Corporate Accelerator Programs: Best practices and success criteria
How to make the best out of your corporate accelerator program
The number of corporate accelerators is on the rise. More and more large corporations are investing, directly or indirectly, in the establishment of accelerator programs. Orange Fab, Microsoft Ventures, Hub: Raum and Wayra are just few examples of a wider trend that has been shaping the industry in the last years.
But the questions are: Why are they doing so? And which are the best practices for the implementation of a successful acceleration program within a corporate environment?
To answer them, we combined on one hand qualitative data gathered from interviews with 4 startups and 9 different companies that recently launched an accelerator program and on the other hand quantitative data from a panel of 102 accelerators worldwide.
Why do Large Corporations fund accelerator programs?
There are three main reasons that push corporates to launch accelerator programs:
Explore new Business Model: to identify the most disruptive startups and business models in order to shape, together with them, the future of the industry. It is the natural consequence to the digital disruption that is threatening several industries.
Training and transformational change: to spread the open innovation culture within the organization and push the whole company to “innovate as a startup”, thus becoming more agile, effective and lean.
Marketing & HR: to build the company reputation towards young talents, fresh graduates and the startup ecosystem as a whole in order to eventually hire the best minds or develop commercial partnership.
Which are the best practices for the implementation of a successful acceleration program within a corporate environment?
Ensure vertical and market fit synergy: establishing a vertical on a particular field is always a good choice in terms of differentiation from other existing programs and in order to create a valuable network and be attractive for startups operating in the industry. Ideally, the focus should be on the same industry the corporate is operating in.
Accept startups at the same development stage: stage alignment is a key factor for the success of the program. Having startups in a product development phase and startups ready to go international in the same batch can be disadvantageous, since they have different needs and require a completely different kind of support.
Carefully consider if to participate in the Startups’ cap table: from the startup point of view, it’s not always a wise choice to have a strategic investor sitting in the cap table. It could limit the freedom of doing business with competitors. This is particularly true in case of B2B startups. To bypass this issue, the corporate could consider participating through an external vehicle.
Give full access to your resources: the corporate should grant access to all the corporate resources and network and really commit to deliver the best possible experience to startups. Indeed, most corporates have little-knows departments or business units that can be really helpful to startups. If the acceleration program is just a marketing stunt, then startups will most likely not go anywhere and the acceleration program will not be able to attract the best teams and ideas.
Appoint a “Gateway manager”: it is key to appoint a person that can sit in the accelerator and act as a point of contact between the startups enrolled in the program and the corporate. His role will consist in identifying and exploiting potential points of contact between the startups’ businesses and the corporate’s business units.
Facilitate exchanges between Startups: the accelerator should enable and foster constructive interactions between the different teams enrolled in the program straight from day one. This aspect is often underestimated since the efforts are all focused, especially at the beginning of the program, to provide startups with mentorship and educational opportunities.
Be honest with yourself about your strengths and weaknesses:launching accelerator programs may definitely not be your core area of expertise. Then, why not rely on a partner that has the necessary skills and know-how? The model showed to work pretty well with the Techstars, Startupbootcamp or Axel Springer Plug&Play examples.
Don’t forget the main objective: create value for the startups. Otherwise, you will not be able to attract the best teams and the best mentors.
Conclusions
Corporate accelerators are a completely different creature from pure accelerators on the Y-Combinator or Seedcamp model. This doesn’t necessarily means that one is better than the other. Indeed, corporate accelerators showed to have a positive impact on startup growth and success and can manage to attract capital and investors.
Nevertheless, accelerators are like universities. The best universities attract the best talents and the best professors, triggering a virtuous cycle that can ensure long-term success and survival. Hopefully, implementing these advices when designing a corporate accelerator will help you build the next Harvard of accelerators.
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This story is an excerpt from a much wider work realized in collaboration with a venture capital firm and a multinational company, it has been the basis from my master thesis and it originally appeared on Linkedin Pulse.
Thanks to my professor Gunnar Graef and all the people that granted me an interview. If you are interested to know more, feel free to reach out at romolo.ganzerli@gmail.com
