Are accelerators still the best way to nurture startups?
Tak Lo, previously the Director of Techstars--one of the most renowned accelerator programs in the world--believes accelerators need to change to stay relevant. In a recent post in the London Entrepreneurship Review, he listed three ways in which accelerators should evolve:
1. Establish a presence in emerging markets. Currently a director at R/GA Ventures, Lo argues that the traditional accelerator model--especially its ability to connect founders with mentors who can make key intros--is still the best way to build entrepreneurial ecosystems. But in Silicon Valley, New York City, Boston, and other major markets, there are already plenty of accelerators doing this. So the next step, Lo reasons, is for accelerators to appear in the emerging markets where there's more of a need for them.
2. Specialize in a particular phase of the startup process or founder experience. Lo points out that accelerators like Europe's Entrepreneur First are specializing in recent college grads. Another accelerator called 500 Startups has launched what it calls the Distro Dojo, a specialized program for companies who have already raised seed money and lured an initial batch of customers. "The volume of these different models will only increase," Lo writes. In other words, accelerators should continue to brand themselves by founder demographics and startup stages, rather than acting as all-encompassing entities in which any type of startup is welcome.
3. Form partnerships or alliances with corporations. For many reasons, large companies struggle to innovate like startups or small companies. Enter the accelerator model, which--if channeled by large companies--would allow them to make short, low-risk bets on potential game-changing ideas. Accelerators could also become a rich source of talent for large companies.
I asked Lo how he envisioned corporate accelerators becoming a reality in the next few years. "Through partnerships and developing their own accelerator programs," he says in an email.
But he adds that there's more to developing accelerator programs than simply recruiting personnel who've been around the accelerator scene. "Hiring former accelerator employees (like me) isn't enough," he says. "You still need a broad, diverse mentor network."