In October, Cleveland Clinic and JumpStart announced a partnership with Silicon Valley’s renowned Plug and Play Inc. to bring a new biotech and digital health innovation accelerator to downtown Cleveland.
Headquartered in Sunnyvale, California, Plug and Play is one of the world’s best and largest accelerator programs. As they prepare to expand to Northeast Ohio, we sat down with Founder and CEO Saeed Amidi about his own entrepreneurial journey, how Plug and Play’s model is different from other accelerators and what makes Cleveland a great home for startups.
Saeed, you and your family have a very interesting entrepreneurial journey of your own. Tell us a bit about how you got started, how your business shifted into the tech space and how Plug and Play came to be.
I come from a family of entrepreneurs—we had several businesses in Iran before the revolution. When we came to the US, we arrived in California and bought a building in Palo Alto that we like to call the “Lucky Building” because it had Google, PayPal and Logitech in it. It was great to rent space to these startups, but we wanted to play a larger role in their success through investing, introductions and mentorship.
We were fortunate to have an opportunity to invest in PayPal as we negotiated a full year of rent in the form of an investment. That was a good investment as it was sold to Ebay, but we missed some opportunities along the way—Facebook and Airbnb to name the two most notable. We were inspired by the people we met at the Lucky Building and decided to build the idea into something bigger, and that is where Plug and Play began. We purchased the space we are in today, which was originally the Phillips Semiconductor building in the heart of Silicon Valley. Now, we have 180,000 square feet with over 400 startups under one roof.
What differentiates Plug and Play’s model from other accelerator programs? What makes corporations so interested in partnering with your operation?
Our key differentiator is the strength of our corporate partnership network—we have more than 220 of the world’s largest and most powerful companies directly integrated into our industry-specific startup accelerators. Not only do we not take equity for a startup being in a program, but we also put them into private pitch sessions with the key decision makers at the corporations—lining them up for their first big clients. This saves them hundreds of hours of work and allows us to see which startups are a good investment match for us.
Our guiding principle is that innovation should be open to anyone, anywhere. Not only is that why we do not have exclusive relationships to one single corporation, but we have been very actively expanding our experience across the world. Just this year we have greenlit new locations in New York, Cleveland, Munich, Abu Dhabi, Tokyo and a stronger presence in Singapore. We do this because we want to give the startups in our program the best possible chance to succeed. That happens when more corporate partners are available, and more markets are easily accessible. What makes this even more compelling, is that we cater to startups of all stages, not just early-stage companies, but companies that have raised tens of millions of dollars too.
Plug and Play doesn’t automatically invest in every company that enters your accelerator programs, but you do invest in a lot of them. How do you determine which to support as an investor?
We say that our programs are “equity-free.” One reason is that, typically, we make small investments with our sweet spot being between $25k-$500K. One key indicator for us to determine if we will invest is to see what type of traction our startup companies develop while they are participating in our accelerator program.
The three T’s are important in evaluating any technology. Team, Traction, and Technology. For instance, we had one startup that went through our retail accelerator program and during the three-month program they secured 14 pilot programs. That was a startup that we obviously made a quick investment decision on! We call this process “collaborative due diligence.”
What attracted Plug and Play to Cleveland? What is it about Northeast Ohio that makes it a good fit for a global brand like yours to set up an accelerator program?
Cleveland is an undiscovered gem—the coasts are saturated with accelerator programs and the Midwest has a lot to offer. The health and industrial community in Cleveland is very strong. With health incumbents like Cleveland Clinic, University Hospitals and Metro Health the startups will have such a wide variety of institutions to work with. Cleveland also has great educational institutions that graduate many qualified engineers, business leaders and scientists.
The Cleveland Clinic brand is hugely powerful, so the idea that a startup can have an opportunity to work with such a renowned institution can be the exact draw they need to consider moving there. The three-month accelerator programs we will run gives the startups the time they need to see Cleveland up close and personal. Where we excel is to bring a spark of entrepreneurship—a little of the Silicon Valley essence—to this community. The building blocks are there, we just need to link them all together.
You’ve mentioned programs in other countries like Stuttgart, Germany as an example of the impact Plug and Play can have on regional economies. How do you expect Plug and Play to benefit the economy of Northeast Ohio?
When Plug and Play went to Stuttgart, the situation was very similar to Cleveland, a world-renowned brand in an industrial city with great educational facilities. Since we started the program in Stuttgart with Daimler Mercedes we have brought hundreds of startups to Stuttgart from all over the world in the hopes of working with Daimler. Many have stayed on to execute pilot programs as Daimler has committed to working with at least 10 startups in every batch.
In addition to attracting startups to Stuttgart, two of Daimler’s top competitors, BMW and Porsche, have also joined Startup Autobahn to work together to help accelerate startup companies.
What advice would you give companies looking to claim one of the spots in the Cleveland Accelerator’s first cohort?
I would say…run, don’t walk. The opportunity to work with Cleveland Clinic and JumpStart is amazing. JumpStart is devoted to helping entrepreneurs with investment and mentorship and have been very successful in the process. They are truly partners in every sense of the word.
Together we will work to put Cleveland on the map for startup innovation. Cleveland has many organizations that are helping startups, so we are going to turbo charge what they have already created.
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