Have startup accelerators reached their use-by date? Why it’s time to cancel demo day
Do we still need startup accelerators? Were they for a point in time that has now passed?
I have been designing and running accelerator programs since 2010 and believe they have been a significant contribution to the innovation system we have today.
Ten years ago, few people aspired to start a company, and there was little funding and capability-building support. Most universities have their accelerators, and tens of accelerators operate outside of universities.
But do we still need them? Who are they for? What problem do they solve?
Here are some arguments for not needing them anymore.
#1: The skill uplift has happened
Accelerator programs have spread a reasonably consistent playbook for starting a company. Ten years ago, most people struggled with how to create and build momentum. Today, people roll out their lean canvas, speak to customers and build an MVP. Game on.
If help is needed, the internet is bursting with free resources, and support networks are easy to join in online communities or co-working centres.
#2: ‘Innovation Theatre’ has poisoned the well
Demo days are shiny. Considerable work is applied to polishing the pitch so that demo days feel increasingly like theatrical performances.
It makes the event great but very hard to see inside the packaging to assess the companies. For investors, it is hard to parse the diamonds from the turds in gold-plated boxes.
Not many investments happen on demo days anymore.
#3: Playbook cliches need a refresh
The same tools and content spread from accelerator to accelerator with a different logo on top. This material was generally created by founders who learned by building companies. The signal is lost as ‘Chinese whispers’ pass on the original message.
So, do we need accelerators?
Yes, we do. But they need to level up. Accelerators 1.0 did the job of quickly building our collective entrepreneurial muscle and building networks.
We’re not done. This is the ‘infinite game’. We COULD end it, but I say we change the rules to extend it and go further.
So here are 7 ideas for accelerators, including cancelling demo day
What do startup accelerators need to accelerate?
We’ve become jaded by some of the cut and paste programs, and I wanted to flush that out in the first half of this essay, Do we still need startup accelerators? The generated threads included valuable insights that I encourage you to read on Twitter and LinkedIn.
What does an accelerator today need to deliver?
Here’s what I have heard and what I think we need to build from my experiences.
What is the intention of an accelerator?
Let’s be clear on what founders need to get done.
- #1 – The focus needs to be on company building and not demo day readiness. Cancel demo day. That frees up a lot of time and refocuses the teams back on building their companies and themselves.
- #2 – Show proof. As much as possible. Blow people away with the ‘proof per week’ ratio. As investors, customers and partners work with the company, show proof that this company can do it.
- #3 – Peter Thiel said, “A startup broken at foundation can’t be fixed.” The opposite is also true. A company that starts well grows well. So how do we ‘start well’?
- #4 – Lay down the runway. Deliver a momentum that continues with funding when the program has ended.
What kind of people need to be involved?
- #5 – Lead the journey with a founder that has empathy for the job that the teams need to do. Someone confident to drop curriculum to go down a needed pathway right now. Someone with a point of view.
- #6 – But don’t forget the teacher. Founders can be inconsistent, and pairing them with a teacher can strengthen the insights and cadence of the program. Like great restaurants need a mad creative chef AND a general manager, I think accelerators need this pairing.
- #7 – No tourists, only citizens. There needs to be motivation for authentic mentorship beyond ‘giving back’ or ‘learning about startups’. We need real customers, investors, and founders from relevant companies telling their stories and giving their feedback.
In summary, bring in the right people, have a design to vest them in the process over time and do what is needed to build real companies.
Next, I will share some thoughts on design ideas. Watch this space!
- This post first appeared on Phil Morle’s daily blog, where he writes about what he is learning in deep tech venture building. Read more here. Follow him on Twitter at @philmorle
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