Staying Relevant — What you need to know about accelerators

Published on
November 3, 2022
Ian Bell
Chief Innovation Officer, Partner
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When the seed accelerator model was launched in 2005, the startup and venture capital scenes experienced a global boom.

Thanks to these accelerators, all at once, revolutionary ideas became tangible at a faster rate. In effect, life was made a lot easier for users and creators. Investors were generating massive revenues and experiencing exponential growth.

The crucial role accelerators played in improving business outcomes has become more apparent as they spilled over to the broader start-up and scale-up communities. Entrepreneurs were becoming better at creating and refining new products and solutions, developing sustainable practices and structures, and procuring mentors and funding.

Today, there are hundreds of successful accelerators in Australia alone, which created a massive shift in the way Aussie founders are thinking about and doing business.

Know Where You Stand

The measurable impact that accelerators demonstrate in helping enterprises thrive is undeniable. However, it can still vary widely among programs. Not all accelerators are created equal and certainly not all of them will be the right fit.

There are two types of accelerators: those designed for start-ups and those designed for scale-ups. Determining which one is right for your company hinges on which category you fall under.

In this last instalment to our “Staying Relevant” series, we discuss the two types of accelerator programs that founders need to know about to better position themselves for long-term growth and sustainable success.

1) Start-Up Accelerators

Start-up accelerators are usually fixed-term, cohort-based, and mentorship-driven programs that lead up to a “demo day”. This is designed to create opportunities for early-stage, growth-driven companies to connect with corporate entities that pursue the same goals.

This type of accelerator provides intense, rapid, and immersive education that compresses years’ worth of learning-by-doing into just a few months. The aim is to accelerate young innovative companies into maturity. It also focuses on two stages: the product stage and the investment stage. The product stage aims to build traction while the investment stage seeks to achieve growth.

Think of the product stage as a platform that helps non-tech founders circumvent their biggest challenges as they catapult their fresh ideas into the market. This stage is helpful in identifying their target demographic and create the right product for their needs.

This entails numerous hours spent on doing customer research, coming up with and testing feasible theories, creating minimum viable products, and looping cycles to maximise learning in the shortest time frame possible.

The end-game is creating solid traction through a product–solution fit. This traction is measured by the number of early adopters who are willing to shell out cash for the start-up’s products or services. Once product–solution fit is achieved, the start-up is on its way to product–market fit. In other words, the start-up can now start earning profits from a wider user market.

Once a substantial paying market is established, the investment stage commences. As demand and revenue increase, so does the investment spending.

Research has shown that those that graduated from top start-up accelerator programs saw rapid progress in achieving key milestones, including time to raise venture capital, exit by acquisition, and customer traction generation.

2) Scale-Up Accelerators

Scale-up accelerators comprise companies that already have strong, viable products in the market, a significant number of paying customers, and consistent revenue streams. This bypasses everything mentioned above and goes right into achieving consistent growth, solidifying an enterprise’s place in their industry in the process.

This type of accelerator covers growth metrics and strategies, pitch development solutions, partner networks, and industry mentorship. Ideally, successful programmes: 1) have a holistic view aligned with regional economic development, 2) provide timely intervention in a flexible and temporal way, 3) offer multiple rounds of financing to stimulate firm growth, 4) simultaneously provide both financial support and non-financial support to maximize treatment effects, and 5) focus on peer-to-peer support to ensure networking and learning opportunities, and to enhance business linkages within industry.

With these perks, scale-up founders do not have to navigate this tricky stage alone and are more likely to move faster in the right direction.

Perhaps the biggest benefit that scale-ups get when participating in this type of accelerator program is having access to a network of potential corporate partners.

This allows scale-ups to give their partners front-row seats to revolutionary products, solutions, and processes that they can incorporate into their existing business ecosystems. In turn, this enables them to overhaul unhelpful legacy practices, increase profits and efficiency, create better working relationships with their employees and suppliers, and impress their current customer base or win over new ones.

Scale-up accelerators are where the big players operate and where they are poised to meaningfully improve their odds of success. In our decades of collective experience as a growth consultancy, we have seen scale-up accelerators in action and how they poise businesses for sustainable hypergrowth.

In our Pains of Scaling Up series, we deep-dive into the requirements, milestones, and challenges in detail and share valuable insights into how businesses can best meet, achieve, and circumvent them, respectively. Check them out to learn more.

In conclusion, knowing where your company stands in the general business ecosystem is crucial if you want to learn where and what to focus on to ensure lasting growth and success. Failure to do so will most likely result in wasted time, effort, and resources. Worst of all, this may mean the untimely demise of a company.

Unfortunately, some scale-ups still operate on a “start-up mindset” and are left in the dust by their more self-aware, constantly evolving competitors. If you think this is you, it is time to reevaluate your priorities.

As scale-up specialists, we at BeingIconic have successfully worked with different scale-ups across numerous industries during their most critical stages of growth thanks to our proprietary scale-up accelerator, MagnituderTM. Some of our clients successfully grew their business ten-fold with no signs of stopping any time soon. If you want to achieve the same and drive business growth in orders of magnitude instead of incremental changes, partner with us today.