Accelerators form an integral part of many entrepreneurs’ journeys. By definition, an accelerator is a fixed-term program that usually lasts anything from three to 12 months. These programs offer a series of benefits, including education, mentoring, and networking. Some may offer investment to startups and on occasion, accelerators will take equity in the companies they accelerate.
With more than 7,000 of these programs spread out across the globe, entrepreneurs truly are spoilt for choice. But faced with this insane amount of possibilities, how are you supposed to choose the right one? It’s easy, focus on yourself. Hear what other startups have gained, how they’ve made the most of accelerators, and then choose the right program based on your current needs.
There are plenty of success stories that prove the extent to which accelerator programs can benefit a business. For example, the sharing economy giant Airbnb is arguably one of the most high-profile companies to have gone through a startup accelerator.
If you’re now at the stage of your business journey when you’re thinking about possibly joining an accelerator, it’s important to research the market and find a program that suits your business needs — just because a program has had success stories doesn’t automatically mean it’s the right fit for you.
No entrepreneur should enter into an accelerator program lightly; you need to really think about what will be expected of you as a participant and be clear on what you will personally get out of the program.
You also need to — given the current circumstances and business upheaval brought about by COVID-19 — consider whether it’s worth entering into a commitment of this magnitude during a global pandemic.
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Before digging in
Now, it doesn’t take a genius to figure out that the best way to know what startups need and could get from accelerators is to speak to actual founders whose startups have gone through an accelerator. Luckily for me, TNW is a founding partner of the DMS accelerator program, and this meant I had easy access to a host of alumni who were able to share their experiences and insights.
Before we move on to this, though, it’s probably a good idea to share some context about the program and to help you get a better understanding of the journeys of the startups I spoke to.
Basically, Data Market Services is an equity-free program that aims to overcome growth obstacles facing startups operating within a fragmented European data market — helping founders with pain-points such as privacy law, intellectual property, and investment opportunities. It’s also worth pointing out that it’s funded by the European Commission.
As part of the program, 50 startups receive free entrepreneurial training, acceleration, and mentoring for six months. Before the pandemic, 60% of the program took place online, with the remaining 40% spent attending startup events across Europe. Now it’s 100% online, meaning founders receive mentoring and the opportunity to promote their business and network with potential partners from the comfort of their own homes.
Then finally, the top 10 startups are invited to an exclusive DMS Bootcamp composed of workshops and mentoring sessions. All of this is recorded and businesses will walk away with a promotional video — which can be a cost-effective way to bolster marketing efforts.
But now let’s move on to the good stuff.
Signing on the dotted line: What you need to know
All in all, DMS seems to have struck a good balance for its cohort companies but founders still need to consider why they want to join the specific program before applying.
The thing to note here is that much of what you had to think about as a founder in the pre-COVID-19 era still applies:
- Take time to ask yourself why you want to join a specific program. For example, are you just after brand-building opportunities or do you merely see it as an opportunity to show off in the industry? If it’s the latter, you should probably reconsider.
- Don’t make the mistake of underestimating the commitment required from you and your team and once you’re clear on this make sure it fits around your other responsibilities. No one likes a distracted founder — and especially during times of uncertainty.
- If the program you’re interested in offers funding, it’s likely that the accelerator will like to see some type of return. Figure out who the investors are, what kind of portfolio they have, and why they’re interested in backing a business like yours.
- Last, but by no means least, make sure you and the organizers are on the same page when it comes to success metrics. There’s absolutely no point in working together if you’re not working towards a common goal or objective. Your company is your baby so don’t jeopardize your growth.
First up, the classics: Networking and learning
Jörg Schädlich, co-founder of Memoresa, a Berlin-based platform seeking to make it easier for people to manage their digital estate, went into the DMS program with a clear objective in mind.
He says his company joined to make new contacts with investors, companies, partners, and other startups.
“We also wanted the possibility of having so many experts in the program to learn new skills in the coaching sessions and to get new input and ideas to help us achieve our goals,” he adds.
Things paid off for Memoresa. “Thanks to the helpful coaching sessions we got the chance to learn more about specific subject areas like fundraising, marketing strategies, or getting input about our business models,” noted Schädlich.
