Accelerators are helping start-up companies take flight
In 2005, the start-up world saw a new term being included in its list of ever-increasing jargon— Accelerator. A start-up accelerator is essentially an intensive business program which helps a start-up to network, be mentored and meet potential investors and grow their business rapidly or ‘accelerate’ it to a certain point. All over this period, the founders get to fine-tune their idea, culminating in a pitch event or demo day where the start-up gets to pitch its business in front of potential investors.
Says Manish Kumar, CEO and cofounder of GREX, an alternative investment platform that allows private individuals to invest in start-ups: “An accelerator accelerates your business growth to a certain point. It helps to make your product or service better when it comes to market acceptability, pricing and product fit. Normally a start-up would seek a meeting with several experts for this. At an accelerator, the resources come to you instead and your learning happens in a crunched time.” An entrepreneur’s journey is lonely and there is no surefire refresher course. You look for a support system where you learn from the best practices of scaling and peer group learning. “Every entrepreneur needs a mentor who can guide you, ask difficult questions and prod you sometimes,” says Prateek N Kumar, founder and MD of NeoNiche, a marketing company and a part of start-up accelerator ASCENT, founded by Harsh Mariwala, chairman and MD, Marico Group.
Each accelerator has a specific focus area and all of them may not be the right fit. “When choosing an accelerator, look for some kind of fitment with the mentors. See that there is at least a 30-40 per cent fit, otherwise you might end up not making the most of an accelerator program,” says Grex’s Kumar. “Most founders have a view of what they want, based on which they mix research and their own perception to choose an accelerator. Research includes understanding the track record of the accelerator, talking to the accelerator, and assessing the talk-walk gap,” says Ravi Kiran, co-founder, VentureNursery, an angel-backed start-up accelerator. “Start-ups should look at the focus area of the accelerators, and whether they can get the required mentorship,” says Naman Vijay, Pyck, a tech-driven last mile logistics service provider and a part of TLabs, one of India’s leading accelerator programs.
Since accelerators zero down on a handful of start-ups from the hundreds that apply, the selection process is a tough one. Atal Malviya, founder, Spark10, a European accelerator which recently launched in India, talks about what a start-up looks for before selecting it. It looks at the founding team, its credibility and whether they have complimentary skill sets, problem they are trying to solve, the market size, and if the solution they are offering is faster, better or cheaper.
Venture Nursery, for example, has a five-stage selection process that involves assessment by external reviewers, their own members and domain experts, a video interview using Talview, one of their own alumni, and then an in-person meeting with their selection council. This means only three start-ups out of the hundreds are selected.
TinySurpise, a curated marketplace for gifting and home-baked goods, got selected to the GSF Global Accelerator, a product-oriented start-up in 2013. “Out of several applicants, GSF picks like a dozen or two of them and interviews each team to place their bets. I feel the first round is much difficult than the final round where you need to be quirky and creative,” says Vijay Srinivas, founder. Arun Jagannathan, CEO, CrackVerbal, who was a part of the Startup Leadership accelerator programme in 2012, feels that a lot of homework has to be done by the entrepreneurs before applying.
Make the most of your time
Accelerator programs are for a fixed duration and a lot of sessions and activities are packed within that time. It is important to network as much as possible and discuss ideas with experts and get their feedback. “The first thing is that I was very at-tentive throughout the sessions. I was very regular and diligent,” says Jagannathan. Subrat Kar, co-founder of Vidooly, a video analytics company that was a part of the TLabs accelerator programme in 2014, says that he and his team had endless meetings with mentors and experts. They refined their proof of concept, spruced up their product and prepared a detailed business plan along with the growth forecast.
For CrackVerbal, networking happened with not only speakers but also with peers. “When you network with other peers, you also get to learn a lot. It is a great opportunity for networking because everyone from that group is there for a common objective, and you have a pool of knowledge,” says Jagannathan. Agrees Kar, “We got the opportunity to work alongside other exciting startups, share ideas with them and learn from each other’s mistakes.” For Pyck, TLab helped to put them in touch with the investors.
Getting mentored is the next big takeaway from an accelerator program. For CrackVerbal, it meant meeting a lot of accomplished people who spoke at the event; for example, the CEO of Print-O, the CEO of Common Floor, and the Chief Product Officer of Red Bus. “They gave advice on what to do and how to do things. None of them were very prescriptive in sharing advice— a lot of it was about exchanging ideas. That kind of mentoring/advice is unbeatable,” says Jagannathan.
Get connected to investors
A good accelerator would put you in touch with potential investors. “We had the opportunity to meet with the who’s who lists in the world of venture capital. To actually be interacting with them was a huge opportunity,” says Jagannathan. The accelerator program at TLabs introduced Vidooly to potential investors.
Venture Nursery’s Kiran feels that participating start-ups should sign up only if it is open to being moulded and the founders have learning agility. “Founders who feel they know everything and all they need is money, benefit the least,” he says.
The accelerator programme may last only a few months, but what is important is that you keep the connections alive and not lose out on the valuable lessons. “Remember that this is not an investment you are making for short-term but an investment from which you reap rich dividends,” says Jagannathan. Srinivas advises that start-ups should focus from day one focus on the demo and find a mentor who is going to stay for long. “Do not miss out on the yoga sessions and make a lot of friends,” he adds.