Business Incubators Programs Have Different Approches

Subtitle: How Qualified The Program Managers are in Selecting The Right Startups at the Right Stage

Business incubation programs have different approaches to the selection of startup clients. The success or failure of a startup in a business incubation program depends on how qualified the program managers are in selecting the right startups at the right stage. Four out of the eight startups mentioned that their business incubation programs did not perform formal due diligence because of two main reasons: 

They were newly established or the program managers simply believed that the product was in line with the program’s focus and competencies. None of those four startups received feedback or were evaluated by the program. It could be assumed, therefore, that incubation programs acted in their own self-interest when attracting new tenants and raising public awareness of their programs. This is especially applicable to university-based business incubation programs, which are more supportive and more inclusive in nature. SE4, who was co-founder of an incubation program, pointed out that demo days are only for community, to show that the program is still operating. 

Overall, entrepreneurs should be conscious that incubation programs are not always necessarily acting in the best interest of startups. Moreover, an incubation program’s admission process should be seen as an indicator of how seriously managers are taking a startup into consideration. Without due diligence on by both the programs and the startups, startups are at risk of becoming part of a program that is not necessarily valuable to them.

Services and offerings: General workshops, courses, and lectures about entrepreneurship were not found to be valuable

One out of the eight startups mentioned that general workshops and lectures about entrepreneurship were not found to be valuable. Startup B emphasized that it was a waste of time to participate in general workshops when the company needed financial resources to develop a minimum viable product (MVP). Without a functional prototype, startup B was unable to demonstrate their proof-of-concept. Despite spending one year in a university-based incubation program, startup B has not succeeded in developing a functional prototype. Thus, startups who are involved in the program can spend a lot of time working on secondary tasks, instead of focusing on primary ones. According to SE3, business incubation programs “keep startups busy with stuff which they don’t really need to do like presentations, instead of helping them with securing first customers.”

Services and offerings: Startups received low commitment from program mentors and advisors

Four out of the eight startups emphasized that they received low commitment from program mentors and advisors. Startup F gave an example in which the lawyer of their incubation program suggested not to file a patent application in China despite the company’s plans to expand globally and build a pilot plant in Hong Kong. Startup E has not received any support from mentors and advisors and wished there was someone to keep them accountable. Startup D, as with start-up E, has been left on its own. Startup H failed to leverage a sound marketing strategy and expected advisors to help them earlier in the process. SE2, who has also passed through a university-based business incubation program, indicated that some of the mentors were professors and a variety of mentors would have been more appropriate. SE4 mentioned that some entrepreneurs do not get appropriate help from incubation programs because that help is untargeted, as service providers are not interested in startup results.

Services and offerings: The incubation program did not meet the company’s initial expectations

Business incubation programs promise startups a variety of services. However, according to SE1, the quality of these services, and even their availability, might be in doubt. Such a situation happened to startup D and startup B. Startup D complained that the program managers promised to help with further product development, but their company never subsequently received such help. Startup B was totally disappointed with their program, as it provided only physical space and general workshops while the company expected to get help with acceleration, mentoring, legal advice, investors, and networking. Startup B was even willing to pay for services if the program was able to provide what they needed. Accordingly, startups should make sure in advance that business incubation programs will provide what they promised and what was expected from them based on the initial formal or informal agreements.

Services and offerings: Tangible services such as access to manufacturing capabilities were not provided or were limited

One of the reasons why startups join a business incubation program is access to office space. However, other tangible services such as manufacturing and prototyping capabilities are no less important. Startup F joined a program because of the potential access to prototyping labs. They emphasized that renting a lab can cost a fortune. Startup F developed a kit to test marijuana oils, but because they did not have access to a workshop, it became impossible to produce the kits. Startup A emphasized that existing manufacturing firms require a continuous production supply and are not interested in signing contracts with startups. In addition, startup A was not allowed to use the resources of the university incubation program for commercial purposes. Thus, it could not achieve a competitive advantage based on early prototyping. Startup C also noticed that startups who have physical products face difficulties in getting into contact with potential manufacturers. Startup G wished that the program facilities had a workshop, where they could test their product.

Network: Startups did not efficiently use the office space provided by the incubation program

The purpose of startups sharing the same office space is the opportunity to build relationships with peers. Startup H emphasized that sharing an environment with people who are going through the same challenges is very valuable. In fact, startup H established a partnership with another startup that was part of their incubation space – something that would not have been possible if they were not using the same physical space. In addition, startup H mentioned that, at a certain moment of time, the attendance of startup teams in the office space dropped down significantly, which reduced opportunities for collaboration. Startup B felt frustrated that only 2 or 3 startups out of 15 used the office space on a regular basis. Startup E also noticed that attendance of the startup teams diminished over time. After all, the entrepreneurs themselves started to question if there was a difference between using the incubation office space and working at home.

Network: The incubation program’s network was not aligned to the startup’s product

As was emphasized in the literature review, incubation programs provide more generic network resources and offer less idiosyncratic network resources, because it is not practical for a program to even try to address each potential startup’s every need. Accordingly, three out of the eight startups who joined a more general incubation program (i.e., with no specific sector of focus) stated that the program cannot help them with connections to strategic partners. Startup F needed access to pharmaceutical and chemical manufacturing industries in order to secure access to a valuable supply chain. Since the program network was not in line with their product, the startup had to build its own network. Startup A needed access to manufacturers and distributors in order to start commercial production. Since the incubation program did not provide the necessary connections, startup A considered finding a business angel with the right competencies and knowledge in the field. Startup D needed access to the automation industry in order to test a product and meet potential customers. However, the incubation program was more focused on the healthcare industry than automation. Startup D spent 10 months in an incubation space without any luck establishing the necessary partnerships in order to commercialize the product or even test it at a customer’s site. According to Mas-Verdú and co-authors (2015), business incubation environments are insufficient on their own and have to be aligned with other businesses characteristics such as technology, size (number of employees), and sector. In general, generic network resources are valuable only for those startups that do not know how to pursue their business idea. Startups who are looking for strategic partners in order to commercialize their product should join sector-based incubation programs.

Network: Startups were unaware of the business incubation program’s ecosystem

Sa and co-authors (2012) stressed that entrepreneurs cannot fully benefit from an incubator’s resources when those resources are not well coordinated. Two out of the eight startups mentioned that they were unaware of the ecosystem of the business incubation program. Both startups were part of a university-based program. Startup F found out about some of the existing resources, but only by accident. Meanwhile, startup E mentioned that the services provided by the program were not very well advertised. Startups who were unaware of the existing program resources started looking for resources outside of the incubation environment, which is a time-consuming process. Therefore, business incubation programs must make sure that their startups are informed about available resources.

