As part of my role at SoftLayer, I have the opportunity and privilege to mentor numerous entrepreneurs and startup teams when they partner with us through our Catalyst program. One question I hear often is, “Should I join an accelerator?” My answer: “That all depends.” Let’s look at the five lessons entrepreneurs should learn before they decide to join a startup accelerator or incubator program.
Lesson 1: The founders must be committed to the success of their venture.
Joining an accelerator or incubator comes with some strings attached — startups give up between 6 to 10 percent of their equity in exchange for some cash and structured program that usually lasts around three months. Obviously, this kind of commitment should not be taken lightly.
Too often, startups join accelerator programs before they are ready or mature enough as a team. Sometimes, a company’s idea isn’t fully baked, so they end up spending as much time “creating” their business as they do “accelerating” it. As a result, that company isn’t able to leverage an accelerator’s resources efficiently throughout the entire program … The founders need to establish a vision for the business, begin laying the groundwork for the company’s products and services, and be 100% committed to the accelerator program before joining. If you can’t say with confidence that your startup meets all three of those requirements, don’t do it. Take care of those three points and proceed to the next lesson.
Lesson 2: Be prepared to leverage what you are given.
Many startups join accelerator and incubator programs with unrealistic expectations. Participation in these programs — even the most exclusive and well-known ones — by no means guarantees that you’ll raise additional money or have a successful exit. These programs provide startups with office space, free cloud services, and access to mentors, investors, recruiters and media … Those outstanding services provide participating startups with a distinct competitive advantage, but they don’t serve up success on a silver platter. If you aren’t ready work tirelessly to leverage the benefits of a startup program, don’t bother.
Lesson 3: Take advice and criticism well; mentors are trying to help.
“Mentorship” is very tough to qualify, and criticism is difficult to take … Especially if you’re 100% committed to your business and you don’t want to be told that you’ve done something wrong. Mentors in these startup programs have “been there and done that,” and they wouldn’t be in a mentorship position if they weren’t looking out for your best interest and the ultimate success of your company.
Look programs that take mentorship seriously and can provide a broad range of expertise from strategy to marketing and business development to software architecture to building and scaling IT infrastructure. Then be intentional about listening to the people around you.
Lesson 4: Do your research and make an informed decision.
With the proliferation of startups globally, we’re also seeing an evolution in the accelerator ecosystem. There are a number accelerators being positioned to help support founders with ideas on a global, regional and local basis, but it’s important to evaluate a program’s vision with its execution of that vision. Not all startup programs are created equal, and some might not offer the right set of resources and opportunities for your team. When you’re giving up equity in your company, you should have complete confidence that the accelerator or incubator you join will deliver on its side of the deal.
Lesson 5: Leverage the network and community you will meet.
When you’ve done your homework, applied and been accepted to the perfect startup program, meet everyone you can and learn from them. One of the most tangible benefits of joining an accelerator is the way you can fast track a business idea while boosting network contacts. Much in the way someone chooses a prestigious college or joins a fraternity, some of the most valuable resources you’ll come across in these programs are the people you meet. In this way, accelerators and incubators are becoming a proxy for undergrad and graduate school … The appeal for promising entrepreneurs is simple: Why wait to make a dent in the universe? Today, more people are going to college and fewer are landing well-paying jobs after graduation, so some of the world’s best and brightest are turning to these communities and foregoing the more structured “higher education” process.
Even if your startup is plugging along smoothly, a startup accelerator or incubator program might be worth a look. Venture capitalists often trust programs like TechStars and 500 Startups to filter or vet early stage companies. If your business has the stamp of approval from one of these organizations, it’s decidedly less risky than a business idea pitched by a random entrepreneur.
If you understand each of these lessons and you take advantage of the resources and opportunities provided by startup accelerators and incubators, the sky is the limit for your business. Now get to work.