017: Ocean, The Tech Accelerator

The SaaS (Software as a Service) Business Podcast

I interviewed Tim Sinclair in Episode 015. During the interview, Tim mentioned that he had gone through the inaugural class of the Ocean Accelerator. He also mentioned that Ocean is a faith-based tech accelerator. I had never even considered the intersection of faith-based organizations and tech accelerators and was immediately intrigued. I asked Tim if he could put me in touch with Ocean, which he did. Scott Weiss is the CEO of Ocean and James Clair is the Marketing Manager.

UPDATE: Ocean came out with important news for potential applicants just before the podcast release. They have increased their seed funding for companies accepted into their 2017 class from $35,000 to $50,000. Everything was already in place for the episode release when the news came out, and it would have been difficult to alter the audio to make the change.

Contents

• Episode Outline
• Resources Mentioned in Episode
• Episode Transcript
• Disclosure concerning affiliate links

Episode Outline

Click [Website] to go to the corresponding website location. Once on the website, you may listen to the episode starting at any timestamp [mm:ss].

• [00:00] Intro [Website]
• [03:12] Accelerator Defined [Website]
• [04:54] Accelerator Capital and Convertible Notes [Website]
• [07:28] Ocean’s Founders [Website]
• [08:07] Accelerators Versus Incubators [Website]
• [09:05] Ocean’s Unique Spiritual Component [Website]
• [11:39] Focusing on the Founder [Website]
• [12:27] Non-Business Relationships and Stakeholders [Website]
• [13:17] Ocean’s Message [Website]
• [13:49] Ocean’s Five Capitals [Website]
• [15:24] Maintaining Balance during a Business Venture [Website]
• [16:35] Marketplace Success [Website]
• [17:41] Ocean’s Work Ethic [Website]
• [19:18] Ocean’s Program Overview [Website]
• [19:48] Demo Day and Business Curriculum [Website]
• [21:16] Keynote Speakers – Day One [Website]
• [23:23] Keynote Speaker Discussion – Day Two and Beyond [Website]
• [24:53] Ocean’s 2017 Program Plans [Website]
• [25:20] Ocean’s Policy on Faith [Website]
• [26:12] Faith as a Component of Business [Website]
• [27:32] Ocean’s Program [Website]
• [27:45] Weekly Program – Speakers and Workshops [Website]
• [30:20] Syncing Program Behavior with Business Life [Website]
• [31:47] Ocean’s Field Day – The Importance of Customer Dialogue [Website]
• [32:39] Relocating as a Founder with Family [Website]
• [35:27] Ocean’s Ideal Company and Founder [Website]
• [37:29] Ocean Capital [Website]
• [38:07] Ocean’s Origins at Crossroads [Website]
• [40:48] Ocean’s Mentors [Website]
• [41:29] Role of the Mentor [Website]
• [42:36] Mentor Demographics [Website]
• [44:49] Partners [Website]
• [45:51] Brand Identity Kit [Website]
• [46:23] Design Style Guide [Website]
• [46:44] A Creative Space to Build Relationships [Website]
• [48:20] Cincinnati as a Hotspot for Entrepreneurs [Website]
• [48:51] Cincinnati’s Community Spirit [Website]
• [50:02] Cincinnati as an Ideal Region for Startups [Website]
• [51:23] Appropriateness of Cincinnati for Founders with Families [Website]
• [52:37] Ocean’s Schedule for Applications [Website]
• [53:19] Benefits of Demo Day [Website]
• [54:42] Post-Demo Day Activities [Website]
• [57:08] Universal Message of God’s Interest in Enterprises [Website]
• [58:39] Conclusion [Website]

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Resources Mentioned in Episode

Please see Disclosure* (below transcript) concerning affiliate links on this page.

• 805 Creative – According to the website, 805 Creative is an “Ohio-based creative agency dedicated to empowering our business partners with compelling ways to communicate their stories.” Listen or read at [44:49].
• Business Canvas Map – Also known as the Business Model Canvas. A strategic management template for visualizing a business’s partnerships, resources, revenue, and customers. Ocean’s program provides mentoring through the canvas creation process, focusing specifically on planning, the business model, the strategy canvas, and value proposition. Listen or read at [19:48].
• CincyTech – “A trusted partner for high potential technology companies in Southwest Ohio,” according to the official website. Scott Weiss mentions it to emphasize the many organizations surrounding Cincinnati which make it an ideal place for entrepreneurs. Listen or read at [48:20].
• Cintrifuse – Cintrifuse is Located in the Cincinnati, Ohio area. According to the website: “Cintrifuse acts as a connecter and supporter to create a global destination for entrepreneurial success. Cintrifuse connects the region’s high-potential, venture-backable startups to advice, talent, funding, and customers.” According to Scott Weiss: “Cintrifuse’s role is to coordinate all the activities, to minimize wasteful redundancy, and to get everyone in this broad region, which includes northern Kentucky and southeastern Indiana and southwestern Ohio, to work cooperatively so that we share resources and share programming.” Listen or read at [50:02].
• Lean Startup – Business development method pioneered by Eric Ries. Lean Startup’s methodology is built on the principle that designing products to meet the needs of early customers can prevent many product failures and funding expenses in the future. The claim gained widespread renown after the publication of Ries’ bestseller,The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses*. Listen or read at [32:25].
• Ocean – Ocean is an independent tech accelerator that is uniquely faith-based and focused on building founders.
• Ocean application – Ocean’s application window is (currently) September 1 to October 31. Listen or read at [52:37].
• Ocean Capital – Ocean Capital is a separate legal entity from the Ocean Accelerator but affiliated with the accelerator. It collects money from a broad range of investors. It puts money it into convertible notes for the companies in the accelerator. When investors get a return, the entity tracks the flow of money so that investors can be properly taxed. The entity does not have investment profits and losses. Listen or read at [37:29].
• Ocean on LinkedIn
• Ocean on Twitter – @OCEANAccel

