Creative Destruction Labs (“CDL”) is a startup accelerator/incubator that originated in Toronto, and is opening up branches across North America. Their model is unique in that they take no equity, and seek to create successful companies through a monthly goal setting/check in program.
I attended with Plurilock early in our lifecycle, and had a mixed (though mostly positive) experience. We participated in the very first CDL-West (Vancouver) cohort, and provided substantial feedback back to the organizers, so our experience is likely different if we went through it today.
I’ve been approached several times by founders looking for advice on the program, and specifically, what I would do differently next time if I did it over. To that end, I’ve assembled my thoughts, recommendations and lessons learned below for those interested.
CDL Program Structure
Application process: Fairly standard. Try to get an alumni member to refer you into the program, as it carries more weight than a stand alone application. You’re welcome to ask me to refer you in.
Meeting process: There are half a dozen meetings that you attend over 6 months. There, you present your progress to a small group of mentors, and set on goals for the next meeting. After goal setting, your mentors “present” you to the group where the room hears your progress, goals for next month, and whether you should stay in the program.
Between meetings: Interested mentors who’ve volunteered to spend time with you are expected to provide 4 hours of assistance between meetings. I found that most did not spend this amount of time (in some cases, was a 30 minute phone call that started late and ended early), and I could have asked for more from them than I did. Make sure you set your goals during these mentor meetings. You don’t have time during the day-of, as it’s a short 15 minute
Depending on how much progress you’ve demonstrated against your agreed-to goals, you may get to come back next time, or get asked to leave.
Meeting dynamics during the “day of”
Despite the reputation and brand they are trying to build, not everyone in the room at CDL meetings are altruistic. Just like in life, everyone has their own motives, and they won’t all align with yours. The group assembled is big enough that the organizers can’t screen everyone, and you need to watch for negative behaviour. This isn’t specific to CDL, but it’s worth keeping in mind.
You can expect that people in the room include:
- Service Providers: lawyers, accountants, SR&ED consultants, and so-on.
- Angels Investors: people investing their own money
- Venture capitalists: people investing other people’s money
- Former operators: people who have been there, and done that, and looking to pass on lessons learned
What CDL is good for
- Gets you meetings with people that would be time consuming or extremely difficult to arrange otherwise.
- Gets you access to advice from experienced operators.
- Can help you raise an angel and/or seed round.
What CDL is NOT good for
- No formal alumni network to tap (you need to build this yourself).
- Valuations are depressed relative to what you could raise on your own, and especially what you could raise in the US.
- Thy don’t do a good job of lining up first customers. No corporate innovation partners.
What to watch out for
Be extra careful about what impression you leave folks with. In Vancouver at least, the whole city is there in person (or 1 connection away) and making a bad impression here will be hard to overcome.
CDL is a group, and group dynamics come into play. Because you are pitching to investors, even investors who wear the label of “mentor”, those investors are incentivized to depress valuations and grind you down on terms. Because you are pitching a group, they will use group consensus to do this.
Beware that investors, mentors and organizers will meet privately to discuss the ventures, and could/can/have collude with one another. I’ve seen instances where individual mentors sought to kick a venture out a program, so that they could work with them directly on a fee basis, and brazenly announce this to the group without consequence.
Hold the mentors accountable.
CDL doesn’t do a good job of holding their mentors accountable, and you need to flag it when it occurs, and fight for what you feel is right. If a mentor is assigned to work with you, hold them accountable to giving the full 3-4 hours. Get introductions from them, hear their advice, and give them homework assignments. Work with the organizers if you aren’t getting the support you need, they are your best advocates.
On the application, CDL asks how they can help .
Answer with tangible and quantifiable goals. For example, if you’re looking for capital, rather than saying “introductions to sophisticated angel investors”, consider rephrasing to say “introductions to professional Angel investors who have made multiple investments in industry XX”. The more tangible you can make it, the better.
Qualify the advice you get!
Make sure the person giving you advice has relevant experience in your area, and that it passes your BS filter. Pay particular attention to business models. For instance, if you are a B2C company, take with a grain of salt someone who struck it big selling B2B.
Make the most of every meeting.
At the beginning of each meeting, there is a big set of introductions. Take note of who you want to talk to, and seek them out at the breaks. I found it very effective to message them on Slack and arrange to meet in a corner. Do this for every meeting, as the attendees will change.
Get close with your cohort.
Whether intentional or unintentional, the venture founders are kept separate from one another, and it’s difficult to connect with your peers.
Our cohort started our own slack community separate from the main CDL group, and it’s been a tremendous source of advice, referrals and support for many years after the experience. You can pool resources this way, and get reputation checks on investors you come across.,
tl;dr in conclusion…
As a free accelerator, the program can provide a network of people that would take a long time to build otherwise: local Investors and fellow entrepreneurs.
I found it worth the time, even including the travel time to drive/fly in the day before, and was successful in raising money from angel investors in the room.