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Accelerators or Incubators – or combinations?

Flexible and adaptive development, challenge and support are what is required for hi-growth young businesses.

 IT is revolutionizing or disrupting many sectors of the economy and providing opportunities for endless innovations. And as it does so, first-mover advantage has been an important asset, and speed of development has become an increasingly vital element. While Incubators provide valuable spaces and an umbrella for SMEs, Accelerators (12-week managed programmes of intensive development for a small number of early-stage businesses, all working beside one another, and with fulsome support) aim to provide injections of development.

 Incubators provide flexible accommodation and basic services for SMEs, while Accelerators aim to provide 18 months of development for dynamic young businesses in the 3 months or so of their programmes; and they differ in two main respects: pressure and support.

While Incubators have no time limits on their occupants, Accelerators calibrate their progress and provide at the end of the period an opportunity to present their case to investors – for further funding. And while Incubators are reactive – they may have access to a range of advisers, available on request, Accelerators are proactive – they work with their young businesses to help them identify the advice or support they need, and then find it for them.

The reality is that different things are important at different moments and for different stages of growth. Most valuable is to have access (and not just the one-shot injection that the Business Growth Service provides to its adherents) to people with a depth of experience in the long-term growth of young businesses – a changing quorum of experts in a non-executive role. The big new co-working spaces like the 3,000-seater new WeWork building in Moorgate London (or for that matter the new Crick Institute at Kings Cross, and even the Harwell Campus), would benefit from having a number of such experts on tap, and ready to take up that role.

They can also mediate access to specialist mentors and advisers, and they are also in a position to bring together from time to time those businesses with similar growth issues and in similar sectors – to learn from each other’s progress and experience (like the Belgian Plato programme, http://wp.me/p3beJt-H) and like Wayra Lab – the Telefonica Accelerator http://wp.me/p3beJt-s). And they can run sessions of intensive assessment (like those run by the Sussex Innovation Centre) and short periods of intensive development (like Hackathons http://wp.me/p3beJt-aU).

The other crucial difference between Accelerators and Incubators is that you pay for the former in equity, and for the latter in rent.

For an analysis of the several roles that supporters play, see “Managing Creative Groups – how leaders develop creative potential in their teams”, Chapter 9, How leaders provide support. John Whatmore, Kogan Page, 1999.

 John Whatmore

December 2015

Stories from the front line

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Stories from the front line: what Startups value most in Accelerators
What they get out of ‘Office Hours’, group lunches, others on the programme, their first meeting with mentors, mentor slots and other events.

Short periods of intensive development for a small number of carefully selected teams are turning ideas into marketable propositions: ‘Accelerators’ bring these teams together to work alongside one another, and they provide structured support and a wealth of mentors. I asked some Startups what was their magic.

“The weekly session with the Accelerator staff [known as ‘Office hours’], who always asked you:
What have you achieved in the last week?
What are you planning to do next?
What is stopping you?
What have you learned?
This forced you for example to think about what were the bottlenecks; and sometimes they would offer answers, and sometimes not.

“Monday’s group lunches were valuable – where each team had five minutes in which to give an update about their project; followed by a speaker – often an entrepreneur who talked about his or her own experience in developing their project.

“Talking to other people on the programme – people who were working beside me, or who were working with a similar technology but a different system (there was one who was one or two years ahead of me in terms of stage of development), or who were working in the same field and with interesting technologies.

“Mentor meetings were extremely valuable. At the initial speed-dating meeting, the mentors were in groups of two, three or four, and each team had five to ten minutes to present their project – to each group of mentors, and then got responses, advice or contacts from each mentor – exhausting but great!

“On offer were two or three slots with mentors most weeks. They gave us advice, contacts and evaluation. One told us how to approach one potential user, who to talk to, what to say and how to say what we had to tell them. Another introduced me to someone who in turn introduced me to the business development manager in a potential user organisation.

[There is now a different approach: a weekly meeting of staff considers the current mentoring needs of teams, and potential matches from the mentor bank, all or most of whose members are known to someone in the staff team.
Mentors are now divided into those whose contribution can be expected to relate to a single problem and those who are longer-term contributors; and those whose main experience is in investment join the teams for ‘Office hours’ only in the final third of the programme.]

“Every Tuesday a different ‘mentor’ would give a talk about their special interest: design, social impact, investment, marketing, pricing etc – the most valuable of these for me was marketing.

The comments are from meetings I had with participants in a Bethnal Green Ventures Accelerator programme in 2013. I would very much like to hear others’ experience about what they got out of Accelerators (mailto:john.whatmore@btinternet.com).

