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The corporate sector is averse to market disruption, a key startup goal. Photo: Stockphoto

Accelerator expectations need to be slowed

OPINION: Startup accelerators hope to beat the odds on the pathway to success, but the numbers suggest that even the ‘experts’ can’t pick winners.

There is a rash of corporate accelerators going on at the moment, both in Perth and nationally. It seems every innovation consultant is advising their corporate clients that an accelerator is just the thing to harness the innovation community and get some fresh thinking into the business.

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Comments

This is an interesting conundrum. My hunch is that many startups are getting on with it, and cannot enter an accelerator as the timing and/or terms may not be right for them. I wonder, if accelerators had been around back in 1999 when I started, would I have entered one? If so, would it have helped? Probably. We made so many mistakes, and had so many near death experiences, it would have been good to get some good hard won advice early, if nothing else. My feeling in Perth though is that the better startups do enter these programs, and quite a high percentage of them go on with it, and are doing deals or gaining traction - GeoMoby, Formalytics, Offpeak Games.. but it can take 5 years, and the first accelerator did not set up here til mid 2014. Early days yet.

Tap into Safety, Perth
We are currently involved in the KPMG Energise accelerator and it's the first for us since Curtin Ignition in 2013. We are finding the program useful as a chance to firstly take a day a week to work on the business rather than in it. The program has structure, you're right Marcus, and some of it is going over old ground for us, but it's not a bad thing to practice and revise again. One thing being involved in the accelerator is the publicity and recognition that the business is worth taking a look at. For us this has helped encourage sales and investment. Success is timing and a good deal of luck! but mostly the ability to be tenacious and never, never give up!

Sporting clubs have coaches for a reason - they help lift the game of the team. The same goes for accelerators. Experienced advisors and mentors add genuine value to start-ups, and their guidance helps avoid hidden pitfalls that could kill a new venture.

Perth
I share your concerns regards the proliferation of corporate accelerator programs across the country and that expectations in the short term are pegged to high. However from my own experience the success rate of accelerator programs is significantly higher then the background population. For the Vocus Upstart accelerator program 2015 cohort, four of the eight startups ie 50% are achieving success by raising capital, winning customers and gaining traction. As Charlie states it is still early days and it will take many years before we can determine the true success rate. Based on overseas experience it takes 20 years to build a successful startup ecosystem and we have been building ours for 5. In the short term we do need realistic expectations plus founders, mentors, investors and a government who are prepared take a long term view if we are to achieve success.

Perth
I think it's not as simple as generalising the word "accelerator" as being applicable to every iteration or structure for acceleration that currently exists within the ecosystem. Each accelerator differs across a multitude of variables; 1) Funding mechanisms 2) Syllabus 3)Advisory 4)Networks 5)Values and investment methodology and most important 6) Stage of companies. Each permutation of variables will render a quite different outcome for the future of WA's economy.

Perth
I don't understand the purpose of this article. Are you saying accelerators should not exist? How can "startup school" (e.g. lean, legal/accounting support), funding, mentorship, access to incredible networks, a workspace, exposure and a range of other difficult-to-obtain resources possibly be a bad thing? Can you please propose an alternative model to support early-stage startup companies and the cultivation of startup communities generally?

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