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Episode Transcript Intro

[00:00] Ron Gaver: This is Episode 017 of the SaaS Business Podcast: Ocean, The Tech Accelerator

[00:16] Scott Weiss: One of the benefits of Ocean for any startup is [that] our demo day is on a large auditorium stage in one of the Crossroads buildings. This past year, we had 1,400 people attend live. We had 1,800 people stream it live. So that’s a total live audience of over 3,000. Last year, after we finished, we posted the stream (the stream’s downloadable). Ten thousand people downloaded the stream between last year’s demo day and this year’s demo day. So, if you’re launching a business, you get to come here. You get to go on a stage designed to speak to thousands. You get [a] professional production team fine-tuning your speech. You’re streamed live. Your slides are amazing. You get to launch your brand to, literally, thousands of potential customers and hundreds of potential investors. We work real hard to make sure that the audience has a high percentage of angels, angel funds, and customers.

[01:32] Ron Gaver: Hello and welcome to the show! I’m your host Ron Gaver. This is the podcast designed to help you put the pieces of the puzzle together to start, grow, and succeed in your SaaS business.

[01:44] Ron Gaver: Before we get into the show, I would like to personally invite you to visit our website. The URL is SaaSBusinessPodcast.com. When you visit, please be sure you sign up to get the FREE Resource Guide. This is a living guide that grows with the podcast. By signing up, you will always have access to the latest edition.

[02:01] Ron Gaver: For each show, you will also find extensive show notes on the website. Show notes now contain ALL links for resources mentioned in a show, an outline of the show, and a full transcript. I have designed these show notes to help you quickly find valuable information. To get to show notes, just enter the base URL, a forward slash, and the three-digit episode number.

[02:22] Ron Gaver: This podcast, the Resource Guide, and show notes are produced at considerable expense. They are my gift to you for your continuing growth and success.

[02:37] Ron Gaver: I interviewed Tim Sinclair in Episode 015. During the interview, Tim mentioned that he had gone through the inaugural class of the Ocean Accelerator. He also mentioned that Ocean is a faith-based tech accelerator. I had never even considered the intersection of faith-based organizations and tech accelerators and was immediately intrigued. I asked Tim if he could put me in touch with Ocean, which he did. Scott Weiss is the CEO of Ocean and James Clair is the Marketing Manager. Welcome Scott and James.

[03:07] Scott Weiss: Hey, how are you?

[03:08] Ron Gaver: Just fine, and you?

[03:10] Scott Weiss: We’re doing great up here. Thanks.

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Accelerator Defined

[03:12] Ron Gaver: Good. Alright, well let’s get right into it. For the sake of the audience: not everyone may fully understand exactly what an accelerator is, what you do as an accelerator; and then, beyond that question, I would like to know how Ocean is different. We’ll get into that, I’m sure, in a great deal of detail; but, first of all, what is an accelerator from your point-of-view, and what is an accelerator’s purpose and function?

[03:37] Scott Weiss: That’s a great question. I’ll lead off. So, let’s start with the founder. The founder has a great idea, and they work on it, they tinker on it, they devote themselves to it, and it gets to a point where they need some help; and that’s the role of investors. Whether they be friends, family, or angels, the capital they provide enables the idea to continue to move forward.

[04:01] Scott Weiss: Accelerators do two things: we provide a roadmap that allows the entire thing to accelerate—to speed up, to compress a year of business growth into a few months; and, secondly, we provide access to mentors that will enable the founder to have a far greater circle of knowledge than they have alone. There’s about 220 accelerators in the United States, and all of them do that. Most of them, including Ocean—ours—also provide a level of seed funding—a small amount of money that allows the founder to relocate and participate residentially in that accelerator, as well as enough money to keep the enterprise going. In essence, that’s—from my —what an accelerator does.

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Accelerator Capital and Convertible Notes

[04:54] Ron Gaver: Alright, then, you mentioned the aspect of capital.

[04:58] Scott Weiss: Mmhm.

[04:59] Ron Gaver: And so with the capital usually comes something on your end—there’s a bit of dilution as far as the founder’s ownership of the company, generally. Is that true across the board, or is it not?

[05:10] Scott Weiss: Well, actually, there’s a narrow range of what accelerators that provide capital get in exchange for that capital. Let’s start with Ocean, the accelerator that James and I are honored to work for. Our note, when the company accepts it, is a convertible note. It’s debt. It does not dilute the cap table. It maintains their equity ownership. And if that company raises subsequent money, the holders of the note—which is a separate guy who manages all that—determines whether or not we want to convert that note into equity at that time or simply get our money back with a modest interest rate. So that’s a very “founder-friendly” capital structure. On the other end, accelerators will take anywhere from 6-10% direct equity in the company in exchange for the capital they’re investing. That begins the dilution process for the founder, because they’re giving up direct shares or direct equity for the money.

