This is part four from a series of insights drawn from 50 in-depth interviews taken over the past two years and 126 responses to a survey we sent out recently. To better understand our process and the methodology behind these findings, make sure to read Disciplined Accelerator: Introduction.

Before sharing the findings, I’d like to clarify the classification system that we use when it comes to startup programs. The market uses acceleration, incubation, and other terms in a very inconsistent way (it seems everyone has a different understanding of what the terms mean).

We aim to establish a consistent naming system based on semantic consideration first (incubation means to bring something to hatching, while acceleration means to increase the speed of an already moving object).

  • Pre-incubation: Applies to founders/teams with an intention to start a business or a rough idea. The process consists mostly in education and primary market research (customer discovery). The end goal is to get to a complete & researched business plan, canvas or pitch deck.
  • Incubation: Applies to teams with an initial business understanding (not just an idea). The process involves education, customer discovery, mentoring and solution development. The end goal is to launch an MVBP (a minimum viable business product — that helps prove business assumptions, not product usage assumptions).
  • Acceleration: Applies to teams with an MVP or even initial customers. The process should include minimal education, and be a more customized approach to help teams to get from initial revenue to predictable/recurring revenue. From our experience, education in this stage is defocusing founders from having clear goals.
  • Growth: Applies to teams with recurring revenue and modest growth. The process should be focused on sales, marketing, mentoring and support, the end goal being increasing growth and retention metrics.

Some programs may include more phases, but in our experience, building a successful business takes at least 3 months per each stage (especially considering that in the pre-incubation phase many founders have other commitments or jobs preventing them from being available 100% of their time).

Findings

  • Each accelerator has different requirements when selecting candidates and startups are at different stages of maturity when they enter the program. Applying the same curricula to all of them is not efficient but seems to be the ‘default’ approach because ‘everyone is doing it’.
  • Founders lack interest and don’t pay attention if they participate in a workshop that does not fit their current needs. They come to see this part of the program not as an opportunity to learn and grow, but as a tiny box they need to mark done in their quest for funding.
  • The topics approached are not often relevant to both the stage the startup is in, and the people participating in the workshop, their experience and specific needs in each journey. The less homogenous a program cohort is, the more difficult is for the curricula to be helpful and relevant to the teams. Earlier stages (pre-incubation programs) can fit a curricula easier than later stage (acceleration or growth programs).
  • Some workshops defocus teams from focusing on the end goal, as they jump to the opportunity of applying in practice what they learn, despite not being strategic.

Thoughts

  • Pre-incubation programs should have 50-75% educational content (the rest being dedicated to research). Mentoring is not very useful at this stage (unless mentors are the educators).
  • Incubation programs should not have more than 50% education, to allow time for experimenting, testing assumptions and ‘getting out of the building’. Too much education will distract teams from connecting with customers. True useful knowledge in such programs is found in customer conversations, not workshops.
  • Acceleration should not be an educational program ending with a Demo Day, but a process aimed at helping build successful businesses by offering the right support. Build your acceleration process to help you reach your end goals, considering the available resources. In any case, education should come in the form of mentoring and customized support to help each startup on their journey.
  • Consider creating a library with curated educational resources (and experts at hand) that will be accessible to your teams and be a reference point in case of need.
  • Don’t forget to educate your mentors. Some of them have different views on building businesses (especially those who work in larger corporations), which can result in conflicting or hard-to-implement advice in a startup. At least an introduction to Lean Startup, Business Model Canvas, and Disciplined Entrepreneurship is recommended.