I’d say Schädlich and Memoresa is the classic approach, enter a program to get new connections to help you with challenges outside your strengths. But just having a goal isn’t enough, it also matters how you approach reaching it.
Whatever you do, don’t half-ass it
Mark Ferencvari, a co-founder of Inventori Solutions, a Hungary-based blockchain-powered smart logistics and supply chain platform, says the activities proved useful for his company.
In his case, the program helped him get a better understanding of his business operations and to make smarter strategic decisions with his team.
Good mentorship can spell the difference between success and failure. Being able to leverage the expertise of experts on the program proved incredibly valuable for Ferencvari.
“The more a founder interacts with the mentors, the more they can get out of this program,” said Ferencvari. Ultimately, it’s entirely down to you, the founder, to make the most out of the opportunity at hand.
Basically, you reap what you sow. It’s not enough just to show up, make sure you push for the results you’d like to see.
Stage what now?
Early-stage businesses often grapple with the same issues: finding product-market fit, getting access to paying customers, and finding investors willing to take a chance on a product with little, or no, traction.
The challenges founders face during the early days are vastly different from those seen by entrepreneurs seeking to raise a Series B or scoping potential expansion markets.
Mindful of this, Antonio Irusta, co-founder of SDX Network, a Madrid-based startup that leverages blockchain technology to analyze third-party data, joined the DMS accelerator because he wanted to get a vision of the different stages and actions required to scale a startup effectively.
The mentorship he received during the program was priceless: “Having access to experts for one-on-one advice on how to achieve your business goals and execute in specific domains was essential in helping us grow.”
So sit down and think about where your company is at and what are the most important challenges for you to solve now and what help do you need from the accelerator at this point.
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For many, staying in business has been the main priority and while it may seem far-fetched to join an accelerator during such uncertain times, some would argue otherwise.
Gonçalo Ribeiro, co-founder and CEO of YData, a Lisbon-based startup helping AI adopters improve and generate their data, believes the decision to join an accelerator during COVID-19 should take into consideration where the business is at. In a way, it seems the same pre-pandemic selection criteria still apply.
“It depends a lot on the accelerator,” he notes, adding “the founders should be aware of their company stage and what they are looking for in an accelerator.”
For example, continues the founder, many accelerators focus heavily on business development, which might be suffering as a result of the pandemic. With this in mind, it’s important that founders refine their approach in order to choose the best program that meets their business needs at this particular moment in time.
Going online… a waste of time?
Like Ribeiro mentioned, you need to be aware if this is the right time for your startup to join an accelerator — and how it’s affected by the pandemic.
While going down the route of a traditional offline accelerator may provide more face-to-face interaction with stakeholders, there are also benefits to joining an online alternative.
Dr. Martin Dinov, the CEO and co-founder of Maaind, a London-based AI and neurotechnology startup seeking to improve mental wellbeing and cognitive performance, is quick to refute the idea that online programs are ineffective.
“Online accelerators work too. The trick, more so than physical in-person programs, is to actively make an effort to reach out to the organizers and fellow attendees,” adds Dr. Dinov.
It’s important to try and recreate the offline experience in a way that seems natural and organic.
Indeed, having some initial reservations about joining an online program is understandable but Javad Hatami — the CEO and co-founder of Builtrix, a Lisbon-based startup that helps companies understand and reduce energy consumption by analyzing their energy data — said it shouldn’t be a deterrent: “I believe the virtual format has enormous benefits for founders to learn at their own pace.”
Additionally, Hatami says that the program helped him understand the challenges that come with building and scaling a data-based startup and how to avoid these critical mistakes.
On another note, and something that will surely prove helpful in the future, he says the accelerator helped him fine-tune his investor pitching skills.
So if you’re in an online program, don’t be afraid to initiate follow-ups and be proactive about getting more out of the mentors you come in contact with. Don’t think about whether anything might come across as awkward or too pushy — everybody has entered into this to help each other improve, so get the most out of it.
Time to take stock and act
To say that 2020 has been a challenging year for businesses across the globe would be a massive understatement and while the future remains uncertain there’s no denying that data will remain king across every industry.
With this in mind, there’s never been a better time to take stock of your current business situation — and who knows — you might realize this is the perfect time for you and your company to join an accelerator to move forward.