See also at ‘Applied Creativity’ http://johnwhatmore.com:

I interview the ‘best mentor’ in Startupbootcamp’s FinTech Accelerator
In and out frequently, he steadily evolved his role by offering the wealth and breadth of experience of a life-time’s work in a top bank – clarifying progress and problems, acting as a sounding board, offering experienced insights, and marshalling help. http://wp.me/p3beJt-9P Dec 2014

I am a fly on the wall at an Accelerator’s Mentor Day
The day provided the programme’s entrepreneurs a free-form opportunity to meet mentors and for them to learn something about each other. It suggested to me five different mentor roles. http://wp.me/p3beJt-8N Sept 2014

Three pieces of Pixie Dust: Bethnal Green Ventures ‘accelerates’ six new social enterprises
Pervasive mentoring, proximity (to one another – getting people to interact on their own terms) and pressure to deliver – but all created by a leader with empathy, experience and contacts – with top people who have ‘done it before’ http://wp.me/p3beJt-2i Sept 2012

Good Incubation: the craft of supporting early-stage [social] ventures
Models, methods and types of venture, together with some views about the future.
www.nesta.org.uk/publications/good-incubation April 2014

Accelerator, TV Show and Science Lab all in one!

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Accelerator, TV Show and Science Lab all in one!
(And that’s a lot more than Dragons’ Den)
Stars of Science selects and then brings together a dozen entrepreneurs with exciting scientific ideas; puts them through a development programme whose milestones are filmed each week for a TV Show (as are regular snippets); with candidates being eliminated until the winner and three others share $600k in the final programme.
Stars of Science has raised interest in science and scientists through a unique mix of science and entertainment that keeps millions of viewers tuned.
To date, over 28,000 online applications have been received; and some 500 experts in various fields of science and technology, design and business have mentored and judged the contestants – among them academics from prestigious higher education institutions – as they moved through a series of competitive challenges along the stages of product development.
“Starts of Science searches for…the most promising innovators and connects them with world-class experts in order to bring their ideas to life”; and so far they have filed 62 patents. “The programme is stimulating a passion for science and technology among …youth and is contributing to educational attainment and economic development…”
“The success of the Show (now in its sixth season) comes from the novel way it merges science and fun” said the winner of Season 2. “No other programme incubates scientific projects like that. It has created a new awareness of science.”
Backed by Qatar Foundation, Stars of Science broadcasts on the MBC 4 channel and has ever-increasing audiences across the Middle East.

International New York Times, 5 November, 2014

A ‘pop-up’ Accelerator alongside the latest co-working space

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With the growth in the number of Accelerators it is becoming easier to put together short-term teams to curate ‘pop–up’ Accelerators, especially when they are co-located with existing startups.
Incubators and Science Parks with their colonies of early-stage ventures are ideal locations for Accelerators, which can also generate candidates for their hosts. Accelerators entail the bringing together of groups of ventures with similar issues, and the bringing together of teams of facilitators and supporters to deliver the process – a bit like putting together the cast for your new film: you can never be sure that people will indeed be available when you come to want them! Startupbootcamp’s FinTech Accelerator at the Rainmaking Loft in the City, now half way through its 12-week programme, has done just that.
What started as a one-man role (in John Bradford’s case at Ignite, it was him and a superb assistant), has now morphed (for example at Startupbootcamp’s FinTech) into a whole ‘pop-up’ team. Their roles include supervisory facilitation, communication/marketing, mentor management, event management, learning management, legals and documentation, and of course leaders with reputations and with connections in the fields concerned. While there is indeed a close-knit startup community at least in London, putting together such teams is a different matter in more remote locations, such as Nottingham, Newcastle or Swansea.
Jon Bradford’s success was built on his many connections, whose passion about or interest in startups enabled him to draw willingly on their help. Other Accelerators have relied on a small number of faithful people who have made their particular contributions. And mentors who have ‘done it before’ have been significant supporters. While the best of these are often irregular contributors because they are busily occupied on their own enterprises, alumni are often outstanding contributors. At all events, the role of mentor management is becoming critical issue.
Startupbootcamp has relied on networking and its many local connections, both in recruiting startups and in putting together its management team – recruiting students and graduates where there is a strong interest in startups and early-stage ventures, and using what is now a good market for temporary placements and interns (with a number of job board websites like http://workinstartups.com/). Moreover it has the benefit of many connections with experienced mentors; it aspires to Angels-in-residence; and it has access to a host of entrepreneurs-in-residence, located as it is in a small part of the Rainmaking Loft in London, a new co-working space for some 45 new ventures.