Financial resources: Business incubation programs did not provide direct or indirect access to investment

To cross the valley of death, startups can use the resources of the business incubation environment to secure initial funding. Startup D had a proof-of-concept and was ready for investors. However, none of the investors from the incubation program’s network were willing to invest in it. After a few unsuccessful attempts to find investors, the incubation program stopped trying to help with investment search despite earlier assurances from the incubation program managers that startup D would receive funding from their investor network. Startup B was not ready for initial funding but needed seed money in order to finalize their prototype. The rest of the interviewed startups either were not ready for investors or they succeeded in attracting investors by themselves. According to Rijnsoever and co-authors (2016), non-incubated startups who have access to the same investors raise as much funding as incubated startups. Accordingly, being part of a business incubation space does not necessarily mean that a startup will receive funding or be connected to potential investors.

Equity: Equity taken by the business incubation program made startups unattractive to potential investors

Different business incubation spaces operate under different business models. Most of them are looking to promote regional growth, while others are focusing on generating financial returns from equity. Startup D joined an incubation space with high hopes of securing investors, potential customers, and product development in exchange for 38% equity. The incubation program did not help with product development and customers, but it was ready to charge the startup for other services. Startup D did not use any of the services, because the services were not good enough and were not worth paying for. As it appears, the incubation program adopted a for-profit property development model to charge a fee for services offered. However, the startup did not receive any investment through the program. The program only provided office space and connections to investors. In fact, most of the startups in this program received an investment from other institutions operating in the region and the program managers only advised startup D to approach them directly. On the other hand, the funding institutions were running government-initiated incubation programs that filled the gap of financing when nobody wants to invest in early-stage startups. Those government-initiated programs seemed to provide better, free, or much cheaper, mentoring and consultancy for startups.

On the other hand, SE3, who was involved in a government-led incubation program, mentioned that the program focused on taking startups at the point where they are ready for investment. SE3’s company never needed an investment because they used bootstrapping. According to SE3, the best exit strategy for incubation programs is when their client startups are acquired.

IP Protection: Participation in a business incubation program puts intellectual property at risk

Participating in an incubation program can put a startup’s intellectual property (IP) at risk because multiple entrepreneurs share office space, workshops, laboratories, and mentors. Startup F emphasized that their product and IP can be very easily exposed to third parties as everyone can access the incubation program lab and office facility. Since most incubation programs do not provide legal services and obtaining a patent is expensive, startups bear the risk of IP exposure. On the other hand, it is typically not the responsibility of the incubation program to protect their startup’s intellectual property.

Post-incubation: Following incubation, startups looked to join another business incubation program or sought business angels

Usually, startups go through several incubation programs to build or acquire necessary resources for their businesses. After spending some time at a university-based early stage incubation program in Ontario, Canada, startup E applied to join another one, because they were looking for more dedicated hands-on mentoring and business support focusing on growth. Startup B, in Denmark, applied to join a university-based incubator but the application was rejected because the program was for students only. As a result, startup B applied to a regional investment agency in order to receive funding. Startup A is considering finding a business angel who will help with distributors and manufacturers. Accordingly, when an incubation program provides idiosyncratic resources or limits access to complementary assets, startups start to look for those resources in other programs or try to find business angels. Therefore, startups should understand that graduation from an incubation program does not necessarily mean that they will be ready for the market or able to grow and scale-up.

Conclusion

This section summarizes the key insights gathered from our research and analysis. In addition, it focuses on results that can be used to improve an entrepreneur’s understanding of incubation programs. The analysis of the empirical observations resulted in the articulation of the following downsides of being part of a specific incubation program.

Equity dilution can lead a startup to bankruptcy. Startups who have diluted too much equity to an incubator or accelerator will struggle to convince investors to invest in them later. Every time a startup issues new shares, the existing shareholder’s equity decreases.

Startups can face low commitment from incubation program stakeholders such as business mentors, advisors, and external partners. External service providers are usually not interested in startups’ results.

Putting IP at risk. Startups who join an incubation program are risking exposing their product or idea to third parties that have similar access to the incubation facilities. Half of the interviewed incubation programs do not provide legal advice nor IP consultancy.

Young and inexperienced incubation programs do not do enough due diligence since, most often, their main goal is to fill spots and enhance their regional reputation.

Startups can be unaware of the business and innovation ecosystem of the incubation program. Some programs do not do a good job in advertising the expertise and knowledge of their networks. 

General workshops, lectures, and courses provided by incubation programs are time-consuming and not necessarily useful. Startups spend a lot of time working on secondary tasks instead of focusing on primary ones. For instance, an interviewed startup spent 12 months in an incubator and was not been able to build a functional prototype during that time period.

Incubation program networks may not align with a startup’s product. The majority of the incubation programs provided only general network resources.

Incubation programs do not usually provide seed money, investment, or connections to investors. In fact, being part of an incubation program does not guarantee any investment.

The collaboration opportunities significantly decrease when an incubation space is underutilized and only a few startups use the office facility.

Prior to joining an incubator or accelerator, startups should consider whether or not they would need specialized facilities/equipment. Most of the interviewed founders participated in incubation programs that did not have specialized facilities/equipment.

Startups may go through multiple incubation programs to acquire or build necessary resources. Therefore, startups who have not received necessary help or resources in a specific incubation program consider joining other programs or finding business angels with the right competencies for the startup’s context.

Finally, consider the differences between incubator-like and accelerator-like programs in the way they refer to startups that have used multiple incubation programs. The general tendency for startups using multiple incubation programs is to move from early-stage incubation to more dedicated acceleration programs. As a rule, university-based programs are focusing on early incubation offering young entrepreneurs the opportunity the experience of being an entrepreneur. In this sense, we should be careful when comparing the performance of incubators because their missions could be quite different. On the other hand, acceleration programs tend to focus on growth objectives and stronger investment exposure and opportunities. Even though early-stage incubators also claim to offer funding-related networking opportunities, their focus seems to be on the quality of the entrepreneurial experience and the validation of the viability of the emerging business opportunities.

In conclusion, it is not always a good thing for a startup to join an incubator or accelerator. Or, rather, there are multiple aspects of business incubation practices that could affect negatively early-stage companies, and founders of new ventures should be very careful when selecting a specific incubation program. The answer, of course, cannot be considered in black and white terms since the focus of the selection process should be on the interference of the multiple factors that could potentially affect the future of a startup in terms of operations, market potential, external funding, etc.

We believe that the analysis provided here will enhance the awareness of both researchers and practitioners about the potential negative impact of improperly selected incubation programs. It should enable executive managers of existing incubation programs to refine their startup selection process and better articulate the value propositions of their programs. At the same time, we should point out that our study is based on a limited number of cases. Future studies should build a broader empirical base by selecting a larger number of startups and more sophisticated methodologies, taking into account the distinction between the incubation programs, the stage, and the strategic goals of the new ventures.

startup accelerator program

What Makes Startup Accelerator Programs Successful

startup accelerator program

Subtittle: Checklist for your startup to be ready for an accelerator program

Are you ready for the next big step in your startup , a journey that will change your life forever?

1. Trillion-dollar startup idea?

The bigger the idea the more likely you will get noticed in your application. You also need to make sure that you are able to explain your idea so that it is easy to understand.

