Founder Institute, a pre-seed startup accelerator, has helped launch over 3,500 companies around the globe. Its Cofounder & CEO Adeo Ressi built the institute on the awareness that transformative, high-quality ideas do not solely sprout from Silicon Valley. A few months ago, Luxembourg joined the list of 180+ cities in which the Founder Institute operates. Adeo swung by to tell us more.
(Featured Image: Adeo Ressi, Cofounder & CEO of the Founder Institute / Image Credit © DigitalK)
Let’s start at the beginning. Why did you launch the Founder Institute?
I started working on it in 2008 and it was founded in 2009 in response to the financial collapse. At that point, it was clear that banks and politicians had led us down a bad path and entrepreneurs were going to fix the problems of the world. But they didn’t really have a seat at the table. There weren’t a lot of them and there weren’t many support mechanisms for entrepreneurs. So, I figured I’d try and help as many entrepreneurs get started as possible. Then hopefully they would work on problems that would make the world better.
This would lead to this positive cycle of new entrepreneurs entering the market, solving problems of the world and taking over the responsibilities of banks and governments. I would say banks and politicians are making less effective, positive changes in the world than they did 10 years ago.
“When we enter places like Luxembourg, there’s almost always pent-up demand: people who have been sitting on the sidelines thinking of starting something.”
What does the Founder Institute focus on?
“0” – you have dream, and “1” – you have a company. We fill an unusual spot from 0-1. A lot of people have dreams, but there’s not a lot of 0-1 programs. Universities have them, but students tend to be crappy entrepreneurs, or they have no money. You can get lucky like Facebook, but there’s one Facebook per hundreds of millions of students so it’s a bit of a needle in a haystack.
There are also some government programs. Those are not professional-minded, so it’s charity at best. We do 0-1 very well. When we enter places like Luxembourg, there’s almost always pent-up demand: people who have been sitting on the sidelines thinking of starting something. When the Founder Institute comes along, that’s the inspiration they need to take the first step. Oftentimes, you see some very strong companies out of the first cohort.
“Silicon Valley is in trouble. That’s actually good news for the rest of the world.”
You live in Silicon Valley. What are your observations on the ecosystem there?
Silicon Valley is in trouble. That’s actually good news for the rest of the world. Silicon Valley has definitely lost its way in the last few years, but that was almost inevitable. While it’s somewhat negative because the region is creating bad companies for humanity, it’s positive because it is creating opportunities for other ecosystems to thrive. In the past, somewhere north of 50 percent of all capital was invested in and around Silicon Valley. Today, that’s dropping quickly. US as a whole is now below 50 percent of capital invested worldwide and Silicon Valley is only a piece of the US.
“I would hope to see somewhere between 8 and 15 companies emerge, depending on how tough you are with the graduates.”
What makes a company bad for humanity?
Google and Facebook are inherently not good companies for humanity. The pay-per-click model that Google has created is, on the one hand, taxing the internet and, on the other hand, creating a really negative business model. Print media and media in general is being decimated. The money goes to wherever someone clicks. As a direct result of the Google model, you have clickbait and content farming.
Facebook obviously violates privacy on a grand scale, with little or no regard for core values or human decency. And these are the two seminal companies headquartered in Silicon Valley.
“Luxembourg needs a few pan-European success stories because there’s clearly money here and there’s clearly talent here, certainly fintech talent.”
What do you expect from the Luxembourg chapter of the Founder Institute?
I would hope to see somewhere between 8 and 15 companies emerge, depending on how tough you are with the graduates. Being tough works in our particular space, especially in Europe where there’s a lot of startup welfare.
I would like to see at least half of them get to a multimillion-dollar valuation within six months of graduation and be validated by third-party investors in their business areas – with a few more of them reaching that valuation within two years of graduating from the program.
We would also like to see a few companies reach a relatively high valuation fairly quickly. We call that speed out of the gate. Most of our companies are created during the program. When they graduate, the corporate entity itself may only be four to six weeks old. They are brand new, so to get a multimillion-dollar valuation within six months means that these companies are moving very fast.
Luxembourg needs a few pan-European success stories because there’s clearly money here and there’s clearly talent here, certainly fintech talent.
“”All good entrepreneurs come here (Silicon Valley). Why would anyone start an interesting company anywhere else?” So, I funded it.”
Did you fund the Founder Institute yourself?
When we first got started, I went to some of the top investors in Silicon Valley and said, “Look, we’re going to create great companies all around the world. You should invest. It’s a signal that Silicon Valley believes in other places.”
Every single one of them said, “You’re crazy. That’s a stupid idea. All good entrepreneurs come here. Why would anyone start an interesting company anywhere else?”
So, I funded it.