Last Thursday, July 23, the 16 fellows of PresenTense’s summer Institute 2009 cohort stood before close to 250 people and in one fell swoop launched 14 new social ventures into the world. The next morning we got together for brunch to do one last reflection on the summer and its program, and the main question on everyone’s mind was: now what?
This question – where do PresenTense ventures go after the six weeks of the summer Institute – has been much talked about recently: it was brought up by Raphael Ahren in Haaretz, who wrote that “A number of last year’s fellows, however, seem to have neglected their projects after departing the institute, with their Web sites lying barren ever since.”
In response a number of PresenTense’s contributors and members have emailed saying that they felt fellows success was underplayed. Others, such as David Abitbol from Jewlicious, came to commend us on transparency – that we are willing to admit that not every venture launched will achieve success – and even others, such as Jacob Berkman at the Fundermentalist, claimed to have no opinion at all.
It seems to me, then, that there is no better time than now to explain what PresenTense sees as success.
PresenTense is a pre-seed accelerator program: we take individuals with ideas and professional backgrounds that make those ideas realistic, and we enable them to build that idea up so that they may launch a proof-of-concept. As such, over the past three years, PresenTense has launched 41 new ventures into the world – that is to say, 41 social ventures in the fields of education, social action, environmental activism, philanthropy and the arts. Each of these ventures finishes the summer with a clearer understanding of their target market, product, team requirements, business model, budget and finance requirements than when they came in. Most finish with a website, publicity materials, a logo, and first partners that will help get their venture to proof-of-concept. And it is at that early stage that we send these entrepreneurs out into the field.
So how do we measure success? Simple: we track to see how many of the projects receive follow-on funding and how many projects are either merged into existing ventures or acquired by existing ventures. This could, in for-profit terms, be seen as an early stage “exit” – that is to say, PresenTense makes the initial investment in helping an idea transform into a living, breathing venture – and we count it as a success when someone else, who would not have invested in something that was just an idea, comes in and helps scale up that venture into a going concern.
When we say that 11 out of the 27 ventures that PresenTense’s summer Institute launched in the first two years of existence are successes, we mean that 11 of those 27 ventures have received follow-on funding or merged into other organizations. These ventures include BibleRaps, Challah for Hunger, ImpactAliyah, Doogree Records, from 2007, and Hey Yiddle Diddle, Be a Kli, Shomer Achi, Israel Arts Management, Tamid Investment Group, Tagged Tanakh, and Odeka. Other projects which are still going concerns without external investment include Oorim, Potential State, and more. And even others adapted their ventures’ core products into new operating environments – such as Protexcia‘s cultural programs for Olim, that now make up key elements of Tel Aviv University’s iMBA program and Coffee&Confusion.
The success rate we often quote is 43% – which means that we are counting success of 11.5 out of 27 (the .5 coming from two projects combining and being acquired together) – which is very high compared to the more risk-oriented VC’s often-quoted 1 in 12 (or 8% rate), still much higher than the general rate of entrepreneur success (18%), and is above average compared with general market small business and start-up success rates – high when you take into account that these efforts are young ventures (led by individuals with business experience generally with low work experience), and that these are generally nonprofit ventures who are not employer firms (they open without any hired staff).
In other words, PresenTense might not see a venture through the long haul – but we make sure it gets the running start it needs to make it past the most immediate hurdles. And if it lasts – as many of ours have – we define that as success.
And what is failure? Failure in PresenTense is often still a success for the Jewish People – the 16 of the 27 ventures that have not received follow-on funding and have not been acquired have found their founders join organizations across the spectrum where they contribute their newfound experiences and skills to the betterment of the field – such as Adam Soclof, founder of Hyper*Semitic, now a Schusterman Insight Fellow who rocked JDub and now is rocking the JTA.
That’s what I call win-win.
Ariel Beery is Co-director of The PresenTense Group.