[06:14] Ron Gaver: Well that’s good. I didn’t understand what the “convertible note” part meant. Now I understand. And that sounds like an excellent option for the founder to basically be able to pay that back if he or she so desires.

[06:27] Scott Weiss: Well, to be clear, it’s if the investor so desires.

[06:30] Ron Gaver: Oh, okay.

[06:32] Scott Weiss: It’s the investor’s choice. I’m not an investor in our fund because I work there, but if the investors say, “Hey, we really like Ron’s company, and we want to convert our debt into equity.” Boom! That happens. Or they say, “We really like Ron, but the company’s not our cup of tea. We’ll just take out money back.” And it’s money back with a very low interest rate. So the investor chooses, not the founder.

[06:54] Ron Gaver: Okay, and what did you say the dilution is, usually, on that, in your case? Or does it vary?

[06:59] Scott Weiss: There is no dilution with a convertible note. It only dilutes if it converts and the terms of the conversion are spelled out based on the amount of funds raised, so if the company goes out and raises money with an evaluation of three million bucks, and you’ve got fifty thousand dollars in seed capital from an accelerator that converts at fifty thousand, you can see that the dilution would be very, very modest.

[07:23] Ron Gaver: Alright. I didn’t understand, then. I’m sure that there are others who would not have understood that.

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Ocean’s Founders

[07:28] Ron Gaver: So, we’ve talked, just briefly, about what an accelerator is, and how it functions (at least, peripherally). Now I’d like to talk about how Ocean is different. I realize, from your webpage and from talking to you and from talking to Tim Sinclair (who went through your program), there were three founders, originally. They’re Tim, Tim, and somebody else whose name was never actually documented on that page.

[07:53] Scott Weiss: Chad.

[07:54] Ron Gaver: Those were your three founders?

[07:56] Scott Weiss: Tell you what: let me back up and just tell you what makes us different, and then we’ll jump into the story of how we got here.

[08:01] Ron Gaver: That’s great.

[08:02] Scott Weiss: Perfect. I’ll prattle on a little bit more, and then I’ll let James jump in.

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Accelerators Versus Incubators

[08:07] Scott Weiss: So, we’ve already covered in very high-level, broad strokes, what an accelerator is. The other important perspective is: there are 220 accelerators in the United States, and there are over 1,000 incubators. Let’s go sidewise. Very high-level—the difference between an accelerator and an incubator is that accelerators tend to be time-limited. You get accepted, and you get so many months in the program, and then you get out; and accelerators tend to give you money. Incubators generally have no time limit. You get in and you stay as long as you are getting value from the incubation. And, generally, you pay the incubator. Almost every university in the United States has an incubator, and students have access to it, but they’re paying for it with tuition dollars in order to that incubator.

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Ocean’s Unique Spiritual Component

[09:05] Scott Weiss: So there are 1,400 organizations out there trying to help high-tech entrepreneurs grow businesses faster, and we’re just like all of them. We’re just one of 1,400 and we think we’re pretty good (and we can talk about that later), but what makes us different—what makes us truly unique—is we are one of only two accelerators in the United States that integrate a spiritual journey with the business journey we take you on. And we do that because our focus is not exclusively on the business. Our focus is on the business and the founder, and the lens we look at it with is faith.

[09:45] James Clair: Yeah, to pop in and add onto what Scott was saying: when Scott was laying out exactly what an accelerator is, you can think of it like putting guard rails around an entrepreneur or packaging a program for an entrepreneur, to accelerate their business; not a package or a program for a business that leaves out the entrepreneur. All of our curriculum and program—its scope is centered on the founder as an individual because we understand that they have the ability to create multiple ventures that are successful. And they also have the ability to recover from a failed venture versus most businesses and products that don’t get off the ground. Unfortunately, most of them never recover.

[10:33] James Clair: So, this sustainability and life expectancy of a founder is much, much more valuable than an individual idea, and, like Scott said, our difference is that lens of faith. And you can think of it like an orientation point. So a lot of decisions are made, unfortunately, with a motivation for financial gain, as the first thought or sole inspiration. We believe that Scripture clearly lays out that God, and the disciplines and principles that He taught, are what should be our initial point of inspiration, and that financial decisions are simply a filter that we run those following decisions through. So, we don’t want to tether ourselves to our money. We want to tether ourselves to our faith and use smart, financial intellect and decision-making to forward our progress.

[11:29] Ron Gaver: Alright, I understand, and I think that I would certainly embrace having your faith at the center of all that you do and having God at the center of all that you do.

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Focusing on the Founder

[11:39] Ron Gaver: So you’re trying to focus more on the founder. Not only on the business, but also on the spiritual, the physical, the relational, and the intellectual because, you say, essentially, that the founder has a greater shelf life than any business, potentially.

[11:53] Scott Weiss: Well said.

[11:55] Ron Gaver: And then you explore the role of faith. One of your founders said that that is, arguably, the proper place for faith to be put in building the business and putting it all together, and so you’re trying, also, to build the person up, strengthen that person, and edify that person to bring the spiritual to bear on that person’s business so that that person is a more graceful founder or can more gracefully transition into that business and not burn out in the process?