95% of accelerators seek B2B startups, while only 78% of accelerators look for B2C startups.

2. MVP

Your product/service needs to be completed, but that doesn’t mean it has to be perfect. Launching a Minimum Viable Product shows how your idea can work in the real world, gives you time to get customer insights, and highlights the areas where you would want to improve your product/service when you apply to enroll for an accelerator programme.

68% of accelerator programmes accepted startups that already have a prototype in place.

3. Evidence

Are you growing as a business? Can you prove it? What is the likelihood of growth in your startup over the next 2 to 5 years? How many customers have you worked with? How many people are visiting your website? What’s your ROI? These are the things that you will need to provide when you’re filling in an accelerator application.

53% of accelerators accepted startups that already have some customers, even if some of those customers aren’t yet paying.

4. Your Team

You need employees. No one can run a startup on its own for long (#burnout!!). Your employees need to work full time or be willing to switch over to full time when being accepted into the accelerator.

18% of startups fail due to team problems such as a lack of domain knowledge, lack of marketing knowledge & plan, lack of technical knowledge, friction within the team, lack of motivation, and a lack of availability.

5. Network + Research

Do you have references from mentors and other founders who have gone through one of these programmes? Have you done your research on which accelerator will be the best fit for your startup?

“It’s OK to ask recruiters and hiring managers questions to see if their vision aligns with yours so you can run a successful business.” — Stephanie Wells, Formidable Forms

6. The Pitch

If you get accepted to go through to the interview for one of these programmes, you need to be ready with your pitch. You need to know your business inside out. This means you need to know the metrics, stats, the vision, and how to overcome potential obstacles (check Point 3 again).

“Most tech startup people are so in the trenches of their product that they forget how to talk high level about who the tech is for.” —John Murphy, eBike Generation

7. Accepted 

If you get accepted you are one of few. Take this opportunity to expand your network in the startup realm. In addition, make friends , being an entrepreneur isn’t always easy and not everyone understands that part of the startup world.

New research from the University of Georgia links startup accelerator success with a few key program elements, such as mentorship and open discussion among participating startup founders.

Recently published and forthcoming papers co-authored by Susan Cohen in Research Policy, Administrative Science Quarterly and Organization Science examined the variation among several accelerators.

Accelerators are fixed-term, cohort-based educational programs for startups. There are about 170 accelerators located across the country, including more than a dozen programs in Georgia.

“When I started studying accelerators for my dissertation in 2011, I was routinely asked whether accelerators were a fad and if they were going to last,” said Cohen, an assistant professor of management at the Terry College of Business and one of the first academics to study accelerators. “What we found is a few accelerator programs improved outcomes for the startups, so we compared the ones that had stronger results versus those that were less effective.”

In one paper Cohen found that, although many accelerators used mentorship as a cornerstone of their program, the key difference was how they spaced out those interactions. Some programs concentrated them upfront and prioritized meetings with both mentors and customers, which is a hallmark of the lean startup methodology. The more the entrepreneurs met with mentors, customers and various stakeholders, the more open they were to new ideas, Cohen said. They often joined the accelerator thinking they were ready to launch a product or scale delivery strategies, but the concentrated interactions helped them determine where they needed to change their plans.

“What they soon learned is they had the seed of an idea, and sometimes they had to pivot quite substantially to make the idea work,” she said. “Those interactions helped them to figure out both that they needed to learn and what they needed to learn.”

Second, the accelerators differed in privacy. Some fostered privacy and were concerned that the entrepreneurs might steal each other’s ideas, yet others forced entrepreneurs to pitch each other frequently and work in cramped, open spaces. The accelerators that encouraged transparency often worked better, and participants often helped each other with execution. Plus, their businesses often were less similar than they initially thought and were rarely actually competitors.

Third, standardized programs tended to perform better than programs that were tailored to fit each venture and each entrepreneur. Often, the entrepreneurs — and even accelerator directors — had weaknesses in certain business skills that they couldn’t recognize by themselves. A standard program helped them to cover common ground, broaden their knowledge and speak a similar language.

In terms of benefits, Cohen’s research team found that ventures that participated in some startup accelerators had better long-term outcomes securing funding, including venture capital and angel investments. They also received more online traffic and hired more employees. The effects were large in some accelerators, including up to 170% more funds. However, the results weren’t universal.

“I often caution entrepreneurs who ask me whether or not they should apply to an accelerator to be careful,” she said. “Do your due diligence in making sure it’s a program that will help your company achieve its goals.”

To help with this, Cohen and two partners produce the Seed Accelerator Rankings Project annually for entrepreneurs to evaluate accelerator programs. Since accelerators can’t always divulge information about their individual startups, these rankings help the programs to showcase their results and performance while still maintaining confidentiality for startups.

Based on her dissertation research, Cohen saw several organizational design elements emerge for the top startup accelerator programs. She found that accelerators with smaller cohorts tend to have stronger performance, and programs sponsored by investors or universities (rather than governments or corporations) raise more money. In addition, programs run by former entrepreneurs are correlated with lower valuations, versus those run by former investors or government employees, which draw higher valuations. Other factors, such as providing workspace, show mixed results and may not be as important to the accelerator’s design.

As the popularity of startup accelerators climbs in 2020, Cohen will continue to study what works and what doesn’t. She also wants to know how accelerators influence the career trajectories of entrepreneurs who participate.

“We know accelerators work for some ventures, but we’re wondering what their impact is on entrepreneurial careers,” she said. “We’re also looking at how these entrepreneurs build relationships with different types of investors, such as angel inventors, venture capitalists and corporate investment.”

Cohen studies accelerator programs with several colleagues. “The Design of Startup Accelerators” was co-authored by Daniel Fehder of the University of Southern California, Yael Hochberg of Rice University and Fiona Murray of the Massachusetts Institute of Technology. Cohen published the Administrative Science Quarterly and forthcoming Organization Science papers with her doctoral advisor Chris Bingham of the University of North Carolina and Benjamin Hallen of the University of Washington.

startup accelerator & incubator

What is a Startup Accelerator or Incubator Do to Help Startups Attain Success

startup accelerator & incubator

Subtitle: How Startups Attain Success with Accelerator or Incubator 

Are you ready to make your side hustle becomes your main hustle? Or maybe you’ve got an idea you just don’t quite have the details fleshed out. You may be considering an incubator or accelerator to help you get started. But what’s the difference?  And What is a Startup Accelerator or Incubator do to help startups attain success? 

Accelerators

Accelerators usually begin with a rigorous application process. Top accelerators like Techstars and Y Combinator are highly selective, accepting less than 2% of applicants into their programs.

Typically, the accepted companies have already demonstrated fast growth and a minimum viable product (MVP). They’re often given a small seed investment and paired with mentors from the accelerator’s vast network.

The goal of the accelerator is primarily networking, mentorship, and resource allocation to skyrocket the success of proven business ideas. A business’ time at an accelerator typically ends with a presentation sharing the growth and development they’ve achieved during their weeks or months in the program.

