While there may be a market out there for every good idea, executing it can be difficult. Working with a startup accelerator could be the secret ingredient your fledgling business needs to make it over the hump to longevity and success. Before you jump in, peruse this list of a few things every entrepreneur should know:
1. Approach the application process as a two-way match. Accelerators can be competitive and before you apply to work with one, you need to do some very specific homework. Seek out references for the accelerator you’re considering. Speak to former or current entrepreneurs who have participated in this particular program to make sure they have had success and that the accelerator is the right fit for your particular needs.
To boost your chances of being accepted by the program you choose, be sure you have your market clearly identified and that you can articulate the problem you’re solving. It sounds simple enough, but many entrepreneurs aren’t as clear as they need to be about these basics. Or they suffer from the “too many targets” syndrome and haven’t gotten their market, solution and value proposition points tightened up. Does your solution resonate with your target market? Validation of your brainchild comes from getting out there, approaching potential users and listening to their feedback.
Another factor that will carry a lot of weight during your application process is whether you’ve already generated revenue. The fact that people have been willing to pay for your solution is validation in itself. To get started, formulate a list of beta users that you can convert to paying customers within 90 days. Or consider working with a channel partner with access to your market.
Finally, be prepared to justify your approach and be clear about why it’s better than your competitors. Most likely those involved with the accelerator have seen other models with similar goals.
2. Understand the value proposition. If you’re accepted into an accelerator program, what can you realistically expect in return? Most entrepreneurs know that working with an accelerator usually offers invaluable networking connections that will provide insight about how to successfully run a company.
Other reasonable expectations include a possible working stipend of capital. Expect to exchange anywhere from 5 percent to 8 percent in equity for $15,000 to $30,000 in cash, depending on the program. You will also receive assistance in setting up channel agreements or partnerships, an education on how to pitch potential investors and access to quality funding sources if desired.
Then decide whether raising capital is the right step for you. Be wary of accelerators that push you into taking money; it’s not the right model for everyone. There are a lot of expert voices out there, with a lot of expert advice to give. Always remember, the most important voice is yours.
The most crucial part of a program is education and mentorship. Accelerators will provide you with access to experts in your market and a regimen of training. Their process can help you move the needle in the most critical areas. Frequently they assist in lean product development, creating and developing a user experience, branding, sales, marketing, building a company’s valuation and effective team building. Accelerators offer invaluable “been there, done that” advice and the relationships you build often last the duration of your venture.
3. Understand that success starts and ends with you. An accelerator is not your startup’s fairy godmother. The progress of your venture and your experience with an accelerator program starts with you — and you have to think for yourself. Accelerators are there to provide the methods and resources you might be lacking; they are not there to run your business for you. What you put into it determines whether the accelerator fulfills its purpose of guiding you to success.
On one hand, you must be open and receptive; check your ego at the door and allow yourself to fully engage in the process. On the other, you have to own your decisions. Accelerators do provide access to informed opinions and data, but entrepreneurs need to process them wisely.