If I might creatively paraphrase Jason, Spark is a giant middle finger to all them risk agnostic VCs and competition-hopping angel investors that never write cheques.
SPARK creates lots of companies and puts money ($15-75k) into them. They’ve seeded 13 right now, but they are planning on getting to 20 by the end of 2013. Sounds a lot like Rocket, from where I’m standing, but Bastian and Jason try to persuade me otherwise (Soundcloud audio clip above).
“It’s not really Rocket-ish”, Bastian says. “To even setup a startup in Nigeria, you need an endless amount of money for electricity, cars, internet, HR, legal, and all kinds of other expensive shit. We take out all that company-like stuff and let them focus on execution”.
So, the idea is to integrate core business process AND expenses across all child companies. In real life that translates into 13 and counting companies that share the same house, electricity, internet as well as HR, legal and accounting.
Leveraging shared resources and infrastructure results in significant economies of scale and efficiency gains. Genius strategy, even if it isn’t exactly original — this is a startup accelerator afterall. But all the “one-house” stuff taken with what we know of these two business masterminds makes me wonder if Spark’s people really entrepreneurs in the true sense of the word. I mean, are they glorified lackeys…employees with an honorary CEO badge? Are the companies independent in terms of strategic direction, or are they just products? It’s hard to think about Mark Essien (Hotels) as an employee, but I don’t know about the other guys. Bastian says that is nonsense. Up to you to decide what to believe.
On the whole, I think you’ll find the interview an interesting conversation. Just under 14 minutes, in which Bastian (mostly) explains Spark’s raison d’être, and how the setup works.
Finally, Bastian says that if you ever want to join the dark side…er sorry, the SPARK side, like my very good friend Mark Essien…all you have to do is send them an email. Just as long as your startup isn’t an idea on a piece of paper, or a powerpoint, you might have a shot at their almighty benevolence.
