Target is looking for an accelerator
Start-ups looking to revolutionize retail have a significant new opportunity for support.
Target Corp. is officially kicking off the application process for a new retail accelerator it is launching in 2016 in partnership with Boulder, Colorado-based start-up accelerator Techstars. Target and Techstars will accept applications for the accelerator, which will be based in Target’s headquarters city of Minneapolis, through March 2016. Selections are expected to be complete by April or May, with the accelerator lasting from June to September.
Target has signed a three-year agreement with Techstars which will include three rounds of start-up development and funding. In an interview with Chain Store Age, Target spokesperson Jenna Reck said the program sprung from efforts initiated by Target chief strategy and innovation office Casey Carl.
“We’ve had a dedicated innovation team for a couple of years,” said Reck. “Last year, Carl accelerated the work of the team and this spring hired three entrepreneurs-in-residence (EIR) who are experts in areas such as digital and brand-building. They were charged to create business and drive new growth for Target.”
West Stringfellow, digital EIR for Target, recommended that Target launch an accelerator program and partner with TechStars based on its 90% success rate. Goals of the program include creating a new community of innovators in Target’s backyard.
“We want to help build a start-up and tech community in the Twin Cities,” said Reck. “After participating in an accelerator, at least half of start-ups usually plant some type of permanent roots in the city where the program took place.”
In addition, Reck said the accelerator project fits into Target’s larger turnaround initiative.
“We’re on a path to transformation,” she said. “By brining start-ups into our headquarters we can learn from them and see how they work. Start-ups are quick, scrappy and resourceful.”
The accelerator will initially select 10 startups, as well as a team from Target. Selected startups will receive financing, mentoring and business development tools.
Specifically, this will include an offer of $20,000 from Techstars for 6% equity in the company, with the option to take up to another $100,000. Target may also offer to invest in or purchase start-ups, but that is not guaranteed. At the end of the program, media and investors will be able to see public demos of the start-ups.
“We don’t know what we don’t know,” said Reck. “We want to leave things open-ended.”
Target says it will consider all types of startups, including those that provide behind-the-scenes software as well as customer-facing systems or products. Start-ups will be allowed to work with other retailers besides Target.
Mentors will include Carl and Stringfellow, as well as Target executives Jamil Ghani, VP of enterprise strategy, and Jason Goldberger, president of Target.com and mobile.
Stringfellow previously served as chief product officer of Bigcommerce, and has also held several senior director- and director-level positions for PayPal and several product manager roles at Amazon.com. In a Target blog posting, Stringfellow said the most important start-up aspect Target and Techstars will look for is team. Other factors for consideration include the market being targeted, progress that has been made, and strength of idea.
“A great team can change an idea and still succeed, but a mediocre team will struggle to execute on even a great idea,” said Stringfellow. “We look for people who can execute quickly, are coachable and listen well, are thoughtful but make fast decisions, are intellectually honest, are persistent, follow through and are insanely passionate about what they do. We’re looking for rock stars.”
Target has operated its own innovation center in San Francisco since 2013, and many other large retailers also have their own dedicated internal innovation programs. Reck said Target has about 50 total members of its innovation team, based both in San Francisco and Minneapolis.
“The accelerator will be complementary to the innovation team,” said Reck.
When asked if Target’s inclusion of an in-house team is a sign the retailer might be considering launching its own technology companies or products, Reck said there are currently no plans to do so. However, she clarified that at this stage, Target primarily seeks to discover more about how start-ups create and drive innovation.
“The goal is to have the in-house team work hand-in-hand with the start-ups and learn from them,” said Reck.
Target is upping the innovation ante by looking outside the company to help develop start-ups it will not directly control. By focusing on the best ideas it can find anywhere, rather than on the best ideas it can internally generate, Target is poised to help advance retail innovation both inside and outside the company.
Apply to the Target-Techstars retail acceleratorhere.