See also: Startupbootcamp – a leader in nurturing young businesses http://wp.me/p3beJt-8C

John Whatmore
September 2014

An Accelerator’s Mentor Day

I am a fly on the wall at an Accelerator’s Mentor Day
Experiments like these – in mentoring – might be as productive as any in the support of innovators in action.
Lucky as I was to be welcomed to Fintech’s Meet-the-mentors day last week, I listened to the ten teams pitching to some of their potential mentors and I could also be a fly on the wall at their subsequent small group and one-to-one meetings.
Startupbootcamp had previously held a Mentor Day (mentors numbers were in a ratio of slightly under ten to a team), to invite them to consider their availability and depth of involvement, and with the help of startup mentor-matching app eRipple, to write alongside their photos about their experience, motivations and expertise (hopefuly searchable by key workds), with the aim of developing capability in matching. (The research project hopes later to include aspects of personality.)
All of these teams were established SMEs with existing products that could be relevant to London’s banking industry, for which the 12-week Fintech Accelerator programme was grooming them. Several of them are dealing with customers whose risk profile or with markets which are currently outside the banks’ normal range of business. They were looking to adapt their products to the needs of this market.
Many of these teams came from overseas and hence were seeking introductions to elements of the UK market. In their pitches, some of the teams made no mention of their mentoring needs, some mentioned them in outline; and one or two – in extensive detail.
One team found the small group meeting too diverse to enable them to focus in enough depth on aspects of their mentoring needs. Another found itself with repeated small group meetings in which it could elaborate on its business. At each group meeting, potential mentors and teams could make appointments to meet later on a one-to-one basis.
The received wisdom is that the best among mentors are those who have ‘done it before’, either launched a new business or mentored one (or more) – or both; and everyone recognises the importance of ‘getting on well together’.
I eventually divided the mentors I met into five types.
Specific contributors. Among these were specialist experts, technical ‘challengers’, sector merketers, and ‘introducers’ ie to individuals in intermediaries or among potential customers or users.
Coaches. Providers of help in identifying and focusing on the best objectives and lines of attack from one moment to the next as the venture moves forward.
Advice givers. Providers of their opinion about what they heard. Most effective when well-grounded and undogmatic, but difficult if in conflict with the opinions of others (eg grounded on different experiences, contexts or values.)
Supervisors/facilitators. In close and frequent contact, asking regularly about progress and plans, obstacles and learnings; often with fat adddress books from their extensive experience, and willing to make instant introductions.
General contributors, including people who were groping their way to how they might be able to help, among them people who were running or had run other Accelerators.
I saw one participant being offered advice (I think to the effect that he should do more extensive tests of customer reactions) by a didactic and rather imposing mentor. As he left him, he passed me muttering ‘f…… c…’! The mentor later button-holed me to tell me, in triumph, that this guy had returned to make another appointment with him. I hope to discover who then said what to whom!
Serendity at its most evanescent!

John Whatmore
Sept 2014

Supporting early-stage ventures

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Do Alcoholics Anonymous and the Samaritans have something to tell us – about support for early-stage ventures?
Early-stage ventures have fast-evolving needs for support – in the form of advice, knowledge, expertise, information and contacts – help often found in fellow travellers (as in Alcoholics Anonymous), but also and more widely in mentors. But their help, highly valuable as it is, is difficult to manage if just the right help is to be successfully brought to bear at just the right moment. Various approaches to their management are used but none have been as assiduous as, for example, those of the Samaritans. A new programme, just launching, is experimenting with a higher level of prior briefing, co-ordination, and review.

