The Over Abundance of Accelerators
When Harry, Ray, and I were first starting out, our forefathers and mentors would ask us over and over: Why are you building another accelerator?
It’s a fair question. The incubator and accelerator market was already saturated when we first ventured down this path in 2015. There are programs for every industry, stage, student, geography, and demographic across the globe.
But there is a problem with this overabundance, in that accelerators were created originally as centers of gravity for investors to discover better opportunities faster, using less resources. As my friend John Gossart explained it another way, accelerators were created for investors to outperform the overall market through expert selection and timing instead of having to make higher returns only through riskier bets. It follows that since the overall market now embraces an accelerator model, the point is moot.
So how did we get here?
Perverse incentives have created opportunistic organizations that front as incubators or accelerators but are in reality real estate models or vanity projects. It’s a fairly popular value proposition to message to startups “Here’s co-working space for six months, a little bit of cash, bi-monthly lunch and learns, and a sprinkling of office hours with industry experts. All this and a shiny participation trophy you can approach investors with for only 8% of your equity!”
While not necessarily wrong or bad (it’s just another kind of business model), it’s still a dilution of the original intention of an accelerator. As there are less barriers or reasons to be selective, from an investors perspective, you can no longer make safe assumptions about the stage or viability of “post-accelerator” companies. Just because you have a gym membership, it doesn’t guarantee me that you’re fit.
Which brings us back to our original question: Why are we building another accelerator if the model is no longer perceived as valuable to the intended customer base?
For humble, we saw an opportunity in the overabundance. To continue with the earlier analogy, we’ve developed our approach to be much more like a personal trainer than a gym — high touch and high accountability. We do not pass you to new trainers (mentors) each week who have to learn every time where your trouble spots on. We do not let you try and bench press 50 pounds if you haven’t shown us you can curl 15s — no matter how eager or confident you are. We’ll tell you to hold off on the bikini contest until you’ve toned up a few more weeks. And trust me, this is in your best interest as well as ours.
Simply explained, we believe that anyone who has discovered a problem worth solving should have access to the training, education, and network to pursue its solution as a business. If she believes that creating a business will solve a problem profitably, she must put in the necessary research and market diligence to confirm or deny her hypothesis. We provide a training plan, and exercise alongside her each step of the way. If confirmed, she can “graduate” from one stage of our process to the next (lather, rinse, repeat). If the market tells her otherwise, she can continue to have access to the training guides, education and family forever… just in case the next problem worth solving is “the one”, or if it’s perhaps a better idea to work for another more promising startup within the network. Yes, even workforce development is a byproduct of our model.
This process of rigorous curriculum, demanded accountability, and feedback to inform go/no-go decisions based on in-market validation is repeated at each stage of growth for the companies that we work with. It allows us to focus attention and resources appropriately based on a startup’s continuously proven potential, without pushing misaligned talent out of the network entirely.
We do incubate the best ideas and accelerate startups that have the capability to grow exponentially. Likewise, we remove bias against the kind of founders and opportunities that don’t often get evaluated. But we know that not every company we work with is ready or appropriate to put in front of an investor, and we’re okay with that. Different kinds of businesses solve problems in communities beyond venture capital, and that’s still a win for us. For the startups that we do refer on into our investor networks, I can guarantee that they have been validated — not always by some fancy big name mentor or backer, but by the market, and that’s what matters most.
So we can finally answer the original question, why another accelerator, and more specifically, why our accelerator. We created this model only for the sake of serving as hyper-efficient venture due diligence. We’ve leveraged technology to make that diligence happen even faster, in places and populations that are traditionally overlooked. And yes, we’re betting that our startups, when they get there, will outperform the overall market.