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Non-Business Relationships and Stakeholders

[12:27] James Clair: Yeah, exactly, because, oftentimes, we can forget that there are non-business-related relationships at stake—most notably family, friends. So if we consider the entire amount of stakeholders that exist within an entrepreneur’s idea or their business venture, we want to make sure that we don’t exclude those relationships and the physical health that’s put at risk when a founder, unfortunately, is not tethering their decisions to the right source. A lot of people can identify with what it’s like to lose friends during a business venture, to have lost marriages, to gain weight, to go through physical ailments—a lot of people identify with that.

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Ocean’s Message

[13:17] James Clair: It’s not just the high-tech founders that come through our accelerator, and that’s also another layer to our uniqueness—that our message translates to a vast kingdom. And that’s our mission: to expand God’s kingdom; and we are looking to do it through the marketplace, or into the marketplace through entrepreneurs. But they have the ability to take that with them and transfer that to their families, to their friends, and then to future business associates, well after they’re out of their current venture.

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Ocean’s Five Capitals

[13:49] Ron Gaver: I find this idea to be very exciting because, looking at starting a business, one thing I would not be willing to sacrifice—or the things I would not be willing to sacrifice—would be my marriage, my family, and my health. My friends, maybe a little bit after that, but my marriage, my family, and my health—those are the things that God has given me to be a steward over, and those are the things that I must maintain. I have a mandate to do so, and I have a responsibility to do so. The sacrifice that goes along with losing those things is, in my mind, a failed proposition.

[14:26] Scott Weiss: We would agree. It’s also important for your listeners to know two things. We are trying to help the founder see these five capitals (and you articulated them already): [in ascending order, financial, intellectual (or ideas), physical (or health), relationships, and spiritual]—to see they have all five of these things, in different measure and at different times in their life, and the key to navigating a successful startup is to recognize that you have access to all five capitals. And while you’re watching the business, you don’t need to sacrifice your family, but you are going to impact your family. You simply will have far less time for your family. You will need to use many of your relationships to build your business, just to interview them (what do they think about your product?), to do your pitch, to ask for money possibly, to ask them to become a customer, or ask them to ask friends to become customers.

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Maintaining Balance During a Business Venture

[15:24] Scott Weiss: So, we try to help the founders understand: you’re not going to have a balanced life; you’re going to have an unbalanced life. Now, how do you enter that journey, recognizing its imbalance, and come out on the other end with healthy relationships intact? You do that by taking everyone on the journey with you, by over-communicating where you’re heading, by using the other capitals you may have in excess to feed the capitals differently than you normally would. So, while I no longer have the time for the relationships I used to have, I will have access to new learning, new intellectual development, new networks, new people—let me introduce them to my wife, my children, whoever is important in that family. So this is very much an issue of: it’s not about balanced life. It’s about understanding the impact the imbalance it’s going to cause and using the resources available to you to navigate that successfully. It’s a real important concept that often gets lost. I’m just going to carry on, so I’m just going to throw the second thought at you pretty quickly, if that’s OK.

[16:34] Ron Gaver: Sure.

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Marketplace Success

[16:35] Scott Weiss: We are very, very focused on the founder, but we recognize the founder comes to us with an idea that ignites his or her passion. They have this idea, they want to create it, they want to see this enterprise enter the marketplace and grow, and hopefully succeed, and hopefully succeed at whatever level’s appropriate for that idea. So, we don’t have a different benchmark for marketplace success.The marketplace determines success, and we strive to prepare the founders to have their invention, their idea, their product, their company, succeed; and succeed at the highest levels. We think its excellence is absolutely an affirmation of the gifts God has given you, and using your gifts to deliver excellent results is what we aspire to do. So this has helped the people understand the journey they’re on and to use all the things it’s provided to them and to navigate that journey successfully, and navigate that journey, delivering, an excellent company that delivers excellent results.

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Ocean’s Work Ethic

[17:41] Scott Weiss: So, in many ways, when we’re interviewing candidates, we try to help them understand: coming here is more work than going to most accelerators. The outcome is more enriching, more edifying, and you will leave here (if you engage in it) with awareness and knowledge and relationships that we think will serve you the rest of your life, but it’s a lot more work. It’s not easier, it’s harder.

[18:10] James Clair: Yeah, very much so. Hearing Scott brought to my mind: when God is shining a light in some of our darkest corners—many times, we can be scared, or we can be afraid of what impact and anxiety that’s going to bring to us or to the people around us; but one fruitful piece of our overall mission is that we want to change that feeling for a founder from being afraid and scared to feeling free; and that there’s freedom in identifying these characteristics and behaviors that we have as individuals and how they affect, not just our personal lives, but the success of our business. And, many times, [for] the biggest fault-line in our individual ventures, there’s a relatable behavior that’s reflecting in our personal life; and addressing those realities and really dying to them and bringing truth to what that really should mean for us is what ties together both of those pieces really well.

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Ocean’s Program Overview

[19:18] Ron Gaver: One thing that, Scott, you mentioned, “taking everyone along on the journey”—and I think that that’s a great concept—how do you implement it, though? Do you use it by talking to people more, by demoing your product—is that what you said? By basically involving them as much as possible in this whole process with you? Is that how you do that, or can you elaborate a little on that?

[19:39] Scott Weiss: Sure, I think I can. Let me paint a pretty clear picture, and this will take just a few words and then I’ll pause and answer any questions.

