What should you expect from an accelerator?

I have written previously about how to evaluate accelerators and choosing the right accelerator since there are so many of them these days and also about what the goal of an accelerator is.

I wanted to share somethings that entrepreneurs should expect from an accelerator from a perspective of a startup founder. I think the best thing that has happened is that so many accelerators have opened in the last few years. Similar to eCommerce companies in 2010-11, I expect many to close or shut down within the next 2-3 years.

There are 3 top things an entrepreneur needs according to me:

1. Access to customers: Whether it is beta customers for feedback, early adopters for providing traction (paying customers) or larger customer for growth, startups thrive on customers. Depending on the stage of your company, if an accelerator does not help you get customers, they are not doing their job. That’s the first lens I would adopt to judge accelerators. If you have access to customers, you can practically write your own destiny. If all the accelerator does is provide advice on getting customers but does not provide introductions to customers, or have customers be ready to adopt and review your platform, you are not going to get much traction or be “accelerated”.

2. Access to talent: In India, for startups, good development talent is hard to get , marketing & sales talent is harder and design talent is extremely challenging to get on board. If your accelerator does not help you with talent sourcing or provide talent in house to help you tide these critical areas when you need them most, you should run away. I have heard the notion that the graduates of the accelerator will help you, but entrepreneurs helping other entrepreneurs by providing time  is not very sustainable. Most of the very successful startups and their executives are extremely busy. While a sense of pay-it-forward does exist, its just not sustainable is what I have found. There’s no substitute for dedicated people to help you with development issues, help you with User experience and design (mockups, wireframes, HTML/CSS development and information architecture) or marketing talent to roll up their sleeves and run campaigns.

3. Access to capital for growth: While I am personally not a big fan of funding as a metric for accelerators to gauge their success, capital is nonetheless needed to grow and thrive, especially in India, where most founders are not serial, successful entrepreneurs or those that come from a “rich family”. So look for an accelerator that provides you an extensive and wide set of investors from seed to early stage and from venture to growth. If all the accelerator does is “showcase you in front of several investors” but does not actively nudge investors to help take a closer look at your company, I dont think they are doing their job.

There are several other things that matter which include a support system of the existing entrepreneur network from their previous batches, access to meetings internationally that possibly help get some global exposure, and a great space to work from, besides other things. However if you dont have access to customers, talent and capital, there’s no value in joining an accelerator.

9 thoughts on “What should you expect from an accelerator?”

  1. As Bill Clinton would say “Its the customer, stupid!”. #2 is important too although #3 is severly overrated. It would be interesting to understand how Microsoft Accelerator fares on #1.

    1. Vivek, I agree that #3 is overrated, but I have heard from 90% of entrepreneurs that they care about that the most. Rare is the entrepreneur (even at our own accelerator) that does not judge us by their ability to get funding.

      In terms of seeing how folks fare, I think an open wiki style comparison chart is absolutely the way to go. Put the criteria in the rows, the accelerators in the columns and have a validated set of entrepreneurs from the accelerators judge the accelerators on those criteria.

      At the Microsoft accelerator, we pride ourselves on weekly access to customers. We took a while to get those relationships setup so many of our previous batch did not have access to them before, but they now do.

      1. Mohan,

        Your message seems to be similar to that of Sramana Mitra. She also keeps stressing that entrepreneurs should focus on customers, revenue, profits and not funding but most focus on funding (and only 1% get funded). I personally prefer a razor sharp focus on customers and their reaction to the product .. do they like it, are they happy, enough to spread the word, how they use it, are they looking for any more features etc. because I feel if the customer falls in place then #3 should follow. #2 will be a problem till you reach some size in India given that people feel you woudl work in a startup only if you cannot get a job with big corporates.. probably one of the options would be the Zoho route.

        But I have a question, would revenues be good enough for a B2C during its growth phase to avoid looking at #3?

  2. Viewpoint
    #3 is a mean to an end (however big/small it might be), it also works like a fuel that can bring about a sense of accountability early on (I will do this to the best of my ability, because someone has shown faith in me, trusted me with resources) and hence its importance is valid to an extent to which it can help startup get access to #2, which could lead to #1 and beyond.

  3. Hi Mukund,
    Expectations from the accelerators are nicely elaborated.
    Point #2. Access to talent, specially design talent is extremely challenging to get on board for startups absolutely true! We help few startups remotely on their User experience and design. We run a designers community focused in India, and also we nurture our community on UI and UX specially for statups, We will be really glad to collaborate and help startups with User experience and design (mockups, wireframes, HTML/CSS development and information architecture) inside any accelerator.

  4. Hi Mukund,

    Great post. I’ve been doing a little bit of research on the Indian accelerators lately. Here are my two cents:

    1. Lack of Differentiation & Unique Selling Point —

    Most accelerators have a very simple & bare bone web presence. While it explains the program and what “deal” they offer quite clearly, they don’t tell entrepreneurs whats their unique value proposition? Why should entrepreneurs choose them over others? While there are accelerators that have some key differentiators, like, as an example — Microsoft Accelerator — doesn’t take equity, while all others do (I’m not sure if Microsoft places it as a strategic USP, but entrepreneurs would see it that way to a certain extent), specially when accelerators are forcing their customers (entrepreneurs) to work harder to choose which accelerator they should apply for. Another example — Morpheus says that if you are looking purely for funding, then they are not the right partners for the entrepreneur. This is a differentiation that i connect with directly, because funding is not a priority for me. However, this was not easy to find. While some entrepreneurs would take funding not being their focus as a negative, it will only show their naivety & less experience in entrepreneurship.

    2. Lack of updates & openness on portfolio companies —

    Most accelerators are very focused on short term immediate relationships with the current batch of portfolio companies. However, its worth noting that accelerators can only succeed long term if they are dedicated enough to continue supporting alumni startups way beyond “graduation”. While most accelerators in India are quite new, its critical that this is embedded in their DNAs as they expand their batch sizes and see a dramatic increase in alumni numbers over the next 5 years. Regular updates on the state of the portfolio companies on their blog would also help next generation of entrepreneurs to decide which accelerator is right for them.

    3. Mentors/Networks

    While most accelerators show their long list of mentors/networks in shining glory, its extremely hard and time consuming from an entrepreneurs perspective to understand which mentor could add the best value to their startup based on mentors industry connections and domain expertise. Some of the accelerators have 70-100 mentors listed on their websites.

    How on earth do they expect the entrepreneur to go through them and see the value they bring on the table? Hyperlinking their photos to linkedin profiles shows lack of thought and negligence on their part. The least they could is add some sort of search filtering based on skill sets, experience, domain expertise, etc.

    Thanks

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