is to be honest and know that it’s OK to say that you can’t do that or no, that’s not what we do or we don’t have the technology to apply to that case study. I think that’s the first thing because startups get pulled in a lot of different directions and are really focused on getting that first customer but you end up wasting time and hurting your own business saying yes to everything.
“Also, if you’re starting a company, make sure you have dedicated co-founders and a good team because you’re only as strong as your people in the early phase. Sure, the technology and market matter but it’s really the people and execution. I’m sure this is very cliché and it’s in all the books but it’s really the team that’s going to make this vision happen. There were plenty of ideas to do search engines back in the 90s, but only one became Google and that’s because of the team.
“If you’re starting a company, make sure your co-founders are solid and you have an engineer or two. You can’t have a one- man show and you can’t have a company with no engineers. Those are fundamentals. We would not even invest in a company if they didn’t have a co-founder and a technical person on the team.”
What does this all mean?
Innovation is great. Entrepreneurship is wonderful. Blah, blah, blah. We’ve heard it all before. You’re asking yourself, why do I care? Well, think beyond yourself, you sel sh butthead. This is about the future of the state and how we’re all growing.
“The key takeaway here is we have a rapidly growing and evolving tech community in our state,” said Leiman. “This is the augmentation necessary to really help our region realize its full potential from an innovation, entrepreneurial and financial perspective.”
Ok, maybe you’re not a butthead. Maybe you should be thinking about yourself and what you can get out of Grand Farm and Plug and Play potentially coming to North Dakota. Well, Olmstead has good news for you.
“In order for North Dakota and the corporates, startups and anyone who stands to benefit, they really need to come together. When we come together around these central topics like ag, you can actually accelerate business.
“Imagine if you have the corporate, investor and startup in the room and you got Plug and Play and the government entity supporting that, that’s how you can actually make shit happen. You get everyone in the room together and you can truly accelerate the visions of these entrepreneurs. Startups have great ideas but the most valuable resource they have is time. If you don’t get to market fast enough, if you’re too slow, if you can’t raise that round of funding in time, these are all things that will impact you as you make your vision.
“If you have the ecosystem in place, you can gain time. You can speed up the process. You can get to market faster. You can raise that round of funding quicker. What we hope to do is band everyone together and get behind one cause.”
Plug and Play 2018 By The Numbers
Runs more than 50 industry-themed accelerator programs a year.
Accelerated 1,107 startups around the globe.
Works with more than 280 corporations around the world.
Accelerated 562 startups in the U.S.
Hosted 792 events in their Silicon Valley HQ.
22 locations around the globe.
Hosted 1,565 startup-corporate deal flow sessions.
$147,000: Average check size