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Demo Day and Business Curriculum

[19:48] Scott Weiss: The Ocean program—once you arrive, it’s a four-month program and then demo day occurs and then there’s one month following demo day that we’re all together. And accelerators, while they do the same thing, do it differently; and one way to look at accelerators is there are very unstructured accelerators (you get in and you have access to a bunch of mentors and advisors and customers, and you’re kind of on your own), or you have structured accelerators. We are a structured accelerator. So, the companies arrive, and we have laid out a curriculum that starts everybody at one level and takes them up through, and past demo, day; and it’s a business curriculum that’s built on the business canvas map that really gets them focused on what value they’re creating in the marketplace, validating that value, and getting out there and testing it, and then generating revenue off of it.

[20:44] Scott Weiss: We have a variety of speakers that come in and talk about that, and entrepreneurs who have both succeeded, and many of whom have failed (or failed once or twice and then succeeded); and they just come in and tell their stories that supplement whatever concept we are focusing on that week. So that’s the business curriculum, and every week there is a speaker on the business side of it to prepare the knowledge base of the founders to accelerate—to run their business more effectively and to grow faster.

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Keynote Speakers – Day One

[21:16] Scott Weiss: So let’s say it’s day one. The very first speaker we had this last year happens to be a venture capitalist who drove over (about six hours) and taught a session on: what is the mission of your company? He taught very well. He’s taking them through questions and answers, and he’s really engaging, and then he kind of stops and he says, “You know, I’m on my third fund.” (Which means he’s succeeded. So he’s been able to raise money three times—it’s now many, many millions of dollars in funds.) “And I have this many analysts who work for me. And I personally hear 300 pitches a year.” (I think is the number he said—maybe it was 500, I forget.) “And you will never get to me to give me your pitch unless you can answer the question: ‘What is the purpose, the mission, [and] the vision of your company?’ And I’m not looking for an advertising slogan. I’m looking for the insight and depth that communicates to me that you have found something that uniquely will add value in this world.”

[22:20] Scott Weiss: And then he unfolds all of the worksheets he and his analysts use to determine that. So you’re sitting there, day one, and you’re hearing a live, venture capitalist give you the answer to the quiz. How do you get them to open the door and talk to you about your idea? You tell them the vision and mission of your company in great depth and in a way an investor, or potential investor, can understand it.

[22:44] Scott Weiss: That’s kind of day one. They all go out to lunch. They have a great time. They come back. And day one, I had a creative director from a local studio there, and he led a session that he called (I think it was a “he”), led a session on, “I believe in God, I believe that God’s a creative force, and I believe God wants me to create, and that’s what it means to be in God’s image.” And all that he talked about was his personal faith journey and how God had come alive in him and given him the courage to step out and create these incredible visual images that multiple clients pay for.

[23:21] Scott Weiss: That’s it. That’s day one.

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Keynote Speaker Discussion – Day Two and Beyond

[23:23] Scott Weiss: And the next day the companies all come back in, and I walk up to the front of this great co-working space we have, and it just happened to be my turn, and I say, “Okay, let’s talk about the venture capitalist.”

[23:34] Scott Weiss: We begin getting all these companies—there were nine of them, so there’s about thirty-five people in the room—processing through what the vision and mission of their company is. They’re jumping on Google. They’re looking stuff up. They’re just busy little beavers. And I let that go for about ten minutes, and then I say, “Wait a second. What does any of that have to do with the guy in the afternoon?” And the room just explodes. So half the companies will say, “It has nothing to do with it.” And half of them will say, “It has everything to do with it.”

[24:02] Scott Weiss: And the way we drive integration is we then just process that discussion and then have, over the balance of the week, three or four more speakers come in and speak to the exact same thing, but more and more overtly on how understanding what God wants you to do may have an awful lot to do with the vision and mission of your company; and we replicate that each week, in a different way and more creatively, to get the companies to begin integrating this concept of: “I’m on this journey called life, and I happen to be creating a company; but God has a plan for me in this journey called life, and how do I put this together in a way that honors Him and maximizes my meaningfulness on this earth?” So let me unpack it a little bit more because that’s an awful lot to swallow, and you’re sitting there saying, “Geez, how do they do that?”

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Ocean’s 2017 Program Plans

[24:53] Scott Weiss: Next year, what we’re going to do is—because we think, “Ok, that worked really well”—but next year, when the companies arrive the very first week, instead of sitting in Cincinnati and going to our great co-working space and starting this, we’re taking them all off to a local park. We’re getting everybody a room in the lodge, and we’re going to spend three days getting personal and intimate about: “Where are you in your walk with God?”

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Ocean’s Policy on Faith

[25:20] Scott Weiss: We do not select based on your faith. We’ve had Christian believers in the accelerator. We’ve had non-Christians. We’ve had seekers, people who say: “I think I’m an agnostic or humanistic. I’m not really sure. I’m trying to figure this all out.” We’ve had all different religious faiths from the Christian side. We select based on your willingness to go on this journey, and we’re very clear, while we respect where you’re at, understand: the journey we’re laying out for you is from a Christian perspective. We all believe that’s a source of great truth for all of us.

[25:54] Scott Weiss: So, we’re going to take them out for three days We’re going to have multiple workshops leaders come in. We’re going to have all kinds of exercises, and begin unpacking: “Where are you? Where are you in your walk with God? Are you having one? Are you not? How does that manifest itself? What do you believe?” Then we’re going to come back and do all this business/faith stuff.

