We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 - 28. Join AI and data leaders for insightful talks and exciting networking opportunities. Register today!
There’s a lot of debate in the tech startup world about the merits of accelerators. In some circles, it’s become a status symbol to be able to say, “We’re a YC company.” In others, accelerators are viewed as shortcuts for rookies.
My take? They have their place but aren’t right for everyone. For the record, I’m now on my fourth new venture and I’ve never been through an accelerator. And if you’re wondering, yes, the first three were successful.
An accelerator makes sense if:
You’re starting your first company and have little or no business experience. An accelerator will help you learn how to do business, generally. Kind of like going to college helps you learn how to organize your time and prioritize, regardless of whether your major is Engineering or Philosophy.
You don’t have credibility in tech or startup circles. You may be an experienced businessperson – maybe you worked in large companies for many years – and still lack street cred in the startup scene. That can be a serious handicap, and an accelerator can help you overcome it.
Your goal is to get your company acqui-hired. By participating in an accelerator, you’ll get publicity and you’re almost guaranteed to get an acqui-hire proposal – if not from another participant, then from an accelerator alum.
You don’t know anyone in the investment community. An accelerator can lead to crucial introductions to investors and gives investors confidence that you at least know the basics.
An accelerator may not make sense if:
You are an experienced entrepreneur, with a great network. In that case, you likely already know the basics, have learned a few lessons, and already have a network. An accelerator may just slow you down.
You have a really huge idea that you don’t want to share with 400 people before your launch. Remember, accelerators like to hedge their bets by investing in multiple startups in a single space. You may be competing with your classmates.
You don’t want to take a cookie-cutter approach to creating and launching your company. By design, most accelerators train entrepreneurs to think their way, in their particular model. And that can limit an entrepreneur’s vision. Some of the best companies are born from mistakes, so entrepreneurs who try things their own way and make mistakes will ultimately build better companies than those who are sheltered.
I’ll leave you with this thought: When the accelerator model first became popular, many in the startup community referred to them as the “new MBA,” deriding business schools as outdated because instructors tended to be removed from the business world and modern ways of doing business. Accelerators have evolved in a similar fashion, with partners and mentors plucked from the startup world but often several years removed from actually running a startup. Does that mean accelerators are getting as out of touch as business schools – factories spitting our carbon-copy entrepreneurs? Share your thoughts below.
Farhan Ahmad is a serial entrepreneur and current founder and CEO of Bento for Business, which provides financial solutions that fit small businesses.
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Learn more about membership.