If learning the right questions and finding good answers are key aspects of new ventures, the mere availability of almost limitless information that is the case to-day is not enough.
Participants in innovation communities often cite the (incidental) help of others with whom they are located, who may be a bit further forward with their project than they are, and can speak from their experience; as they also cite people with all sorts of knowledge, expertise and experience, especially those who have ‘done it before’. Managing comings-together is an important role, and the kitchen is an important location for them. Level39 in Canary Wharf, London sounds the Cookie Bell every day at 3pm, upon which everyone has to come out of their office and say hello to someone they have never met before!
YCombinator’s approach is regular dinners – at which all participants have to talk about their progress. Watershed Bristol requires its participants to meet for lunch on Fridays and report similarly about their progress etc; and their comments are edited and later circulated to everyone on the intranet.
The Alcoholics Anonymous programme has some similarities: in essence it consists in the provision of a sponsor, a more experienced person on the road to recovery, and meetings that ensure regular contact with those who are in similar circumstances, at which an open discussion of your success (or failure) is required – together with a re-commitment to your objectives, and a discussion about how those objectives can be achieved both now and to-morrow.
While entrepreneurs don’t know what they don’t know (nor often what they need to know), mentors play crucial roles, not least in forging links, including with those who do know. Although mentoring is accepted as a collection of different things, the adoption of mentoring varies widely. Mentoring is widely used in life-changing organisations like The Prince’s Trust and the Probation Service; and a Government report claims that the survival rate for new businesses is five times greater when they have the support of mentors.
However some hatcheries do not offer mentors, and many have few mentors; yet virtually all Accelerator programmes provide mentors, some of them in quantity. (The Bethnal Green Ventures Accelerator did not offer mentoring in its earliest programme, but has always done so since.) One new Accelerator programme is doing without mentors – on the grounds that they give conflicting advice. A University-based public mentoring programme has bemoaned the fact that its mentees all too often fail to renew their first contact with a mentor. Participants in the early stages of programmes often find their contact with mentors quite bruising. And the ethos of mentoring is rooted in the one-to-one form of relationship – where other forms might also have their moments.
But even with the greatest care, mentors are not easy to select, nor to match up; they seem sometimes not to understand how best to help, and their contributions can be unco-ordinated. And, unpaid as they are, their help is difficult to organise and to manage effectively. Moreover the particular help that is needed is not always available.
Mentors are usually identified and invited to participate by leaders; and the relationship is usually launched with some form of speed-dating with mentors; following which both participants and mentors identify those whom they would like to meet again.
Arrangements are also made for participants to make appointments with those mentors who will be visiting at certain times; and they can also make arrangements with the same mentors for subsequent meetings. Telefonica’s Wayra Lab encourages teams to establish informal boards.
The Samaritans (surely the ultimate mentors) are highly selective about those whom they recruit, have a substantial induction programme for them, provide mentors during their initial period, pro-active supervisors for each shift, regular refreshers, and social events. And they provide careful supervision of mentors for longer term clients.
Startupbootcamp’s Fintech. just launching, an Accelerator for SMEs, has taken pains to ensure that the mentors know one another and that they understand their roles – running a Mentor Fest, a full Mentor Day and regular Monday meetings for mentors.

(1) See ‘What do participants in Accelerators value most?’ http://wp.me/p3beJt-7H
(2) See also the Belgian Plato programme for SMEs (http://wp.me/p3beJt-H)

John Whatmore
July 2014
The Centre for Leadership in Creativity
http://johnwhatmore.com

Extra funds for London Accelerators

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Professionalising the playgrounds; and thickening up the pot of post-Accelerator funding

For participants in sixteen London Accelerators, funding has been promised to pay for mentors and others supporters; and for co-investing in new businesses exiting these Accelerators. But this omits other possibilities.

Accelerators use ‘mentors’ for a variety of roles – from acting as supervisors, as contributors of their specialist knowledge or expertise, as advisers – about strategy, business model, proposals and plans, and as door-openers – especially to potential partners, customers and funders. And the art, and it is very much an art, lies in enabling them to make their contribution at the right moment – when the participants recognise the need and/or when the ‘mentor’ does so. There are also those who lecture, teach or coach, or just tell their own War Stories. Seedcamp boasts a thousand mentors; Springboard a hundred and fifty; and Bethnal Green Ventures some sixty.

So far, those who manage Accelerators have called on their friends and contacts, on those who support the world of entrepreneurship, and increasingly on their alumni to act as their ‘mentors’; and the latter have all responded to these calls. In Silicon Valley the network of such people is enormous and very responsive: everyone seems to know everyone and word is passed round quickly and effectively; but here in London, they are fewer and in less close contact with one another. EU funds have now been promised (via the GLA, Enterprise Capital and London Business Angels) to sixteen London Accelerators to pay for these people.

By comparison the folk of Silicon Valley are pleased and happy to pass the word around simply because they are interested in innovative businesses – a community for whom the fascination of working with and talking to and about start-ups is sufficient.

These funds will no doubt generate a host of ‘consultants’ big and small, who will offer their services because there is money to be made out of this burgeoning scene. But they will not be the first choice of aspiring entrepreneurs because the best supporters will be those who are not in it for the money; and the entrepreneurs will recognise this. Second rate Accelerators will attract second rate ‘mentors’; and it must be doubtful if this will promote the start-up scene to its best advantage.

Less controversially, the EU is also the source of funds promised for co-investing under arrangements with those who are putting money into new businesses that are exiting Accelerators (many of them angels and quite small funds – the most successful of which will have worked with the Accelerator over a period in getting to know their targets). This is designed to increase the size of such funding packages, which will lengthen the runway for these businesses and give them a better chance to establish themselves. Yet at this point, many are left without the support that they have enjoyed and with which they would very much like to be able to continue.

It is disappointing that funds have not found there way to spreading the Accelerator concept into new fields such as for high growth SMEs, for commercialising Intellectual Property, and for supporting innovation in local industries and in public services.