How should accelerators define success?

[ak245]

Startup accelerators are typically a long-term play as most of their investments won't provide a return for many years. So how should they be measured? What is success in this space?

I've asked a few managing directors for their criteria of accelerator success. They typically say that it would be easier to say what success was not based on some examples of previous companies that have gone through the accelerator program:

Here is a list (in no particular order) of what some say success is not:

1. Founders quit within 3 months of demo day and went back to school
2. One co-founder gets a full time job and only works on the business part time. No growth in the business
3. Founders stop working on the business 9 months after program end (Variety of reasons)
4. One team was still in business 3 years later, no pivots, but no real growth in revenue.
5. A team was unable to gain funding, ran out of money and ceased to operate
6. Continuous iteration, never getting out of beta mode

Do you think accelerators should be judged by the actions of the startups once they leave the program? Or only for what is done during the duration of the program in tangible terms like revenue generation, traction, or funding?

What are your thoughts on how to define if an accelerator is "successful"?

Would you add anything to the list of "non-success?"

 

[knoton]

@ak245 Many people think joining an accelerator guarantees success. Anyone who has been around a program knows this is not the case. I think "success" can also be defined by the goals of the accelerator. Is it for profit? Does it take equity? What is the investment? But most importantly, what metrics are being tracked throughout the program...

I am in the camp of an accelerator being the truest form of startup, normally with a small team. Building a strong network, working with investors, answering to supervisory boards, and constantly iterating on the program to provide the best possible experience for the selected startups. Not to mention practically working on 10 problems at the same time.

First, one could argue as to the true value of an accelerator. I view it as a new age masters program for entrepreneurs. The lessons taught will go on for the rest of the founders life, often times not turning a profit for the investors involved with the startup in the program... As part of the management team of an Eastern European accelerator (originally form California) I have found building ecosystems to be particularly inspiring. Getting founders to new markets and driving ::Cough:: innovation.

Many accelerators also don't have the resources to follow up with alumni companies, and sometimes that may not be the strategy...

Now to answer your question... Success.

Since this is a business, success should be viewed as return on investment. Independent players include:

Success for investors: profit, network, opportunity for future investments, access to well-groomed founders.

Success for accelerator management: A positive NPS score is a good start. Word of mouth from alumni that it is a good program. Being able to bring in the best possible teams. Positive and well-organized program.

Success for startup: Drive sales, Proper seed investment, Network, access to cool opportunities.

Could go on all night, let me know if you would like the Skype about it in more detail.

 

[ro1245]

@ak245 Success would be 1) Making an agreed-upon plan with the accelerator and startup founders, and 2) fulfilling or exceeding that plan

 

[emily333]

@ak245 I don't think that the accelerators themselves should be judged by the teams. Unless you are TechStars or YC, I don't think that you should feel the same pressure to have each of your companies find perfect success. I also think that some of the non-success metrics can easily be successful metrics. The time is money mentality is one that is valid - I would rather have a team quit during the program or soon after then try to hold a dead horse up. Being around a few accelerators, for the teams going through, one end goal is to maximize the network they will be exposed to during the program. Even if the program sucks at the end of the day, they have met other people and teams that will ideally help contribute to their success in other ventures down the road.

Success for the accelerator has to measured (this is a terrible metric) by the people and opportunities you surround the teams with. If I could look back with the accelerator I'm running and say that there was no better set of people or other teams I could have had in the room, then the best of what I could do is on the table. Teams only get what they put in, I will bend over backwards to get them intros to where they need to go but it's up to them to capitalize.