Thinking about applying to an accelerator?
By Patrick Riley on January 9th, 2017
This post originally appeared on VentureBurn
If you were starting a business 20 years ago, you’d typically spend most of your time running around town searching for customers, investors, and mentors. In a single day, you might only have time for one meeting with a customer and another with an investor. If you were lucky, you could squeeze in a meeting with a mentor. Carving out time to work on your actual product generally meant sacrificing sleep.
In the mid-2000s, accelerators such as Y Combinator and Techstars changed the startup world. Instead of founders having to go out to visit mentors, investors, and customers, accelerators made it possible for these groups to come directly to startups to offer their support. That remarkable shift was enough to propel the success of companies such as Dropbox, Airbnb, Reddit, and others.
Several hundred successful accelerators now operate throughout the world, and most of them follow a similar model. For about three months, a group of startups (usually 10 at a time) work together in one location. During that time, these startups are surrounded by dozens of mentors and exposed to priceless resources and expert knowledge. Toward the end of the three-month period, customers and investors are invited to meet with the startups to decide whether they want to invest in or work with the companies.
Unfortunately, not all accelerators are created equal. My company works with more than 80 accelerators around the world, and we have seen plenty of good and bad patterns along the way. I’ve seen quite a few stories of tremendous growth after startups find a like-minded accelerator, but that doesn’t mean you should run out and join the first accelerator you stumble across.
Thinking Things Through*
By now, you might think an accelerator is exactly what your startup needs. If you’re looking to help your startup blossom, an accelerator can definitely fuel your growth. But don’t assume an accelerator is your meal ticket to guaranteed success.
This might sound confusing coming from a guy who oversees a network of accelerators, but the truth is that they simply aren’t the best fit for every startup. Before you join one, be sure to conduct a thorough assessment of your business and goals. Here are four steps I would take before joining an accelerator:
1. Understand what you need
When I ask founders, “What do you need the most help with?” they usually say capital and customers. That might be true, but every company needs those two ingredients — even Google and Microsoft rely on capital and customers.
I usually follow up with clarifying questions. Do they need $1 million or $100 million? What kind of customers do they need? Are those customers in the company’s market? I want to help founders recognize blind spots and take an honest look at their company before seeking assistance.
2. Recognize the assets that exist in your local ecosystem.
I visited Auckland, New Zealand, last year and spent time working with startup founders who needed funding. I was taken aback by how few of them had heard about ICE Angels or Lightning Lab, two amazing groups that are fueling the next wave of startups in the country.
You might not even need an accelerator if you’ve already found funding through one of these groups. I’d encourage founders in emerging markets — and really all over the world — to do some research about what’s next door before they go globetrotting to find an accelerator.
3. Don’t be afraid to build what you don’t have.
I’m shocked by how many startups believe they must go “somewhere else” to get customers. When I was at my first startup, I often hopped on a plane instead of talking with customers in my backyard.
Even if you don’t have a solid local audience, you can always build one. One of my good friends, Andy Stoll, invited entrepreneurs and innovators to Iowa City to attend EntreFEST. There wasn’t any sort of conference to bring together the startups, corporations, investors, and educators in and around Iowa, so Andy decided to build one from scratch. It’s now one of the preeminent startup conferences in the U.S.
4. Ask the hard questions.
Once you’ve taken the previous steps, you should ask each accelerator you’re considering whether it has mentors and customers who can help you work through the exact problems you face. If you’re trying to reach certain customers, can they help you find them? Can the accelerator help you source the sort of funding you need? You also shouldn’t be afraid to ask for the names of experts who work with the accelerator. If accelerator officials aren’t able to give you a solid answer or seem overly vague, consider it a red flag that they probably don’t have the tools necessary to help you.
Thankfully, you probably don’t have to go far to find people and resources that can help you build your company. Next time you catch yourself dreaming about — or dreading — flying across the globe in search of resources, take a moment to seek potential investors and customers in your own community. They’d probably love to help you build your dream right where you are.