Joining an accelerator or incubator is sometimes the first thing a startup founder does to get their business off the ground. Sometimes a startup’s success can be solely due to an incubator but other times it can be a time waster.
Startup founders need to consider certain important things before joining an accelerator or incubator. Startup founders also need to ensure that they are joining the correct incubator that suits their needs.
Dynamic Business asked the experts what startup founders need to consider before joining an accelerator or incubator.
David Burt, Executive Manager, ON Innovation Program:
A great idea will only get you so far. This is why you should consider if your idea is ready for a business model, and this means answering a few questions before you go knocking on the doors of accelerator programs.
Firstly, it’s important to know if the business idea is ready and developed enough to be both commercially viable and scalable. Hence you need to have a good grasp of the market and the gap your business is aiming to fill. Sometimes people think the product is so good that it will sell itself. Nothing sells itself and often, your biggest danger is that what you are selling isn’t sustainable and you just don’t know it yet. When seeking to join an accelerator or incubator, your business should have evidence for who the potential customers are and be able to demonstrate empathy with the problems they experience. Further, knowing your competition is crucial – and if your answer is “we don’t have competitors”, you haven’t looked hard enough.
Timing is everything. Being too early is just as dangerous to early stage ventures as being too late. We all know of products that missed their window of opportunity. Understanding the history of your idea is a must. Who has tried something similar before? Did they succeed or fail? Be relentlessly curious about who tried your idea in the past – learning from the failures of others is a cheap way to de-risk your future.
It’s also important to ensure you have the right team in place. It takes an extreme amount of confidence to take a new idea into the world and no one can successfully make this journey alone. Does your team have the skills needed, or the motivation to build them? The team needs to shift and grow with your idea – and if you are onto something great, the odds are that your new venture will scale quicker than your ability to lead it.
Ren Butler, Team & Community Lead, Inspire9 Coworking Space:
Make sure it’s not just about the money. If it’s only about finding cash resources to go farther, find a loan. Joining an accelerator needs to be about strategically positioning yourself within a group of peers and experts that can take you farther or faster than you could go on your own. Joining an incubator space is similar but typically not as fast paced. For both, you need to be sure you are inspired, energised and ready to be vulnerable around the people you are building your company with everyday. Accelerators and incubators were designed to amplify the power of resources; tangible, cognitive and social networks for startup teams. Growth inflection points are trying on the best of days and it’s important that everybody in the team is ready to deal with the stress before committing to a program or incubator space. Knowing your gaps and blindspots as a founder is key. Any program or network there to support you needs to help fill in your gaps. When evaluating an incubator space or accelerator program, I suggest founders map out their own personal SWOT analysis and list out the aspects of a program they’d gain value from based on that. Shopping for a startup program is like going to the grocery store. Don’t shop for programs hungry for cash. You’ll end up regretting your choices and joining an accelerator or incubator is an important inflection point for your startup.
Petra Andrén, CEO, Cicada Innovations:
Firstly, incubators are physical spaces offering longer term support and business services to startups, and ‘accelerators’ are programs offering assistance to cohorts of 10 to 12 companies over a set period of time – it can be problematic when people use the words interchangeably.
When seeking to join an accelerator program, start-ups should consider a number of important factors. Firstly, who runs the accelerator and what are the investment terms – how much (if any) equity are you giving up and on what terms? The track record, mentor network, and format of the accelerator is also critical – what have alumni gone on to achieve? What expertise will you be able to access? If you’re a “deep tech” start-up, you’ll need domain experts as well as founders and businesses builders. Is it intensive classroom style delivery where you also get to interact with other participants of the cohort, virtual delivery, structured or unstructured?
Finally, you need to consider post program support – what happens after the program finishes? Cicada Innovations is the only incubator I know that provides up to 5 years’ subsidised residency and long-term support in a physical incubator with access to a community of deep tech entreprenuers, specialised infrastructure, and talent to selected graduates after its range of accelerator programs. There is definitely a massive advantage to that in terms of de-risking your business and maximise the likelihood of success!”
Richard Dale, Committee Member, Sydney Angels:
When considering an accelerator or incubator, it’s important to look at its track record, and determine whether there is evidence of successful graduates. The quality of mentors, and relevance of their experience and expertise to your industry and type of business, will strongly affect your success, so this also needs to be considered. Finally, ask yourself – what do I get for my money, and my equity? Experts, working capital, and practical domain specific help; or book learning, expenses, and generic advice and services? The relevance of the answers to these questions will vary from start-up to start-up, so it pays to get a solid understanding of what you need to succeed before throwing yourself headfirst into any incubator or accelerator program.
Jonathan Englert, Founder, Andiron Group:
Think hard whether you really need an incubator or whether your startup would do better “in the wild.” There are many examples of startups that have thrived without incubators. You also need to think hard about whether you need to commit all of your time to your new venture. In many cases, you might not want to give up your day job for many months or even years as you develop and test your idea. If you do go the incubator route, remember to do your own thinking when it comes to all of your communications, especially media, since your interests may not align with the incubator which will have its own promotional agenda. In other words they may want to publicise you when the best approach for many early stage ventures is to stay quiet while an identity is being formed.