How the first European accelerators influenced what we do today, and my personal accelerator journey
In the early 2000s, I was in the Balkans running an economic development program with the Soros Foundation. I was trying to find ways to bring together young entrepreneurs and future leaders, and to build supportive ecosystems around them. Back then (20 years ago!) we talked about ‘cross-sector dialogue’, networking, and weak tie networks. These ideas were new, and even newer in what were then still early emerging economies. There was very little weak tie networking — the societies were very hierarchical, people trusted who they knew, there was a lot of nepotism, and social mobility was all about having ‘contacts.’ This was not good for bright, young, visionaries in their teens and twenties who were considered unimportant simply because they were young.
For my work I ran networking events, and introduced the concept of networking, talking in particular about the importance of weak ties. Many of the younger participants’ eyes lit up. They just needed someone to introduce the concept to them and they got it immediately. Helping them develop networks was important, as they were clearly the future leaders of their countries.
A decade later, in 2013, I found myself involved in hosting the first Seedcamp event in Berlin, which I wrote about back then, having met the Seedcamp team at their first event in Zagreb. I was very curious about why we were all turning up to help Seedcamp review and mentor startups so they could decide who to invest in. In effect, we were working for them for free. We even hosted their events for free. Nobody questioned the logic of it, but with my interest in how social networks work, I was curious; what were they doing that meant we all offered to give our expertise and time for free? (I later found the answer: creating social capital — read on!)
I also found myself mentoring some startups who got into Startupbootcamp in Berlin. Again, objectively, it was fascinating. We all offered to support their investments for free. The startups were travelling across Europe to be there. What Startupbootcamp was creating in Berlin was clearly unique and hugely dynamic. It was early days in Berlin — theirs was, I think, the first accelerator there, and at the time there were maybe 2–3 co-working spaces.
Startupbootcamp and Rainmaking Loft were a hub around which startups, mentors, investors, and just ‘people in startups’ gravitated. The doors were open, the space was fluid, and there was what what we called back in the economic development days, ‘cross-sector dialogue’: investors talked to startup founders, big corporates talked to startups, people from abroad mixed with locals. Seedcamp had built the same dynamic in Hoxton, and as they moved around Europe running pitch events they successfully coalesced the whole ecosystem, often kick-starting a nascent ecosystem by convening everyone for the first time.
If you weren’t around at the time, it’s hard now to imagine a startup ecosystem all meeting up for the first time, and meeting Europe’s thought leaders in startups for the first time. Familiar names now, in particular the likes of Reshma, Carlos, and Mike Butcher would appear in whatever venue the local ecosystem had managed to find, and evangelise about startups, entrepreneurship, ideas, vision, dreams. I remember at that Seedcamp event in Berlin, two founders from Belgrade, Vuk Nikolić and Vukašin Stojkov, driving 750 miles non-stop to Berlin to arrive just in time to pitch to Seedcamp. It was electric, exciting, and about so much more than just investment. It was a lot about dreams, passion, and determination — real entrepreneurship and vision.
The way these initiatives broke down walls, blurred borders, and ignored hierarchies was striking. It looked very natural, but I knew from my time in the Balkans that this was a big deal, especially in emerging economies that were otherwise still very hierarchical, tied down by ossified strong tie networks, and lacking weak bridging ties into new networks.
It started to dawn on me that when I’d been running my economic development program a decade earlier I would have run accelerators if such a thing had existed. They would have been the perfect way to build dynamic, entrepreneurial ecosystems, get the young people — the future of those economies — to meet and get support from the business leaders and politicians, and it would have been the best way to help bridge those tight local networks out into useful international networks.
I was now very interested in accelerators, as they clearly did a lot more than just support a cohort of startups. I was fortunate to meet people like Jon Bradford, Carlos Espinal and Reshma Sohoni, and Alex Farcet — the pioneers of the early accelerators, and was able to walk around their buildings, mentor startups, and generally see what was going on. They were also all very open and collegiate, as was the whole ecosystem they were building, which reflected the very open culture of Silicon Valley.
Inspired, and sometimes mentored by them, I then set about establishing my own accelerator to test some ideas. I was interested to see exactly how accelerators created ecosystems, and find out if a very sector focussed program could offer better support to startups in that sector. I established an eye-care program in Berlin called EyeFocus, sponsored by Bayer and Zeiss.
