There seems to be remarkably little research on accelerators, despite the soaring popularity of the model: according to some estimates, there are currently several thousand accelerators in operation in the world. To fill this knowledge gap, a team at Endeavor Insight interviewed staff at 58 accelerators to learn what makes a successful accelerator and what the greatest challenges are in the field today. (Endeavor Insight has written about accelerators and what sets them apart from incubators here and here.)
Here is a sneak peak into Endeavor’s upcoming publication on accelerators and what makes them succeed.
Lesson 1: The supply of accelerators is unmatched by startup demand
When asked about some of the more challenging aspects of operating an accelerator, respondents most commonly mentioned that competition is tough, especially because a rapidly growing supply of accelerators is unmatched by the demand for their services. Interviewees at more remote locations also complained that they have difficulty breeding successful startups and creating wealth in the community because the best businesses flock to well-known locations, attracting good mentors to those areas. Others mentioned the growing competition from public and corporate accelerators, while others pointed to the prospect of equity crowdfunding as a future obstacle.
Lesson 2: Free facilities are unlikely to be key
Many accelerators offer affordable facilities for startups, which can include growth and marketing assistance, legal counseling, or laboratory space. While startups often desperately need these services, only 5 percent of the interviewees mentioned they were a key component of a successful accelerator.
Lesson 3: Success breeds success: great mentors can make great accelerators
Quality guidance seems to have great added value for accelerators: mentorship was mentioned as key for operating a successful accelerator by a staggering 46.5 percent of respondents. On the one hand, this may be thanks to experienced mentors, who can help startups succeed; on the other, having renowned experts on board can help accelerators stand out among their competitors, and maintain selectivity towards their applicants.
A Virtuous Cycle of Quality Mentoring and Successful Business Acceleration
These findings suggest that there may exist a virtuous cycle that drives success for accelerators. As part of this cyclical process, quality candidates appeal to quality mentors, generating more success among companies, which, in turn, attracts more qualified candidates and experts. Apart from the presence of mentors, their level of engagement and matching them with the right candidates also seems to matter a great deal.
The research behind these findings will be published soon on the new Endeavor website.
Contributed by Lili Torok.