NEXT as a startup accelerator alternative

Are you thinking about applying to an accelerator and wondering if it is your best option?

I recently had the honor of mentoring at Toronto NEXT organized by Nathan Monk, Chris Eben and Holly Knowlman (check out Holly’s post How to run a startup pre-accelerator). They did an amazing job and gave Toronto’s startups a world-class educational opportunity. One of the teams really impressed me and I expressed an interest in participating in their Angel round. We talked about the value of NEXT and why it was a better fit for them than a startup accelerator.

On my flight home to Beijing I thought about our conversation and my experiences helping accelerator programs worldwide. Although NEXT from UP Global has positioned itself as a “pre-accelerator”, it may serve as an accelerator alternative for some entrepreneurs – perhaps you.

About NEXT – the “pre-accelerator” from UP Global

NEXT is a 5-week startup program based on the Steve Blank’s Lean Launchpad class. I learned Steve’s approach while helping the National Science Foundation & Steve roll out the iCorps program at Stanford. The class emphasizes face-to-face meetings with customers to validate business model assumptions. I was so impressed with his approach that I organized NEXT Beijing in early 2013.

Accelerators fill a critical need – but they are not for everyone

I work with a number of world-class accelerators such Chinaccelerator and JFDI – I wish they existed when I started my career. I teach workshops through accelerators and meet investment opportunities like Collabspot. They fill a critical innovation role in communities worldwide and I’m glad so many dedicated people run them.

Like anything new and worthwhile … there is unfortunately a lot of hype. Accelerators are not the best options for many entrepreneurs.

Accelerators fund founder living expenses – NEXT is a paid program

Accelerator funding – usually around $10K-$15K USD – can be necessary for young teams in markets with few seed funding options. If covering founder living expenses is important then NEXT may not be an option.

Alternatively, entrepreneurs in developed countries might be able to earn $15K picking up an an extra consulting project for a few weeks. For them the NEXT application fees are negligible.

NEXT is shorter with an emphasis on Customer Development

NEXT emphasizes the business model & face-to-face interviews with potential customers to validate assumptions. Obviously there is a lot more to starting a business and the best accelerators help startups with these other challenges. But for experienced founders the extra support and training an accelerator offers can be a distraction.

If the founders can execute (without killing each other), market risk becomes the dominant business risk. For teams in this situation NEXT is a great option.

NEXT is part-time – most accelerators are full-time

Getting into an accelerator is competitive and teams apply to programs worldwide.  The opportunity to participate full-time can help get founders to put aside other work commitments for a few months to focus exclusively on building the business.

But for founders with families, moving to Shanghai for 3 months to join the next Chinaccelerator class may not be a viable option.  NEXT is mostly self-directed with weekly group meetings. If you can’t quit the day job and drop off the kids with the in-laws, NEXT might be for you.

Accelerators help entrepreneurs build a broader network

It takes a lot of relationships to build a company, and accelerators can help founders expand their network. New relationships are often the best value an entrepreneur gets from an accelerator.

If you already have the experience and personal connections to build your own network then a program like NEXT might be fine for you.

Accelerator and entrepreneur interests can diverge – this is unlikely in NEXT

Do you have an accelerator in your community? Take every opportunity to thank the people managing it. Running an accelerator is stressful, tough work. As far as I know there isn’t an accelerator (besides Y-combinator from high-profile exits) that operates at a profit. The people running them work tirelessly to build awareness and keep them funded.

Unfortunately building accelerator awareness means showcasing the accelerator’s companies – and preparing for events like “demo day” can be distracting for founders who need to be spending their time building or selling. These type of distractions are less likely in short-term, part-time educational program like NEXT.

Ultimately … all programs are as good as the people running them

I had a chance to meet fellow mentor and Angel investor Sean Power at NEXT Toronto. Sean has a ton of experience and gives great advice. You’ll get value from any startup program where you get time with guys like Sean.

Entrepreneurship is a people business – before applying to any startup program first learn about the people involved. Any program that gets you involved with world-class people will help you succeed.

8 Comments

  1. Hugh Mason May 12, 2014 at 1:37 am #

    Thanks for this wisdom and your continued support for JFDI, Kevin. I’ve lost track of how many of your teams you’ve inspired!

    I totally agree that accelerators are not right for every startup. Some people are incredibly strong-willed and prefer to teach themselves rather than learn from coaches, for example, and I respect that. Others are working in mature ecosystems like Silicon Valley where it’s just so easy to just walk into a cafe and find like-minded people and grassroots organizations who can guide you to success that a formal program doesn’t feel essential.

