By Abhi Ramesh, Huntsman Program in International Studies and Business, Class of 2014
The past decade has seen a rapid expansion of the world of startup accelerators and incubators. TechStars, DreamIt Ventures, AngelPad, Launchpad LA, and, of course, the infamous Y Combinator are but a few of the hundreds of accelerators around the country. For the aspiring entrepreneur, the accelerator landscape can be a tough one to navigate. I’m a Wharton undergrad. I took a year off from school and participated in two different startup accelerators—one on the east coast and one on the west coast—for 3 different companies. Weather put aside, my experiences were quite different. My conclusion was simple. The accelerator experience is not for everyone. Here’s why.
- You can be too early or too late. An accelerator is exactly that—a program meant to significantly accelerate your progress. Think of it as a crash course in “startup.” You come in with a great idea and an amazing team. You use the resources and mentors provided by the program to reach your goals as quickly as possible. You show off your idea at a demo day. You ask for money. You hopefully raise money. And, that’s it. You’re done. Your relationship with the accelerator is over. It was just a fling. The accelerator experience, therefore, caters to startups at a specific stage. If all you have is an idea, think twice before applying to an accelerator. Ideas can change. Yes, you can pivot, but time is of essence in an accelerator. Time not spent building the product, getting users, and making contacts is time wasted. Ironically, the accelerator environment, though meant to be open, can force founders to be closed. You can easily live in your “accelerator bubble” and fail to validate your product in the real world. Between that and giving away a large chunk of your company for a tiny bit of cash, the accelerator experience just might not be for everyone.
- It’s easy to get distracted. Accelerators are, in essence, ecosystems. Legal and marketing help, mentorship, pitch practices, guest speakers, co-working spaces, seed funding, and demo days are all important elements of most startup accelerators; yet, not all entrepreneurs need all of these things. Most will have rigid schedules and guidelines to make sure founders stay on track. More often than not, the young, aspiring entrepreneur benefits from structure and organization. “You will meet twice a week with your mentor, submit progress reports every month, and the demo day is 4 months from now.” For some startup founders, however, the structure of the accelerator just doesn’t work. In fact, it hurts. Between mentor meetings, pitch practices, and social events, it’s easy to get distracted from your fundamental goal—to build a product. You will be bombarded with a plethora of opinions and advice. Many will be contradictory. At the end of the day, you are the founder. It’s up to you to carefully pick and choose the advice you want to follow. Accelerators can make this process much more difficult.
- Not all accelerators are created equal. The top accelerators are at the top because they attract the best companies, investors, and mentors. The best investors, mentors, and companies are attracted to the top accelerators. The cycle repeats itself. The accelerator model, therefore, lends itself to a heavy tail distribution. The top companies come out of only a handful of programs (YC, TechStars, and DreamIt Ventures being the top 3, according to Forbes). As a founder, think very carefully about picking the right accelerator. It’s a game in which brand name matters.
Bio: Abhi Ramesh is a senior in the Huntsman Program focusing on entrepreneurship and statistics. Having previously founded startups in the education, fashion technology, and social commerce spaces, he is currently working on a healthcare technology venture. Originally from Atlanta, Georgia, Abhi enjoys building scalable web apps, going to the gym, and attempting overly ambitious culinary experiments.