The difference between Bootcamps, Incubators and Accelerators
Firstly, you may notice that I’ve ordered the title, according to what stage your business or idea should be at when you approach one of these programs. A commonly asked question, but often confused, I’m going to break down the meaning behind these programs, and what you should expect to get out of them while you’re part of these opportunities.
So we’ll start with Bootcamps. Bootcamps are becoming more and more popular around the world, with Startup Weekend, Startup Bootcamp, and a wide range of others that are popping-up, including some backed by the likes of the European Union. These are a fantastic opportunity for someone with an idea, or with very little experience to get involved in learning what the process is to starting a business. If you’ve never started a business before, and you think it might be something that you’re interested in, then this is for you. If you want to get to grips with understanding the start-up world, learn basic skills in marketing, business formation and strategy, then Bootcamps are a must to put you on the right path.
Next, we move on to Incubators. Incubators may be short-term (although not necessarily time-specific) programs where people with ideas can begin to really involve themselves in the market research, the analysis and the structure building of the idea that they want to ‘incubate’ as such. It’s a good opportunity to find people that are interested in your idea, and some may potentially even become a late co-founder to the company. However Incubators and Accelerators are often confused with the two words often being used inter-changeably, which can cause problems to those applying. That said, Incubators are a good way of moving a business from pre-startup into its start-up phase before acceleration, and will begin to introduce you into the world of ‘entrepreneurship’.
I wanted to point out why I included quotation marks around the word entrepreneurship. Personally, I’m not a believer in the word entrepreneurship, due to some of the things that are associated, and that come with the term (i.e. Wantrepreneurs; they are, those without an idea but simply aim to make lots of money). Lots of people are becoming lost in the world of entrepreneurship, and can find themselves getting stuck in a vicious cycle of trying to make money and then re-assessing before trying once again. Hitting the wall here is the downfall of many, as people lose sight of the vision, or the goal of the company that they’re trying to create.
Accelerators are time specific (normally 12 weeks) and tend to be focused on technology entrepreneurs, although some non-tech accelerators are beginning to pop-up all over. It’s an opportunity to really learn the strategy behind an idea, and iron out any issues, but it’s also for those that really want to begin to build a network of individuals around them, be that non-executive directors, mentors, and employees, as well as building publicity around the company. Many accelerators come with stigma attached, that is; if you are able to get onto an accelerator then you’re already generating some validation for your idea, which will immediately attract investors. These accelerator programs come in all shapes and sizes, such as Y Combinator, Wayra and Techstars. We’ve already seen huge business come from these accelerators such as Dropbox and Airbnb. The possibilities are endless, and these programs offer a huge opportunity to anyone involved.
Paul Bricault (Co-Founder of Amplify) defines an Accelerator as:
“An accelerator takes single-digit chunks of equity in externally developed ideas in return for small amounts of capital and mentorship. They’re generally truncated into a three to four month program at the end of which the start-ups ‘graduate’.”
Before we move onto other things that exist in the market, from online platforms to venture programs, I think it’s important to compare the differences between Incubators and Accelerators. The biggest differences between them are the time frames and the size of businesses that are involved in the programs. Accelerators tend to be positioned around set time frames, usually take equity from the business in return for start-up investment, and will normally attract slightly larger companies. Incubators focus on smaller companies, and will still focus on the ideation of the business, focusing on developing the idea into the business. This may involve market research, or even pivoting as those on incubators are still probably going to be searching for their perfect market. This is something that should be carefully considered, when considering which one to apply for. If your business is at an early stage, you’re likely to find an incubator to be most useful. It will allow you to develop the idea, the target market and the path of the company. Those already clear on these matters, should consider instead focusing on accelerators.
There are also other forms of business building that are sprouting up all over, such as ‘Online Incubators’, ‘Venture Programs’, and even ‘Virtual Accelerators’. But where is this leading? Are we finding ourselves building businesses to support other businesses? Is this an endless bubble and a ticking time bomb that’s waiting to explode like we saw in the banking sector in the recent economic crisis? We see more and more people self-qualifying their own personal achievements, and using these to drive their business and their media behind it. Instead of building a brand around a company, many are focused on building a brand around themselves, in the hope that the company will follow suit.
In this case however, it’s important to focus on the types of support that exist for start-ups all over the world. Although they have been broken down, below shows the make-up of the different programs that should be carefully considered by people building companies.
Bootcamp: New to ‘entrepreneurship’
Incubator: Formation, maintained growth, pivots
Accelerator: Time specific, fast growth, investment
If you’re really not sure where you sit, then ask the company that you’re applying for about what they are and what they do. I should point out here that even incubators and accelerators may misuse the terms, or may have different goals, as some incubators may be seen as a path for after the acceleration phase. Be sure that it can benefit your business, and don’t waste time applying things that won’t benefit what you’re doing. It’s the first step towards disaster.
Tom Charman (Co-Founder of Ember Club Ventures & Hidden Planet)
Follow me on Twitter (@CharmanTom)
