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.