If you read this blog you know that I helped found Creative Startups, a startup accelerator designed for creatives. I don’t have loads of experience launching accelerators, heck I don’t even know very much about them compared to, say, David Cohen, or Dave McClure. So, the reflections I’m sharing here are based on relatively little experience. But, to be fair to myself, I do make it a habit–and a profession–to observe and assess entrepreneurs and their experiences. So, for what it worth, here’s my thinking on why some accelerators fail while others succeed:
Accelerators are not all alike. Thus, they should not be measured all alike. Failure to measure the “right” outcomes = failure.
What do I mean? Let’s dissect two examples. In Mexico the startup culture is nascent. Women and indigenous people are largely excluded from the entrepreneurial ecosystem while college educated men have a better chance of succeeding as founders. If you believe that Mexico harbors less entrepreneurial talent or market opportunities then you can likely assume that startups will fail to create financial returns for investors. So, an accelerator would also fail – if that is your primary measure of success for an accelerator in Mexico.
However, if you believe, as I do, that all communities harbor entrepreneurial talent – undeveloped and overlooked though it may be – then the outcome (i.e. profit) an accelerator in Mexico might better pursue is that of drawing forth and supporting a greater diversity of entrepreneurial talent in order to galvanize more startup and business activity across industries and value chains. In this case, an accelerator in Mexico would measure diversity of participants, engagement of mentors and investors, startup activity, network linkages, cluster development, or any other variables that measure/gauge the blossoming of the entrepreneur ecosystem in that community.
By way of contrast, Boulder, Colorado, home of TechStars and myriad angel investors and startups, should measure financial returns for investors — as well as the above variables if they seek a more inclusive economy for their community. TechStars is a fantastic mentor-based accelerator program *and* a vehicle for populating the investment pipeline of startups investors at a relatively low cost. Which can be very beneficial for both investors and entrepreneurs it turns out. And, appropriately, TechStars measures returns to investors above all other variables.
However, many (most!) communities are not steeped in a resource rich entrepreneurial ecosystem – so why measure outcomes as though they were? Why measure financial returns if those are currently out of reach? Founders of accelerators should work to understand the startup ecosystem and resources available and missing in their community and map a strategy for addressing gaps – for getting to that point where measuring financial returns for investors is not only reasonable but also an accurate assessment of the success of the program.
Over time, as the ecosystem evolves and changes, as more resources and market opportunities become available, the variables and measurement tools used to gauge success should evolve, too.
So, what variables would you use in your community? And, how will you know if your community’s startup ecosystem is evolving?