I realised that with something that focussed it had to be global, as there were not enough eye-care startups just in Berlin. And being so focussed, it had to be very broad within its vertical. So it became a program aimed at startups from anywhere doing anything relating to eye-care. This meant we ranged from digital braille devices through to medical devices and diagnostics, with participants from all over the world, including Palestine, India, Kenya, Paraguay, Europe, and America.
I had been interested in how Seedcamp had really helped form the European tech ecosystem in the early days, and how Startupbootcamp had done that in key cities, like Berlin. In the same vein, what my eyecare program did was pull together the global eyecare innovation ecosystem, and remarkably quickly.
Within half a year we had identified over 120 startups, found the hubs of activity, investors, innovators, academic clusters, and more, and they had all been connected through the accelerator. Again, I saw the ability of an accelerator to sit in the middle of an ecosystem and act as a super-connector. It was incredibly effective and efficient.
After running two eyecare programs, I set about defining these ideas through research. I had been ‘sort of working on my PhD’ part time for years without ever quite understanding where it was going. Now, with some time set aside just to study, I figured out that I wanted to understand how accelerators do what they do. They appeared to be uniquely good at creating ecosystems, bridging between hierarchies and sectors, and building dynamic weak tie networks — groups of people who didn’t already know each other — in such a way that encouraged cooperation and trust.
For the PhD, I had to read everything written on the topic, which wasn’t really that much. I also had to read a lot around social network theory (which was a lot), which gave me the academic framework with which to describe what I was looking at (you can read about that here). This helped me see the role of social capital in accelerators — by being valuable to so many different groups of people, and by having that value embedded within a social network, they are rich in social capital.
The startups are important because a key form of social capital in networks is ‘early access to novel information.’ Basically, if you’re an investor, seeing startups before everyone else is useful. The same if you are a corporate wanting to see innovations or trends before your competitors. As I have since written about, Accelerators also reward mentors with social capital: social validation (being associated with a strong brand), along with early access to novel information, and with social ties (meeting other mentors, investors, etc).
Because everyone values the social capital embedded in the network, they are also afraid of being pushed out of that network (something called tie dissolution in the academic literature). This creates a dynamic in which there are very high levels of trust and of adherence to implied social norms. The punishment for breaking those social norms is to be ostracised, and because the network is so big and so rich, that is a very high price to pay.
Strangely, I am not necessarily a fan of accelerators; I don’t think they are the answer to all problems. However, I do think they offer a very effective and efficient way to organise groups of people. By giving people clear roles (mentor, founder, investor) people know where they sit in the network and how they are meant to interact. Accelerators borrow from universities the efficiency of gathering people together in one time and place — just like a class being taught by a professor, startups can be introduced to a single high-value contact as a cohort more efficiently than each trying to meet that person individually.
When designing accelerators, I like to work backwards and ask what the desired outcomes are, and then see if an accelerator, or accelerator-type activity, can achieve them. I then like to design the program backwards from the outcomes, or funding KPIs, rather than propose a cut-and-paste accelerator that may fail to achieve those goals.
I also encourage people to dig deep into what they really want to achieve and then measure success on those terms. I am always annoyed by programs measuring success on metrics like how many startups receive investment if, for example, the aim of the program was to develop founders, or support regional economic development. You can create fantastic outcomes from a well-designed program that go far beyond raising investment.
Think about the impact on the individuals — a first time founder may join a program, be helped to fail quickly, and then be freed up to take those lessons onto starting another successful startup, or joining another company and being a great asset there. That success is completely overlooked in most accelerator metrics that focus just on investment or startup survival. (I have written a separate post about how to measure accelerator outcomes). The overall value of a good accelerator spreads well beyond the startups. It should also leave the mentors, corporates, and other partners better networked. In that respect, it is creating and sharing social capital, leaving an ecosystem better networked, and consequently opening the way for multiple longer-term outcomes.
I am glad to see the days of copycat programs popping up everywhere seem to be over. I am also pleased to see some quite quirky, niche accelerators developing. There is less focus on blanket investing in startups, and more focus on supporting really powerful networking, development of individuals, and networking of ecosystems around particular topic areas. This is a great evolution of those early accelerators, and I think can bring great value to those involved.
I now advise on accelerator design, am CEO of Sotera, and an Hon. Practice Fellow at Imperial College Business School.