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Faith as a Component of Business

[26:12] Scott Weiss: Then, about two months later, we’re going to go away again, and on that weekend sojourn, we’re going to say, “Here are the biblical truths, the biblical principles, we’ve been talking about. How are you going to apply those—if you choose to—in your business?” And we have taken the time to unpack key biblical truths into business principles, and almost all businesses in Judeo-Christian cultures use biblical principles in running their business. Love others as you love yourself. Treat others the way you want to be treated. Treat the customer the way you want to be treated. We get them to unpack that and to write out their objectives for their company so they have specific goals for the culture and company they’re trying to create.

[26:59] Scott Weiss: Then we come back, we get through demo day, and then we’re going to take them off again. Now they’ve met all these investors, they’ve had this launch. What are they going to do all this as they leave us and launch into the world? How’s this all going to come to life in how they’re going to run a company based on biblical principles that, hopefully, has great commercial success? So it’s an intense, fun, creative process that involves literally dozens and dozens of people, willing to give of their time and talent, who come to us from all over the country to help make this possible.

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Ocean’s Program

[27:32] Ron Gaver: You’ve gotten into some of your program—the actual functioning of the program, month-in/month-out, day-in/day-out, week-in/week-out—and there’s one graphic on your website that is a circle with the formal program in it and you have monthly events, weekly events, and daily events. Could you go into a little bit about how that program works?

[27:53] Scott Weiss: Absolutely.

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Weekly Program – Speakers and Workshops

[27:45] Scott Weiss: The weekly events are the series of speakers that I outlined. Every week, we have someone come in and lead a workshop on a business topic that’s aligned with accelerating high-tech companies. We have a speaker come in every week and lead a session on a faith topic, and then every week we have a workshop that integrates them. Every week we have at least one, but generally two, guest speakers for something we call “coffee chats,” and these are founders, these are people who’ve started businesses. Last year, we had a founder from Israel drop in. We’ve had a major leader from Google drop in. We have all kinds of local entrepreneurs. A young man who’s been on shark tank came and talked, and they just tell their story. And we tell them, “This week we’re talking about this business topic and this faith topic.” And they tease out of their story something that’s occurred to them that exemplifies either or both of those topics.

[28:48] Scott Weiss: Every week we do a community meal. We provide soup (I love soup), and we’ll have all the founders there. Their families are invited. All the mentors are invited. We’ll have all the lawyers who volunteer for us. We’ll have 30-50 people every Friday for a big community lunch and soup, which forces you to sit next to somebody and drink or sip out of a bowel. So, it gets everyone talking, and suddenly we’re not in an accelerator anymore; we’re just doing life. Every week we’ll have optional participation in a Bible study. Every week we’ll have optional physical activity.

[29:25] Scott Weiss: Daily, we ask each company to journal. We post a journal question up on the board—we’re going to do that differently next year—and the journal question is very much against their faith walk, very much is taking them on a guided journey of questions that, if you went back and read all the answers you wrote to these journal questions, you’d have a pretty interesting diary or chronology of ever-deeper growth and understanding.

[29:52] Scott Weiss: And then, about two weeks into the program, every week we practice pitches on a stage, with microphones, with slides, leading up to our demo day, which is probably one of the highest-attending demo days in the United States in terms of physical audience size and streaming audience size. So, we do the combination of all those things to make the program entertaining, engaging, creative, and fun.

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Syncing Program Behavior with Business Life

[30:20] James Clair: Yeah, it’s important to have those different layers because we want the program to reflect how we live life. There are routines and there are rhythms that we don’t do every day but that we want to make sure we prioritize, and that we make space for, as we go through the journey of the program. So there’s a key reflection in what we do outside of our businesses and what we do in life, and we put that into the program so then that way, if you don’t have a very good rhythm or routine with spending time journaling or in Scripture every week, we want to almost kick-start that rhythm for you, so that when you leave the program, you’re going to take that behavior with you. Same thing with the encouragement of physical fitness, and then encouragement of getting in a small group and discussing your faith or Scripture.

[31:15] James Clair: Especially when you’re in a format like we are, we find that routine to be very beneficial because they’re also naturally integrating what they’re currently going through in their companies into whatever topic we’re discussing in the Bible studies. So, the program—although it looks very cool and it’s laid out (we’ve got monthly, weekly, daily)—we could easily eliminate whatever words we put in there for those bubbles and put rhythms and routines in our daily life, and it would make perfect sense to a lot of people.

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Ocean’s Field Day – The Importance of Customer Dialogue

[31:47] Ron Gaver: Okay, so the cornerstone of the program is the faith aspect of it, and, of course, you bring in the other speakers who talk about more technical, business-type aspects, and then, on the monthly events, you also get into legal, investment, leadership, and something called “field day.” I’m not sure what that is.

[32:05] Scott Weiss: That’s just getting people out to validate their idea in the marketplace. The number one cause of high-tech failures is people fall in love with their own idea and actually never talk to anybody in the marketplace about it; so whatever they’re working on (whether it’s B2C or B2B), we line up time, space, and interviews with the right audience to validate their idea.

[32:25] Ron Gaver: Alright. In the Lean Startup vernacular, something like, “Get out of the office.”

[32:29] Scott Weiss: Exactly. That’s exactly what it means. Get out in the field, and go and talk to customers. It’s a big principle we teach: to constantly listen to the marketplace.

