by Hussam Ayyad, Chief Accelerator Officer, Highline Beta
Having established in my previous posts why corporate accelerators matter and why many fail, I may have put the cart a bit before the horse. Many programs call themselves accelerators while actually being something else, and while these other institutions and programs provide excellent resources, founders looking to be part of an accelerator should know what they’re looking for. To sneak that horse back where it belongs, let’s describe what an accelerator is, and what is needed to run one — at least as far as I’m concerned, and how we see things at Highline Beta.
Without cracking open a dictionary, let’s establish a simple definition. An accelerator is a professionally organized enterprise development program with well-defined objectives, that runs within a specified period of time, to help promising ventures progress faster –from one point to another– than they could on their own, through leveraging the resources available through that program (the accelerator).
Take for example YCombinator (YC). Even before it was called an accelerator, YC’s purpose was very clear: to create as many unicorns as possible by helping promising startups develop into successful and disruptive businesses, faster than they could on their own, through connecting them to a unique network of resources and knowledge. Even though their goal was broad — create successful businesses — it was nonetheless clearly defined in the way their program was (and continues to be) consistently executed, and has served YC very well with success stories like AirBnB, Stripe, Dropbox, and more. In YC as an accelerator, the consistent overarching theme that founders get coached and “accelerated” through is ‘business model validation’, to get closer to product market fit.
As an additional example, Techstars –an accelerator I had the pleasure to mentor in over the years– is highly focused on founder-development, and coaching founders through business model development/validation, but most consistently, it helps founders learn how to raise early stage venture capital. Similar to YC, it is run as a clearly defined program with the goal of helping founders move faster than they would if they were to do it on their own, especially when raising their seed round of capital.
And when it comes to corporate accelerators, the general intention of such programs is to similarly run within a specific period of time, with the main purpose of facilitating successful partnership opportunities –in some form– between startups and large corporations to solve problems. Corporates see it as an opportunity to solve problems through tapping into external capabilities, such as those of the startups, and startups see it as a great opportunity to gain credibility, boost revenue and grow effectively as a result of such partnership. We believe that Highline Beta’s Corporate Pilot Accelerators and Evolution Growth Accelerators are uniquely differentiated in that space, but let’s leave this to a different blog post so we can now discuss, more broadly, what actually makes an accelerator.
What is NOT an accelerator
Before jumping into what we believe are some of the essential ingredients to any accelerator, it would probably be helpful to also describe what is not an accelerator:
- Deal-flow-as-service: often, some providers of “connections-to-startups-as-a-service” to corporations call their programs accelerators. While the connections they make may accelerate connecting startups to corporates and vice versa, it does not necessarily provide the structure and a reliable mechanism for startups and corporates to accelerate partnerships systematically and consistently.
- Network-based connectivity programs: Similar to the above, often referred to as community-based accelerators or incubators. Unless such programs follow a systematic approach to providing consistent value to participants through execution-focused programing (led by experts in the field); being a program that facilitates introductions doesn’t guarantee –in any way– consistent value to all founders participating in such programs.
- Co-working spaces: slapping a brand onto the wall of a community space and having some shared or subsidized resources offered to resident founders and entrepreneurs, doesn’t necessarily make the co-working space provider an accelerator. Unfortunately, it is a common false perception that such spaces are accelerators, and that just makes understanding the value of accelerators to founders more difficult and confusing.
- Programs that export one ecosystem’s “mindset” to another: While Silicon Valley remains the world’s leading startup ecosystem by many or most metrics, it is very important to understand that what was built and what evolved in Silicon Valley happened due the confluence of many unique factors within a very specific period of time. That said, programs that claim to bring the “Silicon Valley Mindset” and “Approach” to different regions may bring some useful learnings and key lessons, however they end up becoming a “hammer searching for nails” most of the time. In other words, such programs rarely end up providing any consistent value and learning to accelerate founders in other local ecosystems. The only common thing between startups is that they’re all different, and the same commonality applies to startup ecosystems. Every startup ecosystem can benefit from external learnings, but it will need to be built around its local needs and not follow a “blueprint” that works for other regions in the world and calls itself an accelerator by association. I would further emphasize by saying, in most cases, that approach ends up being a recipe for failure. You may argue that “accelerators” is an “imported” concept to many ecosystems and fails to work globally. If you do, you may have a point, but let’s keep in mind that what needs to be consistent in an accelerator is the value-add to the founders and not the definition, which is a good segue to what makes an accelerator.
What is needed to run one
In our view, any accelerator must contain a combination of different qualities that allows it to provide a minimum bar of consistency of value creation for program participants. While this may sound like a mouthful, the following are examples of such key qualities or pillars that must exist to provide an enterprise development program (accelerator) with the ability to accelerate companies growth:
- Specific Program and Agenda: Having a clear common goal for a cohort of companies is essential to guide a real acceleration journey. For example: Are you running a sales accelerator? Are you running an accelerator that is focused on executing commercial pilots with a corporate partner? Or is your accelerator running a one-size-fits-all generic agenda that claims to help all companies with the same resources with no specific guide? Having a founder walk into an open-ended program with a general agenda and no specific goal is like having an athlete walk into a gym with no specific training plan, and having them wander between weight lifting machines not sure where to start, how to exercise and how to prevent unnecessary injuries. Having a specific program and agenda will give your accelerator a real purpose and clear guide posts that set expectations and make success much more likely and attainable. For example: with Highline Beta’s Pilot Accelerators, our goal is to facilitate the execution of successful startup pilots that solve actual problems for corporate partners and create partnership opportunities for both sides.
- Credibility: Entrepreneurs will only put their trust into an accelerator run by professionals who can extend their reputation to every enterprise they support. Credibility only comes through practical experience and provable results; knowledge is not enough. For example, many university scholars found accelerators, but with no experience leading ventures or building and operating businesses; they’re really just running think-tanks, which are great, but are becoming social and political community platforms and not accelerators. Entrepreneurs are consistently attracted to work with others who exhibit a demonstrable track record in dealing with the same challenges they’re currently going through themselves, or have done so already and have practical and transferable learnings to share.
- Network: Leveraging their credibility, real accelerators can create and facilitate key connections into industries. These connections are invaluable to entrepreneurs seeking to leverage the accelerator’s network to speed their success. In effect, participating in an accelerator should give participants an unfair (or significant) advantage when it comes to connectivity with sources of revenue, funding and business advisory.
- Doers who embrace the founder’s mindset: You can only run an accelerator with people who want to do the work and who function like founders and wear different hats to make things happen. Everyone involved must believe in a founder-centric culture of value creation. People who expect others to do jobs that are “too small” for them are probably not suited for operating an accelerator and are not able to genuinely connect with founders who seek empathy with their day to day struggles. Only those willing to roll up their sleeves and “get their hands dirty” will succeed in running or participating in an accelerator, and without such a team that breathes such values, your accelerator projects remain a communication exercise.
Any team armed with key pillars such as the above and looking toward a clear purpose can find and run a real (and really effective) accelerator. Whether the idea is to build companies that solve major global challenges, or just create value for investors or corporate partners, the potential is there for the accelerator to bring those outcomes closer much faster than otherwise possible.