The Accelerator Model isn’t dead, but it needs to evolve

I should start by saying I’m pretty bullish on accelerators. So much so, I plan on doubling down and working with over 100 startups in accelerators in 2018.

Mentoring the inaugural cohort of ICELAB, Gunnison Colorado

But I hear a lot of criticism of the accelerator model, too. Everything from the model is an outright failure to the market is saturated.

There are two ways of approaching the accelerator concept:

1. Option 1: We understand and accept the limits and limitations of the accelerator model. We’ve know there’s a lot of risk and luck involved, so we are going to optimize it to get the best out of a flawed concept.
2. Option 2: We’re just at the beginning of understanding how we can rapidly train and prepare creative thought workers to deploy innovative methodologies to change the world. We’re going to continue evolving the model as we learn what works and what doesn’t.

It’s the difference between fixed and growth mindsets. And anyone who knows me knows I’m betting on the second option.

The world is moving and changing incredibly fast. At this point, I’m more likely to agree with Tim O’Connell from HFarm that someday we’ll have as many accelerators in the world as there are currently colleges and universities. As we evolve the accelerator model, I believe this is how we’ll train people to create value in an uncertain and ever-changing world.

In order to reach that point, we need to think critically about what currently works and doesn’t about the accelerator model. And then we need to ambitiously embrace experimentation and continuous improvement.

Here’s what’s working

Time-boxed experience

Putting an end date on the program is a forcing function for productivity, learning, intensity, and focus. The merits of Demo Day are up for debate, depending on the purpose, but there really is nothing like knowing you have to go on stage at the end of the program and show progress to motivate and energize. Founders rarely have external deadlines. I find this one is healthy.

Similar stage cohorts

There is magic in being amongst peers, learning the same skills and concepts and being able to help and collaborate together across industry verticals and business models. Building startups is a lonely endeavor. In many communities where accelerators have popped up, the community of founders is small and most founders are heads-down working on their company. The accelerator experience is a place where founders connect with each other, learn to lean on each other for ideas and moral support, and build a tribe.

Coaching

In the sea of Things To Do, most founders struggle with focus. They work on things that are easy and pleasurable, rather than the most impactful (and often challenging) parts of their businesses. Coaching helps them focus, weigh options, and make progress on the important metrics.

Startup Education

Literally everything a person needs to learn to create a startup is online. If only that were sufficient. Even the best independent learners benefit from focused learning and group discussion around business fundamentals (customer discovery, business modeling, Lean experiments, finances, fundraising) and soft skills (leadership, negotiation, mission & values, agile, communication). This works best when the trainings or workshops are aligned with the stage of their business.

Professional community

Often, I feel like those of us running accelerators are still operating in the Wild West of Startupland. We’re reinventing the wheel, trying things in communities that have never been tried before, and taking a “well, I’ve been a successful founder, so I’ll be able to launch a great accelerator” approach. I’m a huge proponent for the Global Accelerator Network as a professional community for accelerator leadership to share best practices, learnings, and (like the founders we help) build our tribe.

Here’s what we need to continue to evolve

Success Metrics

I’ve written about this before. Our industry (because this is an industry at this point) needs clearer metrics for how we talk about startup progress in our programs. What does two years of progress actually mean? If a company doesn’t choose to fundraise, does that mean the accelerator didn’t help them?

Definition of Success

The accelerator model was developed to boost venture-backable, scalable technology companies in Silicon Valley. But here in the Midwest, and in many places around the world, a startup that reaches $5-$10 million in annual sales (with less risk and funding needs) is a game-changer for those founders and the local economy. These companies need the support accelerators can provide too, but are often edged out because they look too small when compared to potential unicorns.

Mentoring

Accelerators outside of Silicon Valley and big cities like NYC generally do not have deep mentor pools consisting of startup veterans. Our startup ecosystems aren’t mature enough to have founders who have exited or experienced exponential growth in their companies. Most accelerators rely on experienced local professionals, often with impressive business credentials and contacts within their industry. They are incredibly helpful for providing a different perspective and for introductions to other professionals, but often can’t help founders tactically build a startup. We need to continue to iterate on how we train founders when the mentorship model isn’t sufficient.

Stage Focus

I’ve heard accelerators (even big ones) say they’ll consider and accept companies from idea to fully launched. I think this is a big mistake. The psychology of the founders and the needs of the company are very different at each stage. How we help founders at each stage of development is very different. I’d like to see accelerators take a position on the stage of company they work with — this is as valuable, if not more so, than industry vertical.

I am encouraged by the experiments I’m seeing with accelerators all over the country:

• Telluride Venture Accelerator is testing the Indie.VC funding mechanism and using a combination of in-person and virtual accelerator
• Valley Venture Mentors offers a weekend-only accelerator, works with 30 startups at a time, and utilizes the peer-selected funding process developed by Village Capital. They have one of the best diversity and inclusion track records I’ve ever seen.
• Iowa Startup Accelerator & NewBoCo has been experimenting with the duration of the program, accepting startups for multiple batches within a year and having one Demo Day for all teams. They’ve also double-downed on their region’s core competencies and are taking a leadership role in developing local talent.
• Icelab is applying the accelerator model for ventures of all kinds, focusing completely on serving their small rural community
• Upramp is narrowly focusing their impact by company stage and industry vertical, accepting only startups that are at the stage where a meaningful partnership or customer relationship with with one of their industry partners would help them grow
• At NMotion this past year, my team and I experimented with focusing the stage of company we accepted and with new models for coaching and mentoring the teams
• At Velocity this year, my team and I are testing and refining an accelerator curriculum that can be responsive, agile, and effective at training founders

As I travel and work with accelerators all over the country this year, I’m looking forward to learning more about geographic differences and how they might (or might not) influence how startups receive support. Are the problems and solutions universal? Are there idiosyncrasies to startup communities that accelerators must adjust for? Is an accelerator in a small town vastly different than in a larger metropolitan area? What do these characteristics mean for how we design local accelerators and for how founders evaluate which ones to apply to?

I don’t have the answers (yet!), but I’m excited and thankful to get to work alongside passionate, committed, insanely smart startup community leaders to evolve the model together.