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Last week I attended two “demo days” at two different startup incubators, and in the next few days I plan to write on what I saw at LaunchBox Digital in DC and TechStars in Boulder.
But before I dig in, a little background is in order – there was an excellent series of posts written over at the Early Stage Investment Blog on this topic. The en vogue name for these entities is now “business accelerators”, not incubators. The idea behind them is to give entrepreneurs a little bit of money, space and utilities, and exposure to a wide range of professionals as mentors to help them grow their ideas and their startups.
I sit on the advisory board of one of this new crop of accelerators, AlphaLab in Pittsburgh. I have seen it develop over the course of the last two years – the quantity, and more importantly ,the quality of the applications we are seeing every six months is on the rise, and I do think AlphaLab is doing an important job of fostering startup creation, and perhaps more so the overall mindset in Pittsburgh that we can be a town where new ideas and new businesses grow.
We have a debate going in our firm as to whether or not accelerators are a necessary or even a good thing – some of our partners live by the motto that, “Great entrepreneurs find a way to get it done,” and their reflex is to dismiss the need for such “startup daycare”. I subscribe to the notion that these accelerators are an important part of the overall entrepreneurial ecosystem. Certainly not every startup needs the support and infrastructure that these organizations provide, but there seem to be a number that do benefit from these services. Digging back into my bag of physics analogies, I think of the role that temperature and pressure play in coaxing two hydrogen nuclei to fuse and give off a burst of energy – and I think accelerators offer a little temperature and pressure to the situation. But everything like this is by degrees, so I am sure there is a spectrum of right and wrong along this debate.
If you have a point of view, I would love to hear it. It takes a long time to see the fruits of these labors inside the accelerators, so it will be a long time before we see whether data and facts back up the perceived benefits that I see.
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Comments (4)
Hmmm, incubators are now accelerators, eh?
Guess we’ll have to find a new name for the medical device accelerator we’re about to launch in Pittsburgh, because it is NOT an incubator, nor anything like AlphaLab.
Companies come in at various points in their development cycle and we ‘accelerate’ their movement to the next level, through resources, funding and connections. The companies leave either because they failed, or because they’ve succeeded and now need their own space to continue their growth.
When I heard about AlphaLab I thought it would be the absolute best way for me to quickly gain a functional understanding of the entrepreneurial marketplace, especially here in Pittsburgh. My focus in college was on software engineering to the exclusion of a lot of other very interesting topics such as business classes (my english minor was forced on me under duress, but I’m glad for it). So I find myself woefully behind the curve on understanding the game and its rules; which is not a situation I’m used to finding myself. But this has forced me to learn from various sources and unintentionally network with some extremely helpful people (blog post forthcoming)!
So now that I’ve found other sources to learn from rapidly, do I still think that I’d get the same amount of benefit from AlphaLab? Yes. A 20 week power networking, learning and creating session can only be helpful. To turn the physics analogy into a chemistry one, AlphaLab will provide the same end result, but it will require lower activation energy and proceed along a smoother chemical pathway.
Thanks, fellas – Gary, I like your “continuum of acceleration” theory – very nice.
Mike – I think you are right on point. Many people don’t have the background and/or experience to be a first-time success – let’s face it, there is tons to learn, and I have heard that from plenty of awesome, successful entrepreneurs – THERE IS ALOT TO LEARN, AND YOU HAVE TO MAKE MANY, MANY MISTAKES AND LEARN FROM THEM. Here in Pittsburgh I think it is important that we make AlphaLab a TOUGH, CHALLENGING experience – that is the only we way will inspire startups to be their best. I, for one, plan to be direct in my feedback with this class of companies; I hope it has effect.
By the way, being a chemist, I like your analogy – and would have gone there, but I couldn’t resist the accelerator/physics play. Don’t forget about the role of enzymes to reduce the activation energy barrier – this is really what a BA is like…
Alan, you beat me to the enzyme analogy…, but I guess the real question is what are the primary deficiencies of first-time startup founders that we have to solve?
It seems like AlphaLab has a mix of two types of companies:
- The ones that spin out of research labs that have some IP & very talented technical personal.
- The ones that came out of a business idea to solve.
It seems like both have some similar problems such as getting cash so the team can work full-time as well as general mentoring – is this the activation energy? Should someone name an accelerator: “Active Site”?
However, the former seem to have found a mousetrap and are looking for mice and the latter know where the mice are but need help with mousetrap.
The former seem to require more overall strategy & business mentoring to find a real market and to find out what the market actually wants.
The latter seem to require more fine grain business help on more of the execution side and also the ability to pull the software off.
It would seem that the accelerator’s money, connections, mentorship, etc. provide a lot of the needed benefits, but I also think that accountability is a big benefit. It’s easy to get distracted when working on a startup, but when you’ve got weekly progress meetings it pushes you even more – I know I love that about AlphaLab.