Author, Raleigh Wooldridge met with Alchemist Accelerator Managing Director Rachel Chalmers to discuss AWS’s Space Accelerator. Rachel provided background on the program as well as an overview of companies selected in the 2022 cohort. Most useful to SGAC members, she gave a glimpse into what characteristics startup accelerators, specifically AWS and Alchemist, look for in startup founders. If you want to learn more about the AWS Space Accelerator and potentially submit an application in April 2023, you can find information at the Alchemist website.
Please give a background on yourself and Alchemist Accelerator.
Alchemist is Silicon Valley’s leading accelerator focused on enterprise startups, startups that monetize from B2B or B2B2C business models. It has been around for about ten years. It is the brainchild of Ravi Belani, who is the lecturer in entrepreneurship at Stanford Engineering School.
Ravi and I had been talking for years about me finding a role at Alchemist. I came on board to build the corporate and government services division and that is the division that is working with AWS on the Space Accelerator.
Can you describe AWS Space Accelerator? What is its history? What is its mission? and who is involved?
“Corporate Innovation Done Right”
AWS has as part of its mission encouraging and persuading startups in relevant industries to use AWS Cloud, but also helping them connect to AWS’ much larger universe of partners and customers. It runs accelerators in several sectors including healthcare, space, and defense. The mission of these accelerators is to connect AWS to this larger ecosystem of startups and then to connect these startups back into the AWS ecosystem.
This is part of a model that we at Alchemist are seeing that I like to call “Corporate Innovation Done Right.” There’s been a lot of efforts around corporate innovation and persuading very large companies to try and foster disruption. This is very difficult because a large company is set up to maintain the status quo and maintain its existing revenue streams, so introducing disruption introduces all kinds of cultural challenges.
When you create a startup accelerator as a mechanism for a large corporation to engage with the startup ecosystem, the accelerator works as sort of an impedance matcher (check) between the slow-moving large organization and the nimble little startup. You have a structured framework in which early-stage founders can engage with a large corporation in a very mutually beneficial way.
I see the AWS Space Accelerator as an example of this corporate innovation done right. It’s focused on this new generation of private space companies that have come into being since SpaceX took advantage of the fact that NASA and ESA and other agencies are now working much more intensively with private sector companies. That shift in itself has opened enormous new opportunities for these private companies. AWS wants to facilitate that both to grow the industry and to grow demand for its own services. That is the context for the Space Accelerator.
It is now in its second year. Last year it was run by our friends at Seraphim. They are a VC company, they do not specialize in operating accelerators, so we came in this year. We operate accelerators at AlchemistX. That’s what we do. In partnership with AWS, we were able to put together one hundred hours of content from one hundred and five subject matter experts and deliver those to ten incredible startups.
How is the Space Accelerator structured? How do companies apply? What is the selection process?
Most of an accelerator happens behind the scenes and a huge amount of it happens before the startups even apply. The process is we publish an application form, but we also do a ton of outreach. We want to make sure the very best startups in the world know about this opportunity, so we at Alchemist did a ton of research. We worked closely with AWS who reached back out to folks that had applied to the accelerator last year and were maybe too early. We also scoured the world for startups that were a good fit and would be able to take advantage of the resources that we put together.
We got a fantastic field of applications from the startups. Thanks in part to those outreach efforts. Thanks in part to our partners are AWS. We read all of those applications in great detail. The AlchemistX team was keen to talk to as many space startups as we possibly could, so we arranged rolling interviews during the open application period. We tried to reach out and talk to as many startups as we could that looked like they might be a good fit for the program.
Once applications closed, we recommended the finalists to AWS and passed them along to an interview with an AWS panel of experts. Alchemist had already talked to as many companies as we could, and we had folks like Jeff Crusey from Seraphim and Bala Ramamurthy who is an Alchemist founder who works at SpaceX sitting in on those interviews and giving their expertise in passing folks along to AWS. Then the finalists pitched AWS and those judges huddled and we came out with the final ten. It was an astonishing field this year AWS folks said, and we agreed we could have fielded three full accelerators. We could have picked thirty companies out of this application pool, so it was highly, highly competitive, and kudos to the final ten for making it through all of those obstacles.
How does AWS & Alchemist support start-ups selected to participate?
There’s obviously the face-to-face programming and that’s a ton. It was four hours a day, five days a week, for four weeks of the program, so there was 20 hours of programming every week. I sat in on all of it and so did the AWS folks and it was exhausting, and we weren’t even start-ups trying to take advantage of this.
We did a lot of working with the startups to make sure they sent the most appropriate delegates. We let them know what the sessions were so that they could assign the relevant members of their team. We wanted as many of their team members as possible to have the opportunity to participate in the accelerator.
AWS provided each startup with a mentor to work with them over the course of the program that would be a subject matter expert. Alchemist provided a program coordinator and a program director who were able to work with them on logistics. I was available, particularly towards the end of the program. My biggest contribution was running all of the companies through their pitch.
We had an investor feedback summit at the end of the program. Not a demo day, but an event where we invited very influential investors who specialize in the space sector to come and provide feedback on these pitches. We rehearsed all the companies through their pitches a couple of times. We had the investors come in and then the startups would pitch the investors, and the investors would give constructive feedback on their pitch. This is incredibly valuable preparation for a demo day because rather than just pitching into an audience and not knowing if you did well or badly, they were pitching to these very, very experienced investors who were able to give them advice on how to structure their pitch to make it more appealing.
“They are part of the family…They are AWS Space Accelerator companies now”
In general, once the startups apply to the accelerator, once they are accepted, they are part of the family, so we are continuing to work with those startups even after the formal programming period has ended. They are AWS Space Accelerator companies now, so they are just in the club and we will be working with them going forward.
