Create an unfair advantage, so that you and the startups you work with can win together.
Launching new ventures that win shouldn’t be rocket science. (Unless, you know, it is.) But many corporate accelerators and venturing initiatives don’t yield the desired results. Why?
We’ve set out to find out. By diving deep into different accelerator models around the world and drawing on our experience as accelerator leads, investors, and entrepreneurs, we’ll be talking about what works – and what doesn’t.
First things first: not all accelerators are the same
Many decisions go into designing and launching an accelerator – company stage, location, budget, overall goal. Each accelerator, and the startups that it will be able to impact, will be unique.
What unfair advantage can you offer startups that no one else can?
If you’re getting stuck, here a few places to start:
1. Provide problems worth solving
We’ve all heard it: most startups fail because they’re building something nobody needs. You can set the startups you work with up for success by providing the transparency and access they need to truly understand the challenges they are trying to tackle. If you can offer startups validated problems – or, better yet, a path to a contract or pilot program if they solve those problems – you can create win-win partnerships that will last.
Bonus points if the problems you are facing are industry-specific or “un-sexy”. In-depth knowledge of a problem that no one else is even aware exists can be the edge that a venture needs to succeed.
Don’t take my word for it – just look at some of the biggest and most “boring” startup success stories out there. Only a team that intimately knew the maze of Excel files, emails, faxes, and paper manifests that freight forwarders wrestle with could have built Flexport, “The unsexiest trillion-dollar startup”.
2. Hand over the keys to your underutilized assets
Whether it’s material that could be re-used or re-purposed, unsold inventory, or data, countless companies have been built from underutilized assets. Building a sandbox for entrepreneurs to access these assets might be your accelerator’s competitive advantage.
So ask yourself: Do you have access to datasets that a startup would kill to get their hands on? Unused machinery? Excess inventory?
Today, these are a cost centre for you – but with a fresh look, they could be the missing puzzle piece for a successful new venture.
3. Provide services or tools they will need anyway
If you or a corporate partner offers a product or service that startups will need in the regular course of business, you may be able to defray costs for the startups you work with.
(Make sure you’re offering something that is truly essential – the best founders will quickly discover and eliminate any thneeds.)
This may be an option if your company or a corporate partner provides a product or service that is specific enough that it would be challenging to find elsewhere at the same price.
While free office space is easy to come by these days, the free advertising airtime some media companies make available or the discounted access to turnkey laboratories that JLabs residents receives are still attractive offers for many startups.
4. Open doors
The existing relationships you have – with customers, suppliers, and distributors – are a valuable resource you can share with startups. If your company or a corporate partner has a powerful household brand, consider how you might use that to supercharge startups’ marketing, PR, or partnership efforts.
Consider creating a process to make warm introductions for startups who graduate the accelerator or complete a successful pilot with you. You might do this through a customer access program, likeMicrosoft’s, or by helping startups reach your customers directly, like Coca Cola did with Spotify by promoting the streaming service on their cans.
5. Provide funding to fuel growth
Without seed funding, most startups will die before they even get off the ground. Equipment, office space, staff – all these cost money. Whether you are focused on engaging external startups or creating internal ventures, access to capital will be a key success factor.
This question is particularly important if you’re focused on internal startups: to move fast enough to compete, your intrapreneurs will need access to an internal budget that they have some degree of autonomy over. (Nothing kills a company faster than a 6-month procurement process.)
So you need to ask yourself: Are you able to provide startups with the funding they need to grow?
– – – –
Offering startups an unfair advantage – whether that is an in-depth look at your most frustrating business problems, access to innovative infrastructure, access to underutilized assets, services or tools, or funding –can make all the difference for their success.
Before launching your accelerator, consider what you can and should offer to set your accelerator apart and give the participating startups a leg up.
Because when they win, you win.