Inside Target's City Center offices, the sound of hammers and drills are a frequent reminder that the retailer is in the midst of some big changes. Among them is that the company's Minneapolis headquarters will soon become a temporary home for 10 retail start-ups as part of the company's partnership with Techstars, a respected accelerator program.
The six-month application window closed last month. And the results were impressive: more than 500 start-ups applied to be part of the inaugural class, including firms from 45 countries with ideas that ranged from connected toys to virtual fitting rooms. Ryan Broshar, a prominent figure in the Twin Cities start-up scene who is the managing director of Target's Techstars program, and West Stringfellow, the Target executive who founded the program, are now going to help pare it down to the final 10, who in June will move in for the 13-week program.
In the meantime, Target is building out an 8,000-square-foot space to house the start-ups. As they walked around the space, Broshar and Stringfellow pointed out some highlights, such as the wall that mentors and investors will sign when they visit and the open space in the middle that will be filled with desks and couches. Start-ups will be able to get some more privacy in eight conference rooms being built.
While they were at it, Target decided to relocate its innovation team to sit next to the Techstars program. Although they will be separated by glass walls, they will share some common areas such as a kitchen and some hangout areas they hope will lead to some natural, spontaneous relationship-building.
"It's a productive collision that you wouldn't get if you were off site or had to schedule a meeting," said Broshar. "That's going to be huge."
It's a space, Stringfellow added, that the start-ups won't have to feel pressure to move out of right away after Demo Day at the end of the program, scheduled for Sept. 20 at Orchestra Hall. After all, he noted that one of the purposes of the accelerator is to keep some of those start-ups in the Twin Cities after it's over.
"The extent that we give them more time to find their feet and their groove here, the better for them and the city," he said.
Q: So the deadline for applications was last week and more than 500 start-ups applied. Is that about what you were expecting?
Ryan: It was probably twice as many applications as we expected, especially for a first-year program.
Q: You went on a road tour holding info sessions about the program in various cities. What was the pitch to the people on the West Coast — in Seattle and San Francisco — who are already in start-up hubs?
Ryan: It's not just another accelerator where we promise some money and some nurturing. If you are a retail start-up anywhere in the world, there is no reason you shouldn't be thinking about applying to this program because there's going to be exponential value given to your company and that is specific to retail. Our mentor base is very specific to retail. And obviously we have the Target backing and the whole momentum behind that. I think a lot of people recognize that sea change in where Target is heading and they want to be a part of that.
Q: Were there certain parts of the country where you saw more applications from?
Ryan: We had a lot of East Coast applications. We had quite a few applications out of New York, primarily around fashion, style. There's also a density of start-ups there. But we really did get applications from all over the country — Pennsylvania, Indiana, you name it. So the word got out.
Q: What will be the most important criteria in paring down the list?
Ryan: The No. 1 criteria will be who the team is and who are the founders. That's going to be a huge differentiator, especially when you get down to all of these amazing companies. … We're looking for tenacious, bloodthirsty entrepreneurs looking to change the world regardless of whether people say they are crazy or not.
Q: How big of a factor will be whether Target sees value in partnering with the start-up?
West: For us, it's more about how much we can help them and how certain we are that we can truly help them accelerate. If we can't help the companies but we can help ourselves, we're doing everyone involved a disservice.
Q: Techstars is known for its strong network of mentors. How do you match them to start-ups?
Ryan: We go through a process called mentor madness, which is essentially like a speed-dating event with all of the mentors meeting with all of the companies and then they cross rate each other based on fit. Then we do a matchmaking process where basically each company gets four to six assigned mentors.
Q: Target may invest in some of these companies, too, right?
West: That's the theory. We're not promising anything. We're not committing anything. … A reason for us to start the accelerator was to identify early-stage companies that might be material to Target's growth strategically or in other ways. But that's not the primary reason, which was learning how to take the lessons in how Techstars accelerates these companies and apply it to our own programs.
Q: In addition to the 10 start-ups, there will also be an internal Target team that goes through the accelerator, right? Talk about that.
West: When we started the partnership, one of the things we really wanted to make sure we get out of year one was the learning of how to accelerate core Target concepts. Over the course of a year, it's been fantastic to see how many concepts we could potentially leverage. … It's not about getting people to apply. We're doing a selection process because, candidly, if we opened the door to applications, it would be everyone and their projects. We're trying to map very carefully which project will benefit the most from the learning, discipline and collaborative environment. … But we don't want to stop work right now and say 'Hey, just wait until Techstar starts.' It's about finding something that fits in from a timing perspective.
