Leveraging external ressources is crucial for high tech hardware startups. Especially network is invaluable. This is why we have made network and constant challenges corner stones of Scion DTU’s accelerator program for hardware startups Danish Tech Challenge. We ran the program for the third time in 2016 and received more than 60 applications out of which we chose the 20 best.
Danish Tech Challenge (DTC) is a huge success. The evaluations of the first two runs of the program show, among other things, that almost all of the participating companies, who completed the program, are still in business. This is remarkably better compared to the average new company in Denmark, of which over half are gone after three years.
Furthermore, we can conclude that the companies have raised more than one hundred million Danish Kroner (+14 mio USD).
Will we scale?
Despite all the above, it is far from sure that the approx. 60 companies, who have been through Danish Tech Challenge since 2014, will end up generating lots of industrial jobs, which is the main purpose of the program.
It is both a difficult and slow process to develop high tech hardware. Companies have to make prototypes throughout the entire process, test them, redefine the product design etc. This is not a trivial process.
Even after finishing the product, the production itself has to be improved and optimized. Once the company is mature and running, it is still more complex than a company delivering services and it-solutions.
When companies are chosen to participate in Danish Tech Challenge, they are nowhere close to being ready to scale. They are at a stage, where they have to explore whether they have anything to scale at all. This exploration is a good exercise, which takes precedence over talking about creating jobs.
The companies are constantly challenged on their assumption and assisted by consultants from Scion DTU and mentors with proven business experience. This ensures that their business ideas are tested on their potential and that the participants learn as much as possible as quickly as possible. And so they do, according to their own statements.
The majority of the participating companies state that Danish Tech Challenge has helped accelerate the development of the company to “a high degree” or “a very high degree”.
The network is free but invaluable
A key asset for the companies, participating in the challenge for 500.000 Danish Kroner awarded by Industrien’s Fond, is the network they build within a few months.
During the course of Danish Tech Challenge, the participants build invaluable relations with their peers as well as their mentors and potential investors, who guide them in regards to financing. They become much better at finding out how to raise money from various funds and private investors, which is vital for them in order to grow into independent healthy companies.
On top of this, the participants are acknowledged among investors and entrepreneurs outside Scion DTU and Danish Tech Challenge due to the fact, that the program is regarded as being extremely tough and only the best are given the chance to enter. Simply; it’s only companies with real potential that make it through.
Part of the backbone
Danish Tech Challenge has been established in order to encourage and help qualified entrepreneurs develop advanced high tech hardware as well as help the strongest survive, grow and become “real” companies.
All the participants have that potential. They all have the potential to become part of the group of good solid medium sized companies which is the backbone of Danish industry.
We hope to see many of the participants in Danish Tech Challenge succeed in the long run.