The Future of Startup Acceleration: Part I
Introduction + Part I: Future of Work
If you sit long enough amongst fellow tech peers at an event in London (or listen to them chit chat on ClubHouse, now that we are not allowed to play in covid), startup founders agree there are three main reasons why they join accelerators: Capital, Network, and Mentorship.
In 2015, in the UK there were 605k new start ups. In 2020, with a healthy push by covid, this number increased to 770k, according to the Center for Entrepreneurs. That’s a 27% increase in 5 years.
With new records for number of start ups in the UK, and more people “wfh”, there is more diversification in the locations where start ups are based, in the ways their teams interact, and in the business models they employ.
In 2020 when Boris Johnson announced the Future Fund, which required startups to have raised over £250k in equity investment over the past five years. Due to the single digit investment of VCs into Women and BAME founders, it became clear that these founders would not benefit from the initiative. So 2020, also saw the founding of new funds (like Softbank’s Opportunity Fund) and angel groups pushing for more representation of BAME founders.
Increase in diversity of founders’ background is also on the horizon.
With these changes in mind, I have been thinking about the future of start up acceleration. To get to a model for the future of acceleration, I thought to break down the problem into three parts: the Future of Work; the Future of Mentorship; the Future of Ownership. This piece will be, therefore, a series of three posts.
I decided to go to the “customer” first — so I surveyed 45 founders and operators. The data was collected in January 2021, with 73% of respondents based in the UK, 15% based in the EU, and the rest comprising of Middle East and India. 85% are founders, 10% senior level operators, and another 5% are employees.
In this series, you will read about:
In part I, the Future of Work, I will explore what “remote” work means: context, aspirations, and barriers.
In part II, the Future of Mentorship, I deep dive into what effective mentorship looks like in a during- and post- covid world.
In part III, the Future of Ownership, I will explore the business models that accelerators can employ to serve best the start up ecosystem.
Alright.. so let’s dive into Part I…
Part I: Future of Work (for start ups)
tl;dr
Working in a remote, distributed, and hybrid way, starts with the flexibility of working environments that make the workforce most engaged and effective, and is further supported by a predictable routine.
FLEXIBILITY: The FoW is about flexibility in access to working environments.
FOCUS: The working environments are chosen with the purpose to make the workforce most engaged and effective for the specific task at hand.
ROUTINE: The nature of the tasks dictates a predictable routine — for the individual and the team.
The FoW is Fluid: it is a distributed start up workforce, coming together like a heart beat, at a pace that makes people most inspired, engaged and effective.
“The office is dead.”
We have heard this dozens of times in the past year. Companies dropping their office space, in favor for a “work from home” set up; tech giants of the likes of Facebook, Twitter, and Microsoft announcing their plans for “remote” work at least for a few years, if not forever. But only for some, like Microsoft, to turn around a few months later, and swiftly signal a shift in what they mean by “remote” working: not solely a “wfh” but a “Coworking” type of remote. So, is the office dead? Are we going to be working “remote” forever? Or will work out a “hybird” model? And how does that impact the small start ups across Europe?
In order to deduce what the future might hold, let’s take a look at the customers: the start ups with less than 20 people across the UK and EU.
First, let’s look at where start up founders do their best work.
I asked people where they prefer to do intellectually challenging work. The type of work which requires focus, and control over the amount and timing of interactions with others. Not surprising, in the top 3 options, with a tie of 27%, two are quiet places (the Private Office and your Home Office — “if you are lucky enough to have one” as someone pointed out). Third, with 24% of all votes, is a Coworking place.
People who opted for Coworking environments for deep work cite “[they] need some ambient noise and energy around to help feel motivated. If [they are] completely alone, [they] can often just procrastinate.”
Interestingly enough, the Coworking environment becomes even more relevant in the next scenario. A whopping 38% say a Coworking place is perfect for menial tasks, and if you add the other buzz-y environments like a Cafē, a Home setting and a Members club, we get to a total of 80%.
Here is what people say: “I like when I have people around me”, and “having people around me, helps to get motivated and get things done.” People mention the presence of “white noise” often, and a quick search on YouTube shows ambient music videos uploaded in the last year with up to 25M views.
We need energy. It’s what gets us going. The feeling of going into work with a whole flock of dynamic and motivated people, pacing fast across a busy underground station, with a coffee in hand. While I didn’t ask this specifically, I suspect while we don’t miss the cramped train, we do miss the energy of the morning to kick us off for the day.
Next up, I asked about brainstorming. Where do people prefer to do this? For brainstorms people want a focused and stimulating environment, allowing for dynamic flow of people and information. Again Coworking and Private Office, dominate again, granted there is access to large private meeting and collaboration spaces.
