Target +Techstars welcomes second wave of startups
- Startup accelerator Target + Techstars on Monday kicked off the first day of its second annual summer program, which welcomes founders from 10 startups from around the world to temporarily relocate to Minneapolis for a 13-week program to cultivate ideas intended to shake up the retail industry, according to a Target press release.
- This year, the participants range from a meal delivery kit company to an online tailor service, including: Air Tailor, Bybe, Kokko, Local Crate, Savitude, Shopturn, SpotCrowd, StoryXpress, Upsie and Find Me a Shoe. The startups will showcase their development on demo day in Minneapolis on Oct. 11.
- The program is structured in three monthly chunks and covers mentor engagement, execution and fundraising. Of the 150 mentors, 50 are Target executives at the VP level or above, including CEO Brian Cornell, Chief Merchandising Officer Mark Tritton and Chief Human Resources Officer Stephanie Lundquist. Other mentors include founders of startups and innovation and business development executives from major retailers like Best Buy and Disney.
Last year, Target + Techstars companies collectively raised $32 million post program, and eight of the 10 companies went on to work with Target on pilots or in some other way. But nothing is guaranteed, Ryan Broshar, managing director of Techstars Retail, told Retail Dive on Monday. “There’s a lot of learning to be done,” he said.
Broshar, who has spent the last six months recruiting talent and selecting this year’s participants said he was looking for a diverse mix when it comes to company type and founder background. This year, the group includes two companies from India and one from Belgium, and 70% of the startups have a female or a racially diverse founder, he said.
“The main takeaway with our program is the sense of scale. The difference in scale between startup and a fortune 50 retailer like Target is there’s a huge gap there,” Broshar said. “It’s hard for startups to fathom the scale of Target, and it’s hard for Target to learn how to work with a team of four from a startup. We aim to bridge that gap and set up some meaningful relationships.” One of the biggest benefits for Target is getting an inside look at the “secret sauce” that produces value and drives change, he added.
The accelerator is now just one of many looking to cultivate businesses that have the potential to disrupt the industry and help retail stalwarts like Target. Late last year, Amazon announced a $100 million Alexa Fund called the Alexa Accelerator to boost conversational commerce startups and in March, the Retail Industry Leaders Association and professional services company Accenture teamed up to launch the (R)Tech Center for Innovation just weeks before Walmart debuted its retail technology startup incubator Store No 8. In June, Ikea launched "Ikea Bootcamp," which allows participants to access IKEA’s prototype shop, test labs and innovation development resources.
As retail continues through a transformational period and many struggle to restructure finances and engage with customers in a fresh way, innovation is critical, Broshar told Retail Dive in February. "I think it's important that retailers continue to budget and put priority on the innovation stuff. It's really easy to get away from it when things are bad, but continue to have that be a priority because turnarounds don't happen from doing things incrementally better," he said. "Turnarounds come from doing something really risky right, and really exponentially different from what is happening today."
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