    On the other hand most people we meet are working in relative isolation and for them, trying to apply lean alone or part-time is like trying to learn salsa from a book. You can do it but it’s tough. And, just like learning to dance, if part of your purpose is to do it so that you can find partners to dance with, you won’t achieve that unless you commit to a community.

    Running JFDI with 40 startups now has been a fascinating experience. When Meng and I set it up I think we believed that an accelerator program was like a car-wash for entrepreneurs: a machine where you put them in one end and they come out shiny and sparkling and investment-ready. Now I’d say that’s sort of true, but we have come to see that an accelerator program itself is a bit like the turkey on a thanksgiving table. Thanksgiving wouldn’t be complete without a turkey, but the turkey is not thanksgiving. Thanksgiving goes on around the turkey – human connections make it what it is.

    Same with an accelerator. It’s the community around the program that matters. The story of why Quora joined Y-Combinator illustrates this perfectly – check out founder Adam D’Angelo here: http://www.quora.com/Quora-company/Why-did-Quora-join-the-2014-Y-Combinator-batch

    “There are a bunch of reasons why it’s valuable for Quora to be a YC company:
    We’ll have Sam and all the other partners to help us.
    We get to be part of the YC community / alumni network of founders.
    We get access to all the resources of YC.”

    IMHO there is a huge shakeout of accelerators coming. Right now we are at the peak of the hype cycle and most of them will die in the next 6-12 months because most fail to add a lot of value. But the ones that deliver a vibrant community will always be popular, for the same reason that MOOCs are not going to kill the best in traditional campus-based university education.

    It’s not just about what you learn or the piece of paper you get. For many of us, being part of an accelerator is all about the human connections we make through an 110% intense, life-changing, collegiate experience where we discover and co-create value working with people who bring complementary bits of the jigsaw puzzle to the table. That’s what gets me out of bed every morning and why I love what we do 🙂

    • kevindewalt May 12, 2014 at 5:58 am #

      Thanks Hugh! You guys are a world class organization and I’m glad to play a small part in helping.

      If I gave anyone the impression that “teach themselves” is a viable option to an accelerator, I apologize – I know I need help from lots of people in my own community. But most entrepreneurs I talk to think of accelerators as the first and best option for them – and for many it is. But there are other options for people to get the help, coaching and support they need. NEXT is emerging as one of those options.

      Honestly … I read the link and comments and still don’t understand why a $900M company like Quora needs to be in an accelerator. The Quora management can’t get the same resources and help on their own?

      Certainly General Motors’s management could learn from Sam and get value from the resources of YC. Should GM apply to the 2015 YC class?

  2. Sean Power May 12, 2014 at 6:29 am #

    Great write-up, Kevin! Thanks for the kind words. It’s mentors like you that get the companies really inspired. It’s easy to sit back and thoughtfully critique, but the startups are the superstars and heroes in this story. They took mentor feedback to heart and really showed massive improvements, week over week.

    I believe that pre-accelerators are a compelling alternative to accelerators, depending on how well networked, and well experienced a team might be. I would even consider joining a program like NEXT myself, to iterate on ideas I might be passionate about.

    From a mentor perspective, it was well worth the time for me. I found it extremely insightful to see the different approaches to feedback that each mentor brought to the weekly sessions. It has helped be me be a more effective advisor to the companies I’m involved with.

    • kevindewalt May 12, 2014 at 6:08 pm #

      Thanks Sean! Sorry I missed you for coffee on my way to the airport … next time!

      • Sean Power May 12, 2014 at 8:52 pm #

        That’s my bad. Let me know next time you’re in Canada and I’ll try and make the stars align. Looking forward to our next drink / tea together.

  3. Andrew Boos May 12, 2014 at 1:32 pm #

    Hey Kevin, great meeting you during our stint at Chinaccelerator in 2012. Small world – Nathan Monk and the MarsDD folk are great friends of us here at adConnect/Appfuel. I’m intrigued by the Next concept, thanks for putting it on the radar.

    • kevindewalt May 12, 2014 at 6:08 pm #

      Excellent!

  4. jon July 4, 2016 at 12:19 am #

    Hi Kevin,

    The article totally nailed what I am going through at the moment.

    I’ve been part of a team that got seeded during an accelerator program but have to be out of the team due to the fact that I can only be on part time, which was understood.
    For someone who is in their 30s and having family commitments, its hard to take the YOLO path and just go all in. (especially when i’m living in singapore)

    I’m on another startup at the moment which is running on beta. Self funded and boot strapped. The hardest part here is that i do not get valuable feedback and not mentioning the network of accelerators that could make things alot easier.

    So my question is: Do you think I could still apply to accelerators and take $0 while giving them equity?
    Thank you and appreciate your time for reading this.

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