Things to Consider When Joining an Accelerator:

Is it the right time? Make sure you’re joining an accelerator at the right time. If you’re still searching for a co-founder or your first few employees, you may be a better fit for an incubator.

How fast or slow are you growing? If you’re a fast-growing company, an accelerator might be the right fit. If your growth plan is still developing, an incubator might be a better choice.

Will you relocate? Many accelerators require you to relocate for the few months you’re participating in their program.

Incubators

Some incubators select candidates through an application process while others only work with companies or entrepreneurs passed along from within their network of advisors. Some incubators are focused on specific verticals. For example, Monarq Incubator supports female-led startups through their programs.

Incubators also tend to focus on businesses or entrepreneurs from a certain geographic location — or require participants to relocate to their coworking space or local community for indefinite periods of time.

Participants spend their time at the incubator networking with other entrepreneurs, fleshing out their ideas, determining product-market fit, and creating a business plan. Intellectual property issues are also vetted and dealt with at this stage as well.

The incubator process usually lasts a few months — but is often open-ended — and ends with a pitch or demo day where the entrepreneur presents their business idea to the incubator community and/or investors.

Things to Consider When Joining an Incubator:

Do they have the right mentors? Make sure your incubator can offer specific and experienced guidance for your business or idea. The last thing you need is someone advising you on your shipping business idea who’s spent the last 30 years mentoring young restaurateurs.

Do you need funding now? If you’re looking for capital to grow your business, an accelerator might be a better fit. Incubators focus on preparing the entrepreneur or founder with the business model, plan, and mentorship necessary to confidently pitch their finished business plan to investors.

Can You Get By with a Coworking Space?

If funding, business savvy, and a proven business idea aren’t an issue for you, you might consider simply joining a coworking space. You’ll get the office space you need with built in networking opportunities and events. Some coworking spaces even help you outsource administrative tasks so you have more time to spend on the bigger tasks at hand.

Another benefit of joining a coworking space is that you don’t have to give away equity in your company. Incubator and accelerator mentors generally receive equity in exchange for their expertise. That’s not an issue with coworking spaces.

If you’re joining an incubator or accelerator, make sure you have clearly defined, actionable goals. And be honest about whether or not you can achieve those goals without joining an incubator or accelerator. The process for applying to and joining these programs is lengthy and arduous — and it’s time you could be spending getting your business off the ground without parting with equity.

-Incubators

An advantage of being a part of an incubator is that your startup business gets access to a wide range of financial capital alternatives. In addition, it also provides mentorship, networking, and expertise in your specific startup industry, as well as helps startups turn ideas into new businesses.

Sometimes these benefits can also be a disadvantage to incubators. Certain types of mentorships and networking with entrepreneurs may hinder the startup owner’s focus during the risky early stages of their startup and your idea might not always lift off.

Accelerators

On the other hand accelerators in general work extremely close with everyone involved in the startup, which is an advantage. Accelerators also match the partners and investors to fit with the chosen startup.

In accelerator programmes they also focus on the development of pilot projects for their startups to ensure growth and success. Accelerators try to provide a platform for the startups to grow fast while enrolled in the programme to increase the probability of receiving startup investment.

Y Combinator accepts about 1.5% to 3% of the applications it receives.

A disadvantage of accelerator programmes is that they are short-lived and won’t provide as much support as an incubator would over an extended period, however the short-term acceleration might produce better results in the long run. Another con is that these programs only accept a few startups every year and require equity in each startup they accept.

In the end, it depends on how developed your startup is and what type of support it will need to grow.

At a high level, startup accelerators and incubators are organizations that seek to help startups attain success. Startup accelerators tend to focus on providing startups with mentorship, advice, and resources to help the startups succeed, including a Demo Day, a day to focus the attention of the startup investor community on the startups through hosting a series of investments pitches from the startups to startup investors.

Accelerators tend to not offer dedicated office space to startups (and may encourage startups to find their own dedicated space), but may have a physical location for shared resources and accelerator events such as invited guest speaker talks and advising office hours. Incubators tend to offer dedicated office and development space to the startups for a set period of time.

Startup accelerators and incubators can get involved at all stages of a startup’s development, from idea stage to revenue-generating, late stage. However, most tend to focus on relatively early stage startups, as this is when companies can typically most benefit from outside help.

Startups are usually admitted in batches, with many incubators and accelerators offering 1-3 batches per year. Some focus on a specific industry, market, technology, stage, or other thesis, whereas others are more generalists. Most seek to run an application and screening process.

However, while a handful of accelerators and incubators have been very successful in helping startups attain success, being admitted to a startup accelerator or incubator is not a guarantee for success to a startup founder, and not a guarantee of a sound investment for a startup investment.

accelerator program

Startup Accelerator Business Model, Everything You Need to Know About Accelerator Programs

accelerator program

Subtitle: What you Have to Know About Startup Accelerator Business Model

If you’re looking at a viable business model for your startup, I’m sure you’ve found out by now there are different choices with some fundamental differences. One of those choices that everyone fancies is a startup accelerator business model which provides everything a startup founder dreams of:

  • Financing
  • Education
  • Mentorship

All of it is condensed in a very limited time span, which makes this particular choice an intense experience. Despite all the buzz they receive, these seed accelerators (their other moniker as they support seed and early-stage startups) are not a great fit for every aspiring startup out there. 

Why? Let’s start with the basics:

What are accelerator programs?

One way would be to define them as hybrid models focused on the development of early-stage startups through mentorship, education, and support during a (typically) three-month period. In other words, tech startup accelerator programs “accelerate” the growth (hence the name) of an established business (one that already has a team, proof-of-concept, market validation, and so on) by providing everything necessary to scale. In exchange for the seed money they offer, they take equity in the business (some are non-profit). 

How do startup accelerators work?

First, there is a rigorous application process where the acceptance rate is only 1-2% for the more popular and established programs, while the percentage is just a teensy-weensy higher for the less prestigious accelerators.

Once accepted, a startup enters an accelerator on-site for a precisely defined/fixed period which is typically three months but can also be half a year. You also become part of a cohort of companies, which is another plus because a great deal of the connections you make during the process can turn into long-term, meaningful relationships – not to mention lead to potential funding-related introductions.

Because the accelerator experience is aimed at accelerating the life cycle of a young startup, it’s very intense and immersive with educational seminars and workshops, group and individual mentorship meetings, investor pitches, networking events, and everything else needed to fine-tune the product/service and business model. You are thrown into a highly compressed cycle that would usually take a few years so it’s vital to be able to focus, learn, and make progress at a rapid pace. 

Finally, the speedy learning-by-doing experience comes to an end with a ‘demo day’ – a business version of college graduation where startup founders present their business model. Each startup in the cohort gets an opportunity to publicly pitch to the investors and community, with the possibility of private and follow-up presentations. 

