l’m not a fan of top-10 lists or blog posts like “5 easy ways to become a success“, but a recent article, 10 Lessons Learned In an Incubator – Entrepreneur Stories gets it right – except that the author, most likely, is referring to accelerators and not incubators. There is definitely a difference – notably that incubators are usually the ones that charge rent, while accelerators usually offer some form of funding and are decidedly very short term affairs for startups.
Cherry picking the through the 10 Lessons, here are some of the most unique lessons that of being part of a startup accelerator/program gives entrepreneurs:
How to Identify Your Strengths
By “strengths” I don’t mean a personal inventory of the entrepreneur’s personal strengths and weaknesses. Accelerators, in part because of being very collaborative and participatory, allow the startup to go through a filtering and vetting process where they can discover what the company is really good at doing – not just what they think they are good at doing, or what they want to be good at doing. For instance – a startup may enter an accelerator with solid game design and coding skills, but after several intense encounters with peers, mentors and investors, they evolve to realize their unique strength is not in game development but helping companies make their marketing programs fun for their customers.
Put Your Name Out There…Now!
Did you ever notice that you hear of many great startup ventures on the basis of their entrance into an accelerator program -rather than when they exit? So much buzz is generated based on a great demo, and that they have been accepted to the program – often before they have a product or a customer. It’s dotcom-like in nature. Startups soon learn that having investor and customer interest very early on is an important strategic move. And unlike the negative connotations of the dotcom era, startups of the current age understand that getting your name out there early can help them get their product and markets spot-on before they spend a lot of time and money. And just as important, this initial buzz can keep investors and customers in the loop early and often, making the fundraising and sales process that much easier when the time comes.
Post-Mortem analysis of your failures
Unique to accelerator programs (and many university Entrepreneurship programs) – there is a relatively short cycle of concept-to-product, or to product-to-market validation. It’s usually a matter of a few months or even a few weeks. The implication is that these programs is that startups are doing “intensive experiments” in entrepreneurship. Failure is an option. While this sounds like a phrase that should never be uttered or even considered – it is accurate. The mindset going into one of these programs is “This is going to be intense, and we hope to hit a grand slam. But we’re are taking risks and testing assumptions, and it is an experiment. If we fail, we will have learned a hundred new lessons, and be even more likely to succeed the next time.”
This new mindset is almost always healthy and constructive, but it used to be a painful and expensive lesson. Accelerator programs make the lessons from failure quick, and relatively cheap. Accelerator programs almost always have informal and formal mechanisms for providing entrepreneurs specific feedback on what went wrong (and right) – so they can dive in and do it better next time. The short cycle of most accelerator programs seems to make postmortems easy. And since it’s only a few weeks, entrepreneurs can dive in again with new knowledge (and contacts and skills), without the trauma of a long and drawn out failure.
Lessons for entrepreneurs are everywhere (particularly in the top 10 lists around the web) – and entrepreneurs don’t have to participate in accelerator programs to learn these lessons. While many entrepreneurial lessons are universal for all those diving in for the fist time – accelerators allow entrepreneurs to make new mistakes and learn new lessons that often can’t be found in articles and books. How so? For instance: A new mobile startup embarks on one of those 3 month programs to prototype and test a brand new way of letting customers schedule and pay for haircuts. Very likely, there are no existing rules for success yet. During the intensive 3 month acceleration process, the company may fail – as in ‘fail to launch’, ‘fail to attract customers, or ‘fail to find a business model’ – but after it is over, the entrepreneur can say “we tried to pioneer mobile haircut payments using this approach, and here is what we learned.” For venture investors, one of the top attributes of attractive startups is the unique, in-depth domain experience of the founders. And most founders would agree that the lessons, and new experience, is well worth the pain, since it made them better entrepreneurs.