From domestic academic institutions running incubators to international funds with vested interest in the Indian market, starting an accelerator seems like a good ‘catchment’ strategy to attract and work closely with innovative startups; and the large enterprise companies wanting a piece of the action in the innovation space would give an arm and a leg for starting an accelerator.
It is not as easy as it looks like from the outside, neither are startups, or at least the worthy ones who are queuing up to join another corporate accelerator.
In my previous stint at Google, I’ve had the opportunity to manage an international accelerator program – the experience was great, and so was the steep learning curve that came along with it like a cashback offer!
Here I’ve compiled some goals that a corporate accelerator should have so that they can win along with some challenges and potential alternative paths to achieve those goals.
The innovation agenda
Usually, the rate of innovation outside is much faster than inside a large company, hence the need to get exposed to the latest in technology and potentially collaborate with startups to strengthen the supply side of innovation.
Running an accelerator is a full-time effort and also takes a long-term commitment. Are you willing to commit money and talent for at least three years to build and sustain a program?
A few alternatives
If the answer is ‘no’ for such commitment of time and money, then perhaps you can consider inviting a few relevant startups from your industry for a night of pizza and drinks and stay in touch with them thereafter. And if you don’t know where to start, just ask an existing independent accelerator to refer a few names, they’ll be more than happy to oblige.
Like startups, you too can start small
The brand building agenda
Whether it is to attract talented people or to build a perception of being an innovative brand, an accelerator seems to be a magic wand. Some enterprises go to the length of even hiring a Chief Innovation Officer to run the program.
Let’s agree – large organisations have bureaucracies, something that we all despise, and for startups, this is completely repelling. They are small, nimble and live in frugal ways – if you commit something to a startup but it ends up tangled in bureaucracy, the whole point of the accelerator will be moot. Worst, you may have built negative brand imagery in the market.
Tackle bureaucracy by having clear terms, paperwork, opportunities and expectations with startups before you engage them, not after.
Bureaucracies of large corporates repel startups from joining. Sort them before you start an accelerator.
The value proposition
From acqui-hiring to getting proof of concepts built rapidly, the agenda of a corporate to start an accelerator can vary but this is not why a startup applies to the program – they need a clear value proposition.
Free cloud credits and mentor hours alone don’t cut it anymore; startups are spoilt for choice when it comes to choosing an accelerator. You’ll have to be razor sharp in defining what your program brings to the table.
Defining a clear program agenda and attributes in which success is measured are the usual parameters that play a spoil sport. Additionally, finding the right mentors within the organization to volunteer, assigning success managers for the incubating startups and not having clear OKRs (objectives and key result).
Simplify the program and what is measured as success. Back in my days at Google, there were ten parameters of success, but I used to measure just two parameters and they were
- whether the startups got funded within eight months of being accepted into the program
- whether they got any revenue (either through paid pilots for b2b or acquisition of paying customers for B2C startups).
For managing mentors, identify mentors within your company who can empathise and have been exposed to a startup environment. Most of the startup founders find it very difficult to relate to some mentors who might not have been through a similar journey.
Closing two cents
For a large corporate, starting an accelerator may sound easy, after all, the prevailing assumption is that it just takes a few conference rooms and volunteering employees as mentors to get started, but the reality is different.
The top needs to commit and the execution team must dedicate. If that’s a challenge, then you may consider collaborations with the ecosystems through hackathons, demo days or elevator pitches which does not warrant a long-term or permanent commitment, but gets you results in innovation by creating access with cutting-edge startups.