The entire startup accelerator structure is what makes all of this an enticing proposal. There are distinct collective elements that make this form of cultivating early-stage startups fairly unique: 

  • Fixed period
  • Cohort-based
  • Mentorship and education-driven
  • ‘Demo day’ exit

And with that, we reach the question that’s on every founder’s mind:

Are startup accelerators worth it?

With its ever-growing importance in startup communities across the globe, it’s easy to see why the startup accelerator business model is often perceived as the predominant way for scaling and securing funding from investors. While some programs actually provide limited funding or guarantee it in exchange for an equity stake, it’s important to note they aren’t suited for every startup. 

The thing is – they are not mandatory for building and growing a successful business. While not every program works in the same way, the high-pressure environment is one constant you’ll find in every accelerator. Arguably, not everyone is equipped both emotionally and cognitively to thrive under such conditions, which is a must in this case. 

There are plenty of alternatives where you can reap largely the same benefits without devoting yourself to the exhaustive pace of an accelerator. That being said, the truth is these programs have literally transformed promising businesses like Airbnb, Stripe, Dropbox, Udemy and many others into global companies. Plus, the value of accelerators is reflected by the fact that all parties involved (investors, startups, end users, even the economy) benefit from the intensive learning regime. 

Once more, I’ll reiterate: learning-by-doing is critical to scalability, and accelerators make a point to speed up that process by stuffing years’ worth of learning into a few months. As such, they are great opportunities to quickly grow early on but also to attract other investors. 

How do you know if your startup is ready?

Most accelerators follow a similar process so before you decide to apply for one, you need to ask yourself a few key things:

  • Are you in the right stage of development? If you’re growing quickly, have a minimum viable product (MVP) and some form of competitive advantage, you’re likely ready to go a step (or two) further.
  • Can you and your team move on-site for 3 to 6 months? In order to be admitted into the program (and take full advantage of it), you must be on-site, even fully relocate your startup in some cases. 
  • Are you able to dedicate yourselves 100% to your startup during that time? The majority of accelerators require a full-time effort from the entrepreneurial team
  • Can you thrive in a frenzied, highly demanding environment? Because not everyone is suited to handle learning organized in such a fashion, not everyone is coachable in the eyes of experts who lead the accelerator.

On a side note – do you know how to clearly articulate what you (c)are about? Paul Graham of YCombinator, probably the most successful startup accelerator around, says most of the applicants don’t present their startup concisely, poorly explaining what they do and ultimately, conveying little to no relevance and importance. There’s something to think about.

Final thoughts

The startup accelerator business model is designed with an aim to help entrepreneurs of all walks of life scale their business and make an impact. From verifying your idea or concept to validating the market to securing financing and everything in between, there are many benefits that, in the end, significantly improve a budding startup’s chances for success. 

Do note this: addressing these key issues doesn’t automatically make much of a difference as these programs can differ in their success. My advice to you is to take your time, evaluate both accelerators and other options, and think long and hard about your ability to fully commit. Understand both the value you’ll be receiving and gamble you’ll be making.

Successful Startup Accelerators

Learn From Successful Startup Accelerators, What Are the Do’s and Don’ts

“Why do startups accelerator fail?” Here we will learn from successful startup accelerators, what are the do’s and don’ts. 

So we identified the top 7 reasons startups fail so you don’t do. Since many startups offered multiple reasons for their failure, you’ll see that the chart highlighting the top reasons doesn’t add up to 100% (it far exceeds it).

Why do startups accelerator fail?


Following the chart is an explanation of each reason and relevant examples from the post-mortems.

There is certainly no survivorship bias here. But many very relevant lessons for anyone in the entrepreneurial ecosystem.

It’s worth noting that this type of data-driven analysis would not be possible without a number of founders being courageous enough to share stories of their startup’s demise with the world. So a big thank you to them.

1. Burned out/lacked passion

Work-life balance is not something that startup founders often get, so the risk of burning out is high. Burnout was given as a reason for failure 5% of the time. The ability to cut your losses where necessary and redirect your efforts when you see a dead end — or lack passion for a domain — was deemed important to succeeding and avoiding burnout, as was having a solid, diverse, and driven team so that responsibilities can be shared.

What can make conversations about burnout difficult, especially in Silicon Valley, is the widespread belief that building a successful company will always involve some degree of possibly hazardous overwork. As former Uber board member and CEO of Thrive Global Arianna Huffington puts it:

“The prevalent view of startup founders in Silicon Valley is a delusion that in order to succeed, in order to build a high-growth company, you need to burn out.”

Amid the pandemic, burnout became even more prevalent among tech workers: 68% of tech employees said they felt more burned out working from home, according to a survey by Blind.

Various founders have spoken up about how damaging burnout can be. Former Zenefits CEO Parker Conrad said,

“I think people are unprepared for how hard and awful it is going to be to start a company. I certainly was.”

2. Pivot gone bad

Pivots like Burbn to Instagram or ThePoint to Groupon can go extraordinarily well. Or they can start you down the wrong road.

As The Verge reported on Inboard Technology‘s failed pivot:


“The startup was one of the highest-profile competitors to top electric skateboard company Boosted, and last year announced plans to enter the electric scooter market — a push that seems to have doomed Inboard.

Founder (and now-former CEO) Ryan Evans told The Verge his team had locked down ‘a very large order’ from ‘one of the largest European scooter operators,’ which explains why the company quickly pivoted away from trying to sell its first e-scooter directly to consumers earlier this year. But Evans said the development timeline for Inboard’s e-scooter ‘outstretched’ its financial runway.”

After investors refused to inject more funds, the company was forced to shut down.

3. Disharmony among team/investors

Discord with a co-founder was a fatal issue for startup post-mortem companies. But acrimony isn’t limited to the founding team, and when things go bad with a board or investor, it can get ugly pretty quickly, as evidenced in the case of Hubba.

Douglas Soltys writes for BetaKit:

“Considered for most of the decade one of Toronto’s hottest startups, Hubba hit choppy waves in 2018, as the company lost its chief technology officer and chief marketing officer in an three-month span, in addition to two rounds of layoffs which saw headcount reduced by almost half.

It is unclear to what extent the COVID-19 pandemic had hampered Hubba’s growth and customer base. However, one source BetaKit spoke with claimed a months-long battle between [Hubba CEO and founder Ben] Zifkin and Hubba’s board of directors regarding the ongoing viability of the company.”

At Pellion Technologies, the end came more quietly, as its major backer Khosla Ventures lost faith in the company’s ability to execute:

“According to former employees, all of whom requested anonymity, Khosla Ventures lost confidence that Pellion could make enough money serving a niche market. The lithium-metal technology worked for products like drones, but the big money in the battery world is in the automotive sector. Investors weren’t willing to sink the money needed to develop the battery for electric vehicles.”

In March 2019, Khosla decided the company would be shut down and removed Pellion’s name from its online firm portfolio.

4. Poor product

Sometimes, it all comes down to the product — and a flawed one was enough to sink companies in 8% of cases.