No phones, no distractions. Just a private bubble for the team to get things done together. While digital collaboration tools were a “necessary evil”, people mention “Zoom is not enough of a replacement for human interaction in a meeting room with a whiteboard.” Start ups like to do brainstorms in person. (this is also corroborated by tech publications, like Wired)
“Two-dimensional video meetings can’t emulate the inherent virtues of a three-dimensional environment — and that’s where virtual reality may come in.” — Wired, June 2020
The bottom line here is this: find a private place for concentrated work; buzz-y place for menial tasks; and Coworking or Private Office with access to a private room for collaboration. Nothing surprising here. “Remote” doesn’t mean only “Work From Home.” And “distributed” doesn’t mean not seeing each other in person. Working in a remote, distributed, and hybrid way, is about the flexibility of access to the “right” environments at the “right” time.
FLEXIBILITY: The FoW is about flexibility in access to working environments.
Where it gets interesting is the flow of people between those environments and the cadence.
The traditional office is indeed dead for 29% of start up founders. They are polarized, and say they would never want to return to the office, but they would spend their time, or close to all of it, in a Coworking place or their Home Office.
Interestingly enough, 39% and 45% respectively wouldn’t work from a non-dedicated Home Office (like your living room) or a Cafē.
Digging through the correlations, a preferred model for this polarized group is a 4:1, when they spend the majority of the week in one place and up to one day somewhere else.
For the rest 2/3rds, the model is more of a 2:3, where they would rather have variety in the places they work from. The majority of people will prefer to spend 1–2 days / week in a Coworking space or a Home Office; with an additional 2 days in the Private office. Then add the occasional cameo appearance in a cafe or members club.
There is a commitment from founders to the type of meeting and the environment in which it is happening. Spending a full day in an office is well justified if everyone else from the team is there; or if it allows for a controlled engagement with other founders.
FOCUS: The working environments are chosen with the purpose to make the workforce most engaged and effective for the specific task.
There is also a commitment to the schedule and routine of the team. 67% of people have a routine and part of this is scheduled time with the rest of the team.
“Experimenting with meeting types where half the people are online, and half are altogether, just puts the people online at a disadvantage. We stopped doing this, and now when we decide to meet altogether, we do it all in person. We tend to do this once a week.”
There is a certain fluidity to the manner of movement of the workforce. “Hybrid” working doesn’t mean a meeting where people are half on video and half in real life. “Hybrid” means working in a certain environment over the course of a day; and in a specific cadence mixing one or two environments over the course of a week — it is a predictable mix of work environments.
ROUTINE: The nature of the tasks dictates a predictable routine — for the individual and the team.
Zooming out of the weekly or monthly routine, I explored how much time would start up founders want to work “remote” from another city or country.
Half of the people who answered the survey would like to spend up to 2 months per year away from their primary city of residence.
For 41% spending up to a month away is enough.
Again, flexibility in the environment from which people work, is translated into flexibility of geographical location.
Start up founders found it stimulating to pair a vacation with a business retreat, spending time with colleagues and subsequently with friends and family. Short business trips are traded in for longer stays, allowing for a deeper cultural immersion — or an escape from the typical routine.
Finally, what stands between founders and the desired work setting? How do we make it work?
The founders who desire to work from a Private Office cite “Cost” as main reason to be able to do so. The data showed a strong negative correlation between the desire to work form a Coworking space and the time to commute indicating Coworking places are located conveniently.
(As a side note, “Time to commute” is strongly correlated to “The mode of commute.” Furthermore, the more the “Time to commute is a problem”, “The mode of transport” also is. They are a coupled problem.)
In my research, three themes emerged: flexibility, focus, and routine. Rather than merging digital and physical worlds, overlaying reality with virtual reality, people’s preferred way of working is one that is like a fluid: it is a distributed workforce, coming together like a heart beat, at a pace that makes people most inspired, engaged and effective.
What this means for the logistics of acceleration programs, it opens up a realm of possibilities:
- locations could get creative — you could run a program from anywhere
- duration of the programs could get out of the typical 3–6 month period — going much shorter, in person type boot camp; or much longer, resembling an online school
- decentralized participation could allow for programs to offer both general virtual content, and in person workshops (e.g. based on geographical location)
- or tiered access to the programming (where a select group gets the hands on in person experience, and a larger group — online — gets the general school/webinar content)
The FoW is Fluid: it is a distributed start up workforce, coming together like a heart beat, at a pace that makes people most inspired, engaged and effective.
