A somewhat controversial opinion I have is that most (not all) startup accelerators are not helpful and possible actively harmful to startups building hard-tech.
I believe that the continual creation of ambitious hard tech (climate, manufacturing, robotics, transportation, housing, medicine, etc) products and technologies is critical to creating the society we all want to live in. However, the pace of innovation, specifically around hard tech has slowed dramatically. To preserve our society, and the planet around us, we must focus on how to create a system that consistently produces innovative hard tech products and businesses.
A Bad Cycle
A cycle I've seen continuously in hard-tech startups is this:
Founders come up with a good idea
Founders form a company and start working towards their big goals
Founders join a startup accelerator believing that the accelerator will help them develop the plan for their business.
The founders create an unrealistic product development plan either due to inexperience or external pressure from potential investors and likely the staff of the accelerator.
Founders raise money based on the unrealistic plan and get going with an uneasy feeling,
Founders start feeling a lot of investor pressure to capitalize and start to cut scope in their dream and take lots of engineering shortcuts to achieve the timeline
The product starts to fail and/or is never able to achieve product-market fit due to feature cuts or engineering shortcuts
The company fails to raise additional money and didn't plan for enough iteration cycles initially to survive
The company fails and everyone is unhappy.
The accelerator/investors look back at their portfolio and realize they have a high failure rate. Instead of investigating why they decide that this failure rate is the statistical norm for companies and build programs to funnel in more companies and force them to fail faster. This perpetuates the cycle and makes the problem more systemic.
Issues with Existing Programs
Traditional accelerators/incubators have the following issues:
Most programs are funded by investors, corporate sponsors, or external parties that have many other motivations other than solving the actual problems the startups are looking to solve.
Arbitrary timelines - Because of the constraints of the funding sources for accelerators, the timelines of other programs are often arbitrary (3 months is a classic example).
Lack of a high context, consistent coaching - Most programs focuses on the creation of an ecosystem. While this has value, it means that much of the advice given to startup founders is given with extremely low context to the team or current approach. The eco-system usually consists of corporate partners, investors, and mentors that might meet with a company once or twice during the term of the program.
Does this mean other accelerator programs are bad? No, there are some good ones out there, but there are many bad ones as well.
The Root Cause
It seems to me that there is a lack of good financial / business strategy training for extremely early founders to make the highest leverage decisions about their startup. Startup founders are pushed to "move fast, and break things" when instead, to solve the toughest problems they often need to slow down and think critically.
Perhaps this is due to a misalignment of expectations vs reality. Many startup accelerators claim they want to take in very early-stage teams, but in reality, the type of program and programming they offer is only really helpful to later-stage companies that have achieved product-market fit and are ready to scale.
Pre-Accelerators
There doesn't seem to exist a systematic support structure that coaches startup founders to create businesses that will ultimately be successful. Therefore, I believe a new genre of pre-accelerator should be created to coach startup founders through the early critical planning and decisions made at the highest leverage time in the business. There are a few of these programs around, but we need more!
A program like this should be:
Funded by the startups themselves - Programs will almost certainly serve their funders. Therefore our program is funded entirely by the startup founders themselves.
An alternative here is that the accelerator is a not-for-profit entity and is funded via philanthropic donors.
No fixed timelines - Interesting/hard problems have unpredictable timelines; so forcing a result in an arbitrary timeline is counterproductive.
High context coaching experience - Startup founders need a consistent coach to take them through the process. This high context help ensures that founders hear the right information at the right time.
Questions Founders Need Support to Answer Prior to Acceleration
I’ve spent some of my time in the last few years coaching very early-stage startup founders. Those experiences have obviously contributed greatly to my opinions and have taught me that startup founders need help answering questions like this:
Do you understand the problem you are trying to solve? Can you concisely describe it? Can you prove you understand the problem?
What is your future vision of success for this problem?
What is your roadmap and timelines to realize your vision?
What is your near-term tactical plan and how does that tie into your roadmap?
What are the types of experts I need to talk to? How can I gain access to them?
My Advice to Startup Founders
If you’re starting out and considering an accelerator, look critically at the expectations of the program and the support you will receive. Can they really help you answer the questions you need to answer right now? If you are very early stage, will they pressure you to pivot into a direction you don’t believe in or think will be successful?
If not, consider more interesting support structures that might help you answer those questions outside of the normative programs. I’m sure you’ll be happier and more successful that way in the long term.
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