According to a Forbes investigation into finance and accounting platform ScaleFactor

“ScaleFactor used aggressive sales tactics and prioritized chasing capital instead of building software that ultimately fell far short of what it promised, according to interviews with 15 former employees and executives. When customers fled, executives tried to obscure the real damage.”

Bad things also happen when you ignore what users want and need, whether consciously or accidentally.

Here’s what Shoes of Prey wrote about its vision to enable consumers to personalize their own shoes:

“We learnt the hard way that mass market customers don’t want to create, they want to be inspired and shown what to wear. They want to see the latest trends, what celebrities and Instagram influencers are wearing and they want to wear exactly that — both the style and the brand.”

5. Product mistimed

If you release your product too early, users may write it off as not good enough, and getting them back may be difficult if their first impression of you is negative. And if you release your product too late, you may have missed your window of opportunity in the market.

As Stefan Seltz-Axmacher, CEO of autonomous trucking tech startup Starsky Robotics said,

“Timing, more than anything else, is what I think is to blame for our unfortunate fate. Our approach, I still believe, was the right one but the space was too overwhelmed with the unmet promise of AI to focus on a practical solution. As those breakthroughs failed to appear, the downpour of investor interest became a drizzle.”

6. Not the right team

A diverse team with different skill sets was often cited as being critical to the success of a company. Failure post-mortems often lamented that “I wish we had a CTO from the start” or wished that the startup had “a founder that loved the business aspect of things.”

At Fieldbook, which shut down after failing to build a sustainable business model for its database product, co-founder Jason Crawford wrote in his post-mortem blog post that the company’s inability to make key hires was one of the reasons for its downfall:

“I was blindsided by the difficulty of hiring. Hiring was something I’d done successfully for years, including in the early days of Fieldbook and in a previous startup. But at a time when every engineer wanted to work on AI, self-driving cars or cryptocurrencies, a SaaS startup with modest, sporadic growth wasn’t very attractive. I knew that investors would need to see strong, consistent growth before our Series A, but I didn’t expect that engineers would need to see it to even join before Series A.”

Lack of experience, combined with mismanagement, was one of the factors behind the downfall of Katerra, the high-flying construction startup which raised nearly $1.5B in funding. As The Information summarizes,

7. Pricing/cost issues

Pricing is a dark art when it comes to startup success, and startup post-mortems highlight the difficulty in pricing a product high enough to eventually cover costs but low enough to bring in customers.

Hey Tiger struggled to find the right balance in its effort to produce high-quality chocolate and address inequities in the cocoa industry, writing,

“But like any start up, there comes a time when you need to take a hard look at the company’s long term viability. Although we designed a business that customers absolutely love, it proved hard to scale into the profitability it needed to be a sustainable social enterprise. As the scale of our chocolate production grew, so did the tensions between the very things that made Hey Tiger special. Ultimately while succeeding in one goal, we couldn’t make the other.”

The 2019 shutdown of genetic testing and scientific wellness startup Arivale came as a surprise to many partners and customers, but the reason behind the company’s failure was simple: the price of running the company was too high compared to the revenues it brought in.

And learning from the succesfull startup accelerator, those things 11 Tips for Succeeding in a Startup Accelerator

1. Be Open to Mentorship

Angela Ruth You’ll succeed in an accelerator program when you’re open to the advice of the experts running the program. Even if this means pivoting your startup or making significant changes to your business model, it’s important to listen and consider what these experts are telling you. They have the knowledge and experiences that can help ensure your idea becomes a sustainable business. –Angela Ruth, eCash

2. Befriend Others

 Rather than brushing off other companies in the program that you think have bad ideas or won’t be successful, you should befriend those founders. If their companies don’t end up working out, they’ll be looking around for new opportunities, and could be great resources for you and your company once hiring talent becomes your biggest problem (which tends to happen after accelerators). –Mattan Griffel, One Month

3. Focus on Progress
Julien PhamOne great advantage of an accelerator is the opportunity to have intense, focused attention on your company in a short period of time. No more call-backs, reschedules, and meetings months out. But you will also hear contradictory advice–lots of it. Take everything with a grain of salt, focus on building lasting relationships, and don’t forget to make time for actual progress. –Julien Pham, RubiconMD

4. Take Advantage
David CiccarelliKnow that your time at the accelerator will fly by, and you only have a brief period to make the most of the resources available to you. This means attending all the sessions and workshops; meet with your mentors and take them out for lunch to glean even more advice from them. In short, throw yourself into the entire experience. Soak it up while you can, because one day, it will be over. –David Ciccarelli, Voices.com

5. Do the Work

As with any mentorship, it’s important to dedicate yourself fully to the experience. If your program gives you assignments, be prepared to do the work. Attend any meetings fully prepared to ask targeted questions. Take coaching calls seriously by having a goal set for each session. Don’t over-invest yourself in anything else while enrolled in the program; make the time to make it work. –Nicole Munoz, Start Ranking Now

6. Check Your Ego

Zac Johnson It’s easy to think you know a lot about what you do, but this mentality can be a huge disadvantage. When participating in groups or accelerator programs, check your ego at the door and look at everything as a learning experience. As the saying goes, “If you’re the smartest person in the room, you’re in the wrong room.” Learn from others, participate as often as possible, and take notes! –Zac Johnson, How to Start a Blog


7. Build Your Network Aron Susman Tap into all the networking opportunities. Accelerators bring together the best minds across many different industries, so take advantage of the unique opportunity to connect with as many people as possible. With these new connections, you’ll be able to build relationships that can help your business, or even help you identify problems that have hindered others in the past. –Aron Susman, TheSquareFoot

startup accelerator indonesia

Early Steps of growing Succesful Startup business with Help of a Startup Accelerator

Early Steps the application process is done in stages

Startup Accelerator | Building a startup business not easy in the beginning, that’s why you need help from a Startup up Accelerator. Here are steps on how to grow your startup business with help of a startup accelerator.


1. Application

 An application will ask for specifics on a startup’s idea, market, traction, team, and other aspects vital to success.


2. Assessment

 Promising teams from the pre-screening phase move on to be assessed for investability, revenue potential, and overall strength of the product/service offering.


3. Interview

At this stage the accelerator is very interested, but wants to know about the team, product and evidence of traction. The interview process typically takes 20-30 minutes. 


4. Evaluation 

Interviewees provide documents to prove their statements about revenue, legal standing, or any claims made about the company.


5. Acceptance

Upon completion of the final evaluations, the investment committee will meet to finalize where the funding will go during the 12-16 week program. Roughly 30-60% of the teams that made it to Assessment phase will receive funding.

6. Helpful sources to spark new ideas

Try and Find Inspiration in the World Around you


Sometimes you need a source of inspiration to spur that lightbulb moment. Try and find inspiration in the world around you. Here are four places to look for inspiration:

Study successful entrepreneurs. It’s hard to know where you’re going if you don’t know where the great entrepreneurs before you have been. Read origin stories and study successful business titans. How did they come up with their business idea? What advice do they have to up-and-coming entrepreneurs? Learn all you can before you embark on your own journey.

