One might ask if we really need yet another startup accelerator? Don’t we already have enough? Indeed, these days it seems that in every country and major city there are many startup accelerator programs that are available to aspiring entrepreneurs.
And yet, those programs tend to be generic by nature, purpose and content. Therefore, they don’t address the unique needs of entrepreneurs who focus on some emerging, specialized markets or technology sectors. For example: food tech, cyber security, cleantech, or in our case, assistive technology.
These entrepreneurs and startups face some of the same challenges that any other business entrepreneurs do. And yet, they also have an additional set of challenges specific to their market, technology, or business. For example, entrepreneurs that aim to build social businesses in the assistive technology market require what is called a dual bottom line business model. This is a business model that is designed to create both social impact and financial profits.
A New Type of Startup Accelerator
For the past four years, I’ve taken part in building a first of its kind startup accelerator called A3I. A3I is the first startup accelerator in the world that’s dedicated to entrepreneurs whose aim is to improve the quality of life for people with disabilities. I serve on the accelerator’s steering committee. I also serve as a mentor to the entrepreneurs in the program.
In A3I we believe that access to assistive technologies and products can have a powerful impact on the independence and quality of life of people with disabilities. To achieve that goal, we need to have more solutions based on assistive technology. They also need to be affordable and available to people with disabilities worldwide. Hence, there is a need for more innovation and entrepreneurship in the field of assistive technology. Towards that end, there is a need to attract more entrepreneurs and impact investors to this market.
That’s the purpose of A3I. Our goal is to build impact startups that harness technology to improve quality of life for people with disabilities. We also want to build awareness to this market, its critical needs, and its business opportunities. The best way to do that is through success stories. Success also attracts the best and the brightest entrepreneurs, and good investors.
During the course of the last three years, we had close to 40 startup teams go through our four-month program. We’ve worked with them closely and followed their progress, struggles, failures and successes. We learned a lot about their challenges and needs. We also learned about what worked well in our program, and what was lacking. As a result, I can share with you the following four key lessons that I think will be of value to anyone who is currently running a startup accelerator, or considering to do so.
1. The teams.
There is nothing new about this lesson. And yet, it’s important to emphasize again the importance of the founding team. It’s by far the most critical element in the long-term success of a startup.
Therefore, you should make sure that your selection criteria to who gets accepted to your program is weighted heavily on the quality of the team. This means that there should be at least two founders. Ideally, they should already have an on-going healthy partnership, or relationship between them. One founder, brilliant, passionate, and dedicated will not be enough. Also, they should be highly committed to building a startup. It cannot be their pass time hobby.
2. Learn Best Practices from the Best.
When it comes to structure, format and content, there is no need to reinvent the wheel. There are many successful startup acceleration programs that have developed effective formats, and great content. It’s always wise to learn from others, from their lessons, and to copy what works well.
For example, I subscribe to Steve Blank’s Lean Startup philosophy and principles. Furthermore, his Lean Launchpad curriculum and format has been proven to work in many settings. Therefore, we chose to use it as the basis of our curriculum at A3I.
In addition, we also learned from other startup development programs, that like us, are focused on building impact startups. For example, Tech for Good in Israel, has developed a very unique and effective program that’s fully funded by industry partners. These partners also provide critical business development assistance and mentoring to the startup teams.
3. Increase the likelihood of your startups to get funding.
This is fairly obvious. To attract the best entrepreneurs, startup accelerators need to demonstrate that they can increase their startups chances to raise money. Either by reputation or affiliation. This is a significant challenge when you’re a new accelerator.
There are a few ways to overcome this challenge. First of all, you can focus the accelerator program on a specific market or industry. This can help you establish a network of investors who share the same focus. For example, cyber security, clean tech, etc. Also, having a specific industry or technology focus can help you attract industry partners that can provide funding to your graduate startups. Furthermore, such industry partners can also serve as pilots, and beta sites, or provide other customer development assistance.
4. Crossing the early stage chasm.
This is one of the most important lessons we’ve learned. After graduating our four-month program, our entrepreneurs have a compelling value proposition, a solid business model, and the best tools for building their startups. However, there are still facing a significant obstacle. Crossing the early stage startups chasm, or as some call it: the valley of death.
This is the well known gap between developing your first prototype, or successful proof-of-concept and raising seed investment. To cross this chasm you need some market traction and validation. This makes investors more likely to invest in your early stage venture.
To cross this chasm entrepreneurs require two things: time (and endurance), and dedicated help with their customers and business development. Time often equates to funding. This is a case of “Catch 22”.
Startups are not drones, they can’t take off vertically. They need a long runway. Some longer than others. Almost always longer than four months. This means that entrepreneurship programs such as A3I need to provide their startups with sufficient time to at least complete a successful pilot in their target market. I think that six months are enough, if they also get help with their customer development. This could be provided by a member of the accelerator team, or by an outside partner.
Also, this is very much linked to lesson #3 above. Those same aforementioned industry partners and investors networks could be very helpful in bridging this chasm, and shortening the runways.
In conclusion, building a startup accelerator is much like building a startup. You need to test, learn, and pivot until you reach a product-market fit. Consequently, based on the above lessons, we’ve made several changes towards our next accelerator program. And yet, I’m sure there will be new lessons to learn during the coming year.
At A3I, we measure success by the impact our graduate startups make in the lives of people with disabilities. After all, that’s our purpose, and what really matters.