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Relocating as a Founder with Family

[32:39] Ron Gaver: Hypothetically, let’s say I’m a founder. I’ve been accepted and you’ve made the convertible note available to me, and I’m relocating to Cincinnati for the four-to-five months—well, five months, including the month after demo day—and I’ve got a family. How do the founders usually negotiate that with their families? What do you usually see happening there?

[33:04] Scott Weiss: That’s a great question. So this past year—our program runs January through May, so we just had our bon voyage party for this year’s class—this past year, there are nine companies that got accepted. We take anywhere from about eight to twelve. It’s hard to get in. There are hundreds of applications that get boiled down to the people we offer to. Of those nine, five were from outside the Cincinnati region. Two of those were from Europe and relocated from the United Kingdom (both were from London, coincidentally) to Cincinnati. One was a single person (and her co-founder popped in and out), and the other was a married gentleman with a wife and two children.

[33:48] Scott Weiss: The “spouse with children” is a common story from people relocating to Cincinnati or in Cincinnati. About half of our founders tend to be married with family. So, we go through all this in the interview process. We want to understand their game plan.

[34:04] Scott Weiss: When that individual arrived, we had reached out to our network and we had already lined up twenty or thirty rental properties of people willing to rent to him on a short-term basis. He, from London, envisioned his family being here on two separate times during his five-month sojourn (so they would relocate for an extended period and then they would go home); and then he would fly back and forth from London twice and spend a week there and Skype in or stream in and participate in the program that way.

[34:36] Scott Weiss: So we helped find housing at a very favorable rate. We then worked with a non-profit that gives away automobiles, and they gave him a car. He’s going to give it back to us when he’s done, and we’ll give it back them, but he had free use of a car for his duration, as did the other person from London (as would anybody relocating here who doesn’t have a vehicle—we would arrange that). And we lay this all out so, when they get here, we know how their family’s going to navigate it, they know how their family’s going to navigate it. When that individual’s family showed up from London, we also had arranged families of our mentors to take time out of their lives, show them Cincinnati, invite them over to their home, take them out to dinner—without imposing, giving the family time, but still being welcoming. That’s how we do it.

[35:24] Ron Gaver: Showing them great hospitality.

[35:26] Scott Weiss: Exactly.

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Ocean’s Ideal Company and Founder

[35:27] Ron Gaver: Now as far as the type of companies that you look for: do you look for any specific type of company—or the one speaker that you referred to last year was looking for people who could clearly articulate their mission—is there a particular type of mission that you focus on when you’re selecting applicants, or is it basically just whatever floats up to the top?

[35:53] Scott Weiss: We’re very focused on the industry being high-tech because you can accelerate a high-tech company. If we’re making fans, you can’t accelerate because you’ve got to cut molds, you’ve got to make the product, and you have to test the product; but high-tech is coding so we can accelerate. They have to be high-tech. The product has to be at or beyond the MVP stage (minimally viable product stage). We don’t like to start with companies before then because it’s too hard to get them ready for demo day.

[36:22] Scott Weiss: There has to be at least two founders. We won’t take solo founders—it’s just too hard. And they have to be willing to [take], and seeking, this spiritual journey; and we sort that latter piece out in an extended interview either live or via Skype. At this point, we’ve done dozens and dozens and dozens of these, so we have a pretty keen sense when someone’s being honest and sincere in their answers and when, perhaps, they’re just saying they want to do that so they can get in and get the money. So that’s kind of what we look for: high-tech, at least two founders, willing to relocate, product at or beyond the MVP stage, and a sincere and open heart to a spiritual journey.

[37:03] Ron Gaver: And you also prefer one of the co-founders to be a technical founder, I believe?

[37:09] Scott Weiss: We skew that way, just for practical reasons, although we’ve taken about a third of the companies where neither was a technical co-founder, but they were able to resolve that issue through outsourcing or hiring a CTO. Chances for commercial success are higher if one of them understands coding and can actually build the product.

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Ocean Capital

[37:29] Ron Gaver: As far as Ocean is concerned, the accelerator itself is a non-profit organization and then there’s Ocean Capital as well, which is basically the financial end of it.

[37:38] Scott Weiss: Correct. That’s a separate legal entity that, under IRS rules, is an SPV (special purpose vehicle), which means it collects money from a broad range of diverse investors, and its job, as a legal entity, is to track the flow of money so that, when those investors get a return, that they can be properly taxed. The entity itself doesn’t make any profit. It doesn’t lose any. It collects money and puts it into convertible notes for the companies.

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Ocean’s Origins at Crossroads

[38:07] Ron Gaver: And as far as Ocean, the accelerator, the non-profit side of that—it grew out of Crossroads (the church), and then an organization within Crossroads called Unpolished, which I believe was a group of business people getting together and talking about business, and then they wanted to do something more. Is that correct?

