Why do accelerators work and why should companies go through them?
While we know there is no one single entrepreneurship personality, many entrepreneurs start their own companies to get out of the grind of daily structure. And, as I wrote in a previous post, accelerators put infrastructure around something so traditionally unstructured.
When companies join a Techstars accelerator, they fall into a strict routine. Meet 50-100 mentors, report weekly on KPI progress, send a weekly update to mentors and investors, pitch practice, and so on.
Companies get out of their garage and into an intense routinized work schedule.
One paper I recently read explains that while there is little evidence explaining how exactly accelerators affect startups, there is one critical benefit of an accelerator program: “structured accountability.”
Structured accountability “induces entrepreneurs to articulate and reflect about specific strategic tasks, an increase in self-efficacy, and knowhow about building a startup. We find no support for causal effects of basic services of cash and co-working space.”
Accelerators force what we often have no time to do — deep reflection. Often, that sort of contemplative time can only be found in structure. Sending out weekly updates to a captive audience, meeting with 75-100 mentors and investors pitching and iterating all of the time builds greater self-efficacy around a founder’s company.
There are other reasons why accelerators work. From making key startup milestones faster and providing intensive learning, developing the entrepreneurial ecosystem around the accelerator, and others. But, this focus on structured accountability I find really striking.
Another Brookings article asked one of our own founders, Brad Feld, why accelerators are so valuable, and different from other entrepreneurship support and early stage investors.
“[H]e likened the accelerator experience to immersive education, where a period of intense, focused attention provides company founders an opportunity to learn at a rapid pace. Learning-by-doing is vital to the process of scaling ventures, and the point of accelerators, suggests Feld and others, is to accelerate that process.”
Feld’s philosophy on why accelerators can work is validated by the findings around structured accountability.
When companies make the decision to join an accelerator, they’re certainly gaining a lot of important financial and network resources. But, they’re also gaining a critical training on teaching their teams how to create good work habits. And, while we hope all of our teams have really good work habits, we know that there’s always room to improve.
Learn to work like someone’s watching, even when no one is.