Start ups are buzzing across media. Not much is said about business accelerators, which are a perfect environment for them to grow. Let’s have a closer look and check out some vocabulary.
It’s no secret that most startups fail, little bit less obvious that accelerators can end up in the same way. Top programs succeed, while others struggle to attract promising teams and ideas.
Most of them provide tremendous educational value to young entrepreneurs. However, for accelerators to survive long term, their business model has to change.
A Little History Lesson
In the 90s, the business incubator model was developed by Idealab. Concepts were developed in-house by an experienced operations team that could execute quickly, with few constraints. Few years later Rocket Internet turbocharged this model, taking over the world with e-commerce arbitrage. In the mid-2000s, Y Combinator and TechStars pioneered the accelerator model. Talented entrepreneurs and technologists started to act as mentors and it was enough to get a minimum product with a bit of money.
Quantity rarely correlates with quality. In the reality well-intentioned programs were run by teams with little experience. Every program wants the next billion-dollar startup, but there are huge disproportions in team potential. However, there are still many constraints to overcome. Cost-of-living differences are equally important. $50,000 in San Francisco will barely support a team for a few months, elsewhere it offers a decent lifestyle for a year.
The Next Generation
TechHub, Galvanize and others have come up with valuable, revenue-generating models, combining entrepreneurial education and collaborative work spaces. Start ups are getting into the game with various accelerator schemes to establish relationships with the best and brightest in their segments of interest.
If you’re thinking about applying to an accelerator, you should understand the type of deal it offers, you should do own research to make sure that the assistance and results meet your expectations. The biggest benefit is the invaluable experience and feedback of its mentors, you should reach out to them, as well as to the founders of companies that have gone through the program.