Use your smartphone. If you know you want to create an app, but you’re not sure exactly what you want to create, search through the app store. Search categories of interest. Do you notice whether anything is missing or how apps in that category could be improved?

Can you find similar products or services using search engines? The internet is incredibly helpful when it comes to finding products and services that you are in the market for. But have you ever searched and searched for something, and not been able to find it? That should be a tipoff of a potential opening in the market that should you act on.

7. Turn to social media. 

People on social media are often quick to identify issues and problems they have with current products, places, processes, etc., but few take the time to come up with a solution. Reading through people’s grievances can give you great insight into problems other people have that you can solve. Online review sites can offer the same.

8. Best practices for startup accelerators

Given the potential—but not the guarantee—of significant benefits from accelerators on local startup ecosystems and wider economic growth, it bears considering what works:  What traits and conditions make accelerators effective?

Recently, Brad Feld sat down to discuss the accelerator concept, and importantly, accelerator best practices.

Feld provides a number of useful perspectives, given his experience with accelerators, and so it’s worth noting a few of Feld’s “dos” and “don’ts” for accelerator design and operation:

Along these lines, Feld suggests strong accelerator organizations:

  • Understand what an effective mentor is and knowing how to effectively engage with them throughout the program’s duration
  • Have a good rhythm for the program that is absorbable by founders—don’t go too fast or too slow
  • Create awareness of the stress and conflict points among and between the various participants (companies, founders, mentors) that will inevitably occur throughout the program, and strategically channeling those into learning opportunities embedded in the program itself
  • Build a culture and network around the accelerator that feeds on itself and perpetuates a lifetime process of learning
  • At the same time, problems arise when accelerators:
  • Fail to have a clear view of the mentor dynamic—not helping mentors understand how they can be effective in working with companies.
  • Fail to set expectations at the outset around what the accelerator can do, and what is sensible given a company’s individual situation.
  • Fail to focus on the people, rather than idea (at TechStars the mantra is people, people, people, idea—the idea is the price of admission, the key thing is the people), because it is the people that matter most and will be lasting, while the idea will morph a lot.
  • Fail to understand how to scale their program (how fast do you want to grow? What is your strategy? To expand geographically? To expand the number of programs?).
  • Fail to have a point of view about what they are trying to accomplish.  Simply emulating what other accelerator programs are doing, for example, fails to understand that there is more than one approach.

Tip: Throughout the application process, write concise answers that leave room for future conversations. Create interest in your proposal but don’t try to answer every possible question.

Make it easy to access critical business information with links to slide decks, LinkedIn profiles, videos, references, and anything else you think would help investors realize the potential of your startup.

Useful for accelerator creators and managers, these watchwords should also be considered by state and local policymakers, university officials, and economic development leaders who are increasingly investing in or otherwise engaging in the establishment of new accelerators in U.S. cities.

The systematic information available about the impact of startup accelerators is as yet thin and fragmentary. Much research needs to be done to better understand the effectiveness of these programs and the broader impact they have on startup communities—particularly as national and regional authorities look to them as tools for economic growth.

However, early evidence points to the potential for substantial benefits. Done well, these programs can be effective at helping some of our most high-potential companies reach goals more quickly and assuredly. Perhaps more importantly, they have been shown to attract more investors and focus energy on the nascent startup communities that have been spreading throughout the United States, which will no doubt be critical for boosting high-impact entrepreneurship and hard-to-come-by growth in the future.

Examples of Most Successful Startup Accelerator in the World

Global accelerators are fueling entrepreneurs and startups with supportive ecosystems and plenty of fresh funding.  These programs provide mentorship and capital in return for equity. This is put in place to help a start-up grow over a three to four month period.

Besides the investment, accelerators typically offer their startups free office space, business and management consulting, feedback on the product, and access to investors in the form of a demo day.

During demo days founders would present their pitch deck to an audience of angel investors as well as representatives from Venture Capital firms. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel.

Staff from accelerator programs take into consideration many common themes when reviewing applications, such as addressing a large market, having a bold and crazy idea, showing some form of traction or signs that the company will be able to hit a milestone while in the program – but the most common, and debatably most important, is the team behind the company.

Getting into some of these programs is very difficult as acceptance rate can be as low as 1.5%. In such case, for every 7,000 applications there will be only 106 spots available. For comparison, Stanford has a 5.1% student acceptance rate and Harvard’s acceptance rate is around 5.9%. Rounding out the most active 20 accelerators are firms in Shenzhen, Sofia, Buenos Aires, New York, Brussels and Toronto. This shows that while Silicon Valley may be the most established VC and startup hub on the map, it now has an intense amount of competition from all types of locations around the globe.

Success Based on Number of Exits According to data from Crunchbase below are 10 accelerators based on successful number of exits.

1. Y Combinator

Y Combinator is a pioneer in the startup accelerator space. Each year the accelerator funds a group of new startups with $120k. A number that was lowered to reduce friction between founders. So far, the companies it has been involved with have a combined valuation of over $100B. Some of the most notable include: Airbnb, Dropbox, Stripe, Reddit, Twitch, Coinbase, and Weebly.

2. 500 Startups

500 Startups is a seed and early stage venture capital fund, consisting of 4 major funds and 13 micro funds which have invested in startups in at least 60 countries. Funded startups include Udemy and Credit Karma. Exits have included sales to Google and Rakuten. 500 Startups recently took in equity from Abu Dhabi Financial Group, giving the firm one of its only two board seats.

3. Techstars

Techstars funds, mentors and accelerates startups. Its accelerator program has produced over 1,000 companies valued at over $8B. Techstars is the name behind Startup Week and Startup Weekend, which spur entrepreneurs to kick procrastination to the curb and launch new ventures in a matter of hours.

4. Plug and Play

Plug and Play Ventures has put 51% of its investments into pre-seed ventures, achieved 8 exits in 2017, invested in 262 new startups last year and holds networking events every day. The accelerator’s in-house VC is reportedly willing to write checks from $25,000 to $500,000. It’s portfolio companies have raised a combined $7B.

5) MassChallenge

Although based in Boston, MassChallenge has accelerator programs around the world, with locations in Israel, the UK, Mexico and Switzerland. In the past 8 years the accelerator says its startups have created 80,000 jobs. The program appears to be heavy in Biotech and Fintech.

6) SOSV

SOSV closed its own third round of funding for $150M in January 2017.  The ‘accelerator VC’ started by Sean O’ Sullivan prides itself on creating real products, not just digital ones. With access to real labs and makerspaces it appears to be popular with food-tech and biotech startups.

7) Startupbootcamp

Startupbootcamp runs IOT, Fintech, Insurtech and Foodtech programs around the world from Singapore to London, Mexico City, Mumbai, Dublin, Dubai and Amsterdam. To date Startupbootcamp has accelerated startups with an average funding amount of 1.168M Euros.

