The new rules for accelerators
At the Accelerator Symposium hosted at GrowConf in Vancouver last week, the managing directors of 45 of the top accelerator programs gathered to talk about the state of the industry. Paul Singh & Mike Edwards convened the group at a time when the number of accelerator programs is exploding and the industry is facing a shakeout as business models and impact are being tested.
There were interesting takeaways for me for Launch Pad and in the broader context of the direction of the early-stage startup community.
Some insights:
The Counterfactual — an assessment of the impact of accelerators is not how the companies that have gone through accelerators have done, but rather how they would have done on their own, without going through an accelerator. Impossible to test, but important to consider to prevent accelerators from becoming beasts that exist just to feed themselves rather than focus on providing value to their customers, the founders.
Business Model — 3 years ago, most accelerators launched with some variation of the YC & TechStars model, 20k for 7%. This has evolved as accelerator search for sustainable business models. Fund-supported models work for the top-tier programs, and there are other models that programs are pursuing. Most accelerators seem to fall into one of the following: 1) fund model, 2) non-profit 3) state supported economic development 4) services model and 5) corporate model. In our case, I believe the Launch Pad coworking & events are the services that generate revenue and support our mission with the accelerator.
Vertical & Regional — smart accelerators are focused on building an unfair advantage by connecting startups to the natural resources that exist in their region. For example, Tech Wildcatters only works with b2b companies that will benefit from connections to Fortune 500 customers in Dallas. 1776 in Washington DC connects startups that need lobbying services to influence government to build advantages.
Demo Day fatigue- one of the most lively discussions was with the glut of accelerators the fatigue that investors are feeling around demo days. There is a need to re calibrate what a demo day is for (hint: a coming out party for founders to the community) and perhaps there is room for a rollup of demo days that presents the best of the best from across the country
Customer Acceleration — the most interesting programs to me were accelerating the customer acquisition process for founders. I believe there is a lot of room for accelerators that can connect startups directly to corporate customers or accelerate distribution strategies. There is a clear value proposition here.
As we continue to evolve with Launch Pad and Voodoo Ventures, here are some things you can expect from us:
continued focus on sectors that make sense for NOLA
expansion of our accelerator services model: workspace, product, customer acquisition — all services we can add value to companies
syndicating our investments through Voodoo Ventures to our angel network
a deep not wide approach to spending more time with highest potential companies
increased collaboration with Idea Village, New Orleans Startup Fund, Propeller and other regional accelerators to present the top companies to our network