[38:26] Scott Weiss: That’s a great story. Unpolished is a group within a large church—very vibrant and active community in Cincinnati called Crossroads Community Church—and this group had coalesced and formed and was meeting monthly and providing speakers; and they’re sitting around one day, brainstorming (it’s a small leadership team): “What else can we do?” And three of the participants in that were high-tech founders—had all founded high-tech companies, and one had had a successful exit (had started a company, grew it, sold it, and was now starting another one)—and those three articulated that the path for a high-tech founder is arduous and fraught with risk and often results in significant damage to health, relationships, and faith, which James talked about earlier. So they said, “Let’s start an accelerator. Let’s create an accelerator that approaches it differently—that focuses on the founder, with this lens of faith we’ve been talking about all afternoon.” And the larger group and the church said, “That’s a great idea!” And Crossroads very generously kick-started the entire campaign with a donation that allowed for the conversion of this old warehouse space into a fantastic co-working space. So that’s how it all started.

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Ocean’s Financial Support

[39:41] Ron Gaver: You say they kick-started it. I read somewhere on your website that they did it with a 2014 Beans and Rice Week?

[39:49] Scott Weiss: They do a really interesting fundraiser where, every week, they ask their entire community to take on a third-world diet, which is largely vegetarian and beans and rice, and to contribute the difference they would spend normally for food (dining out, buying a first-world diet)—to calculate that and contribute that to Crossroads. Crossroads collects that money, which is a large sum—the first year was like $350,000, last year was $700,000—all of that money, a hundred percent, goes outside Crossroads to support a variety of partnerships or programs, that don’t have any relationship with Crossroads, around the world. It supports building schools in Nicaragua. It supports Ocean. It supports paying to have public swimming pools open in the greater Cincinnati area in a year when the city didn’t have any money to keep the pools open. So they give that all away and we were the very fortunate beneficiaries of some portion of that the first year.

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Ocean’s Mentors

[40:48] Ron Gaver: Then as the founder arrives—we’ve talked about family accommodations, and that’s something you call concierge, but there’s also really a package of things that you do. We’ve talked about seed financing. We’ve talked about the unique, five-month curriculum with all that that entails. A couple of things we haven’t gone into too much: first, your mentors. You say you have a great pool of mentors, and I’ve seen on your webpage a bunch of pictures of all the different mentors. Could you kind of give a characterization of your cadre of mentors—not necessarily saying “this person, this person, this person,” but the type of people that come and support and want to be a part of this?

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Role of the Mentor

[41:29] James Clair: Yeah, that’s very much the guardrails of the program. We introduce a very diverse mentor—I should first say, we identify and address a very diverse mentor pool—and our goal is to educate them as to what it means to be a mentor in an accelerator space, and what it means to be a coach in an accelerator space where you have nine founders (like we had this last class) but 100 mentors and coaches. Obviously, ten mentors and coaches aren’t going to meet with every founder every week—the capacity of that doesn’t make sense—but it’s the right person at the right time, and that’s where we come in, where we say, “This entrepreneur is at place X, and that’s perfect alignment with this mentor that we have in our pool.” So we’re going to introduce them, and we believe that that mentor is going to help shape [the founder] or help put that founder back on track—or you could even say “introduce a discipline” that will help put the founder back on track—[or] share life experience, and don’t let me make it seem like it’s just business.

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Mentor Demographics

[42:36] James Clair: These mentors have voiced that they’re really passionate about sharing their faith journey and their faith story, just as much as their business successes and even business failures. Our mentor pool—they’re not just diverse in the sense of demographically but geographically. Scott has mentioned different mentors and speakers coming in from Israel or East Coast or California, Silicon Valley, the South. That aligns perfectly with our mission of Kingdom expansion globally, and our program speaks to a lot of people, not just in Cincinnati, not just in the mid-West, but [as] we’ve seen in our applicant pool, in the UK. It speaks to people in Europe. It speaks to people around the globe. We want our mentor pool to be capable and ready, and we want to arm them well enough that when we introduce them, our founders are going to benefit from that exponentially.

[43:33] Scott Weiss: So I would just add, Ron, the mentors will break into two broad groups. All of them want to share their personal life story, their faith journey, and they break then, subsequently, into two groups. We have a large group of subject matter experts—accountants, marketing, product developers, project managers, legal—and then we have a smaller group of people who have started businesses and understand the journey. That smaller group tends to form an intimate, one-on-one relationship. One person from that smaller group will end up being with one of the companies for the whole five months. They’ll be there every week. They’ll have them over their house for dinner. The person who has started the business has the time, the energy, and the maturity in their faith to be able to kind of wrap their arms around a company and be a truth-teller—not to run the business, not to tell them what to do, but to listen and give them honest feedback. Everyone else tends to cluster around tasks, as James pointed out, and we tend to pulse them in and out based on their subject matter and where each company is on any given week.

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Partners

[44:49] Ron Gaver: In conjunction with that, you also have some partners—some business partners, law firms, banks, Crossroads itself, an organization called 805 Creative (which is a design and creative production agency).

[45:02] Scott Weiss: Yep. Companies all get free legal advise the whole time they’re in the program. That’s a combination of the generosity of the University of Cincinnati Law School, which provides legal fellows, and they’re supervised by a local law firm. Last year it was Frost Brown Todd, and it’ll either be them or another great local law firm next year (there’s two law firms that want to do that). And then all these other business partners line up, and they’re very clear: “We will donate this much time.” So the lawyers just said, “We’ll be your lawyers.” Each studio says, “We’ll give you 20 hours.” And, when we line them up with the company, we say, “Okay, you’re asking this agency to do some work for you. And at 20 hours, the clock starts running and you’re paying for it, so let’s get really focused so you can get done what you need done in 20 hours.” That’s what we coach them on doing.

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