Matt Cartagena, co-author of Accelerate – a book for startup accelerator programs and their graduates – offers some insights on what makes an accelerator, as well as some points to keep in mind if you’re considering applying to one…
Many founders in need of funding and resources consider applying to an accelerator program. The concept sounds great – prove your worth (to some extent), give up some equity and in turn receive funding, resources and mentorship to help kick-start your startup. But there are hundreds of accelerators for founders to consider.
Why an accelerator?
Accelerator programs force focus! Their goal is to help you speed up your startup in a period of three months to where you would otherwise be a year down the road. And there are a few other things too…
“It really helps in three significant ways:
#1 The quality of the mentor network was simply incredible. For anything we were struggling with, there’d be someone with deep experience who had faced the same problem before. We also met a number of the people who ultimately became ongoing advisors and investors through the program.
#2 We went through the program with an incredible cohort of fellow entrepreneurs, mostly at the same stage of development as we were. The camaraderie and encouragement really help with the rough moments, and make the whole journey a little less lonely. That’s continued post-program.
#3 Finally, the sheer number of reactions you get from people involved with the program is incredibly helpful in refining your vision and forces you to test it against reality.”
“It won’t turn a bad company into a good one, but it will give you the tools to make building a company dramatically easier…
Fundraising – 500 Startups opened up a massive network of Silicon Valley investors, which helped us with fundraising on both coasts. Coming from Washington DC, this was a huge win for us, since it helped to have local investors who knew us well suddenly have to compete for our deal with some of the best active investors in the world.
Family – The peers we shared space with quickly became some of our most supportive and closest friends and advocates. As our respective companies grew, those friendships only strengthened, and we continue to help each other succeed.
Mentorship – The mentor network is very impressive, and we suddenly found it quite easy to get a meeting with virtually anyone we wanted.”
How to get in
“HUSTLE – no matter how high the bar raises as the 500 Startups program becomes more competitive, if you have the hustle needed to make your company a success, regardless of what obstacles come your way, you will have a good chance at joining us. Through hustle you’ll start to knock off the required elements – traction, a great team, a great product – and you’ll find loads of opportunity. In my opinion, there is no greater sign that your company has traction than showing customer growth and tangible revenue. Focus on this and the rest will come.”
“As an entrepreneur looking to get into the program I think that traction is huge. You should be focused on growing your site regardless of whether or not you are going to apply. If you can prove both that the market is large and that you have the skills to execute and reach early benchmarks than you are in a great place. Also, a key to getting into 500 (or to any accelerator) is to always be building relationships with smart advisors in your space. They can help you stay grounded, help spur new ideas and help make connections to take your company to the next level. The right advisors are truly invaluable”
As startups continue to pop up, accelerators will naturally follow suit. Some are more niche and tailor to certain types of startups and/or startups in different industries. My co-author Luke Deering described this evolution last month:
“All accelerator programs have a focus – internet technologies, consumer retail, hardware, music, etc. However, over the upcoming years I feel globally recognized companies will increasingly start to leverage their brand power and roll out accelerator programs of their own that are specific to their vertical.
“This type of program will sculpt the future of accelerator programs. It would be a surprise to me if companies such as Apple, Wal-Mart and even LVMH don’t follow the likes of Nike, Microsoft and the New York Times and launch their own accelerator programs.”
With businesses and startups becoming increasingly long tail, I expect this trend to naturally seep itself into the accelerator trend. That said, it’s important to know that as this trend grows, applying to the right accelerator is just as important as getting into an accelerator.
As a founder, you need to make sure that the accelerator you’re applying to can help with the type of focus your startup needs. In other words, don’t just apply to an accelerator because your best friend’s startup is part of it too 🙂
Getting the most out of your time
“You will get the most out of the accelerator if you already have some testable hypotheses and technology from Day 1. Mentors’ applied knowledge and networks are that much more valuable if you can also engage them in your search for the product/market fit.”
When applying to an accelerator program it’s definitely best not to be pivoting your focus or just at the idea stage. Although accelerators will accept great teams with simply an idea, you need to keep in mind that there are usually only 10 spots in the program per season and a decent number of the applicants will be generating revenue and proving their business model.
There’s no substitute for genuine, practical insight from founders who have already experienced the pain/gain you will experience with your startup. Collectively experienced founders can help to address the massive grey area of unanswered (and unanswerable, but always experiment-able) questions related to entrepreneurship.
If you’d like to gain more insight into the accelerator process and their graduates, click here. Accelerate (foreword by Brad Feld, Co-founder of Techstars) is available until April 21 and recently hit its funding goal on Kickstarter! It contains insights from over 150 startup founders coming out of accelerators such as YCombinator, 500 Startups, Techstars, and Springboard.