8) Internet Initiatives Development Funds (IIDF)

IIDF is established by the Agency for Strategic Initiatives. It is a Russian venture capital fund. This accelerator invests in tech companies in the early stages of development. IIDF facilitates startups in Retail, Adtech, CyberSecurity, BigData, IoT, and Edutech, etc. Almost, every year more than 4,500 startups participate in IIDF’s online basic programs. There are also 20,000 online attending events and hackathons provided by IIDF. Internet Initiatives Development Funds have invested in 335 companies and their total number of successful exits is 21.

9) Wayra

Wayra is a global technology innovation hub. It was founded in 2011 in Latin America and then expanded in many countries. Wayra is financially supported by one of the largest telecommunication companies in the world called “Telefonica”.

Wayra invests around $50,000 in startups. Wayra also claims that 45% of its startups have female founders which is a good thing. Wayra invested in 960 companies and the total number of successful exits is 18.

10) Startup Chile

Start-Up Chile is a seed accelerator. It was created by the Chilean government in 2010. It is located in Santiago, Chile. Start-Up Chile provides equity-free investments to its qualified startups.

It is the most unique and active accelerator program worldwide. It provides almost $80,000 equity-free funds to its startups and $100,000 in perks.

Start-up Chile invested in 837 companies and the total number of successful exits is 16. The best of Start-Up Chile is that it provides pre-accelerator programs for startups led by female founders in the world. This program is called “The S Factory”.

Best Startup Accelerator in the World is trying to fuel up startups and entrepreneurs with plenty of funding and supportive ecosystems. These accelerators also provide mentorship and capital in return for equity. The mentorship continues for at least three to four months so that an entrepreneur or startup can get maximum support in taking their idea/business to the next level.

Accelerators not only invest in these startups/entrepreneurs, but they also provide them free office space, business and management consultancy, product feedback, and open access to different investors.

 Access to different investors can be in the form of one day demo. During the demo day, founders would present their pitch to investors and representatives from Venture Capital Firms. This demo includes a detailed presentation of the startups and how they are working hard to produce something big.

startup accelerators

Most Succesful Startup Accelerators in The World, What are They Doing Right

Nothing is easy at the beginning. There are processes and struggles but we can imitate from what is done and the lessons shared by successful Startup Accelerators in The World.

1. Solving real problems.

Spenser Skates, co-founder and CEO of Amplitude, says that the most important factor for a startup comes at the very beginning: figuring out exactly what problem your customers need you to solve.

In the early days of a startup, founders need to prioritize talking to potential customers and really understanding their problem so that they can help solve it. In fact, customer feedback has remained essential to Amplitude’s product development and company success.

2. Staying focused 

Will Canine, cofounder and CPO at Opentrons, has taken his company through two tech accelerators. The first was Hax, a hardware-focused accelerator based in Shenzhen, China. Then, Opentrons was accepted to Y Combinator, which is really what put the company on the launch pad.

“Probably our biggest learning that comes with it is focus. Having clear, concrete goals and a strategy for getting there keeps everyone in the company on the same page, working toward the same thing. “Once you feel the clarity of this type of focus–and see the huge advantages in productivity and progress it gives–you will never want to work any other way.

3. Leadership, values, and culture set you apart.

Having a great idea is only part of the battle, says Fred Stevens-Smith, cofounder and CEO of Rainforest QA. To make your company truly impressive, it’s all about the human element.

Another thing Stevens-Smith appreciated about the tech accelerator experience was simply the networking, learning, and camaraderie that came built in.  being a CEO is hard. Building a company is hard. For everyone. It’s easy when you’re inside the founder journey to think that you’re exceptionally bad compared to your peers, so it’s crucial to see that other founders are experiencing the same rollercoaster as you are.”

4. Be intentional about figuring out how to scale–in all aspects of the business.

The eventual goal of any startup is to grow, of course. To Vivek Ravisankar, cofounder & CEO of HackerRank, buckling down and learning how to scale has been critical.

“Agility is important at scale. It’s easy to do this when you are a three-person company, but how do you do this, and make sure people are aligned with the company proposition and values, when you are 100?

“Hiring people at scale. The bar is extremely high for the first 10 hires. The most important part is figuring out how to maintain this bar at scale.

“Customer love. When you’re first starting out, it’s extremely important to make 10 customers happy. But how do you do this for 100 customers, 500 customers, 1,000+ customers?”

The earlier you start thinking about how to scale your company, the better you’ll be able to grow. “These lessons were very instrumental in the early days of founding HackerRank,” says Ravisankar.

5. Pay attention to what people want, not just what you think they want.

The more transparent you are about what you’re trying to create, the more time you’ll have to gauge the reactions of your target audience. Segment cofounder and CEO Peter Reinhardt experienced this during his time for program Startup Accellerators.

6. Lean on your mentors. When you’ve made it, pay it forward.

Startup founders may feel like they have to bootstrap their companies all on their own. But you’ll get further if you embrace the power of mentorship and learn from those who’ve gone through the process before you.

startup accellerator

The most successful startup accelerators in the world, what do they have in common?

startup accellerator

As most of you know, startup accelerators help connect startup companies and investors by doing business partnerships for periods of time. When a startup company has a plan for collaboration in its mind, it must have those ‘special’ criteria that act as requirements. The most successful accelerators must possess those criteria. Here are the top 5 standards compiled by the HUB.id team from various sources.

1. They focus on collaborations.

They usually focus on collaboration between mentors and founders. It is important to note that for a startup company to flourish, they create impactful partnerships. The mentor’s ideas with the founders are aligned, and they know they are here to change the world. 

Here on HUB.id, we’re looking for startups that have already acquired funding, so the mentoring that will take place will not be too basic. The inventors already had previous knowledge.

2. They strive for innovation.

They focus on innovation while staying true to inventors’ intent. Of course, they can pivot just a little but not do a drastic change because of a single accelerator’s needs. Here’s where integrity plays the most prominent role. You change, you waste.

3. Demo Days

The best startup accelerators routinely have their demo days where inventors can pitch their ideas to angel investors or investors in general. There are also days when inventors can learn the financial aspects of their business.

4. High Exit Rate

Numerous sources such as Forbes.com, gathering data from Crunchbase, ranked accelerators based on a metric called Exit numbers. According to betaboom.com, top accelerators like Techstar Boulder Accelerator even have an exit rate as high as 24.7%. One of the top accelerators, such as Y Combinator that birthed Reddit, Dropbox, and Airbnb for a total of 9.7% exit rate.

5. Transparency

According to an article by newswise.com, in an environment where inventors can communicate openly with mentors and fellow inventors, they can help each other out. When working in an open space together, it was initially believed there would be competition among inventors. It turned out it was unlikely that they would’ve competed amongst them.

So those are the five main criteria for top startup accelerators by HUB.id. Do you think there are more not listed here in the article? Let us know in the comment section!