How do companies stay involved or benefit from the program following the accelerator process?
Both formally and informally. They receive cloud credits. They have co-marketing and co-selling opportunities with AWS, and AWS works really hard on this. They connect the startups with their sales team. They write blogs about the startups. They invite the startups to speak on stage at AWS and other major space conferences. There is ongoing engagement in those formal and informal ways.
There is also ongoing access. We know these founders now. The folks at AWS know these founders now. They can call anytime. We are going through and introducing them to relevant customers and partners. Making warm intros to specific folks in our networks. Demo day is coming up on September 8th. We will be inviting investors for a real pitch and fundraising event. That should kick off a fundraising effort which we hope to match or exceed what cohort one was able to do. [Last year’s cohort raised ~$360M]
What companies were chosen in 2022?
They are a completely amazing cohort. As you would expect, there were quite a few analytics and geospatial earth observation companies.
Are there any start-up success stories you are proud to share?
As you noted last year’s batch raised $360 million. Clint Crosier, who is the amazing veteran who runs the Space Accelerator division of Amazon, calls this year’s cohort the “Titan Ten.” He is constantly doing press and telling these amazing stories about the companies. He is confident that this cohort can match or exceed what last year’s did.
And we talked about the partnerships within the cohort. Albedo and EOSDA talking about their satellite businesses together. Mission Space, Kayhan, and Magdrive helping satellites navigate collisions and space weather. The Exploration Company and Epsilon3 managing those complex space missions together.
Tons of opportunities for those startups to collaborate. One of the most compelling sessions we ran for everyone was just putting two companies in a Zoom room together and letting them talk with a structured set of questions to ask. They came out with lots of ways that they could interact, work together, and share resources.
What does AWS and Alchemist look for in space start-ups? What qualities are you looking for in start-up leadership?
“We look for colleagues and partners”
As I said, we were with these folks for twenty hours a week for four weeks. It was super intense. We didn’t want to be butting heads the whole time. Alchemist looks both in the accelerator programs we run for clients and the accelerator programs we run ourselves, we look for colleagues and partners. We obviously look for hyper competent problem solvers and deep domain experts. This is the tech industry. To a first approximation, everyone here is incredibly smart.
What really distinguishes the founders who are successful is that they are also great communicators. They have a cool head in a crisis. What we are looking for are colleagues that we will want to be stuck with for twenty hours a week for four weeks and to have ongoing relationships with for the years after the Space Accelerator. We are looking for people who have high emotional intelligence, who face difficulty with curiosity rather than panic or anger. We are looking for people who are deeply, deeply in love with a very chewy problem, a very large area of challenge that the solution for would benefit a large class of people and who have a differentiated solution to that problem.
The characteristics of successful founders aren’t that they have already answered the question, but that they are curious, tenacious, and resilient when their proposed solution meets the customer and the complexity of the technical domain and inevitably is found to have weaknesses. Those founders are the ones that can navigate that complexity and figure out new paths forward. We look for people that we want to work with for the next five to ten years because that is the goal.
What recommendations would you have for SGAC members who are either involved in startups or thinking about starting a company?
Do it. There has never been a better time to start a space company. There’s capital available. There’s advisors available. The shift from government funded to private space has created incredible opportunities.
I know that anyone thinking about a startup now is looking at the capital markets and feeling nervous. This is my third or fourth time on the merry-go-round. I have been in Silicon Valley so long and one thing I can say with absolute confidence is that truly great companies, I mentioned both Splunk and Cloudera which are multi-billion-dollar companies, the truly great companies are built during the downturn because that really tests your resilience and grit as a founder. It tests your curiosity, your frugality, your ability to do more with less.
“Do it. There has never been a better time to start a space company… The truly great companies are built during the downturn because that really tests your resilience and grit as a founder. It tests your curiosity, your frugality, your ability to do more with less.”
Capital is a mixed blessing. You need it when you need it, but when you are in those stages of exploration and trying to figure out product market fit and trying to find customers that really need what you offer, capital, raising capital in particular, can be a distraction. The really great companies focus manically on the customer and on solving a problem that really matters to their customers. That means you can run on revenue even when the capital markets dry up. That makes a really powerful company.
The advice I would give – other than do start a startup – is make sure you love a problem enough to be obsessed with it for a decade. It has to be a problem that is big enough to satisfy your curiosity to give you the kind of challenge that you can work on for ten years.
What guidance would you give to SGAC members to improve their application to AWS Space Accelerator?
Show us why you are a great fit. Show us how you will benefit from this program. Show us your appetite for learning and partnership. Talk more about the problem than your solution. Tell us why this problem matters, why people will pay to have it solved. Show off your customer empathy by being very knowledgeable about the domain.
Demonstrate your curiosity, because the biggest success criteria for a startup in an accelerator is their ability to absorb huge amounts of information coming at them. The accelerator by its nature concentrates this information flow into a few short weeks with a deadline, so show us that you are capable of absorbing a lot of information, acting on it, making meaningful changes, and benefitting from all of the effort we are putting into making these sorts of connections for you.
We are looking for founders that will be coachable and will be able to capitalize on all the resources that we are able to make available to them.
Any concluding thoughts?
This has been an incredible project for me. A dream project. My dad worked on satellites when I was a kid. I have always been a NASA junky and loved watching rockets launch. It is wonderful to be able to do it now in your workday, just have a window open with a SpaceX launch on it. To be able to work so closely with this next generation of space companies was a dream come true for me. I am very grateful for our partners at AWS for the opportunity.