What is Startup accelerator Incubator Explanation?
Paul Graham, an American entrepreneur, and businessman set up the first accelerator program. He agreed to spend small amounts of money
What is the accelerator?
In 2005 Paul Graham, an American entrepreneur and businessman, set up the first accelerator programme. He agreed to spend small amounts of money in a cohort of software founders and to help them as a community to grow their ideas. His aim was to build value by engaging in a cohort on the same terms and to be able to provide them with the same resources at one time. Instead of working as an angel investor, participating directly in each company, with different terms and negotiations, and only funding each company on an individual basis.
Since then, the idea of start-up accelerators has expanded from the US to Europe and has become a global phenomenon. In academia, the accelerator analysis is comparatively recent and thus lacks broad sample sets or longitudinal research. This makes it impossible to determine whether or not they are operating definitively and to achieve a single description of the accelerator. In the research of accelerators, researchers and decision leaders have tended to deal with this shortage of evidence or clarification on what the accelerator is. This has been antagonized by the pace at which accelerators have grown and improved, sometimes leaving science and strategy behind.
However, what stays consistent in the controversy on accelerators is that they are systems developed to promote the growth of early-stage businesses or innovations. Generally speaking, the accelerator is a fixed-term programme that typically runs from three to twelve months. It blends teaching, mentoring and networking, often with investment. It is different from other types of investment and incubation, such as angel investments, grants or incubators.
Given the fact that accelerators are still relatively recent and quickly evolving phenomenon, they do have characteristics in general, and research into accelerators, including mine, has attempted to classify these common features.
First, accelerators are not incubators. In brief, the incubator is a facility that provides discounted leases, business support facilities and other incentives to early-stage companies. The renting of its tenants is the primary source of income. Whereas the incubator is a building and the accelerator is software, all types of incubation are mechanisms of assistance for early-stage companies.
In order to count as an accelerator, it must have a range of characteristics:
1. A fixed term schedule, with a start and an end.
2. A cohort of start-ups or participants
3. A large community of advisors to help start-ups
4. Mentoring the diffusion of implicit information
5. Education policy for the diffusion of learned skills
6. A screening mechanism such that the cohort is viewed as the strongest in class.
It would be safe to assume that if anything doesn't have such capabilities, it definitely isn't an accelerator. Equally, I am in support of utilising these parameters to describe 'accelerator-like programs,' which might not be absolute accelerators but might still attain some of their outcomes by these methods.
The explanations why these parameters are significant are that accelerators generate efficiencies for anyone concerned, and that is a major factor why they are seen to be useful.
Accelerator and efficiency
Accelerators, when done properly, bring together different stakeholder groups around their programme and make the commitments between them very efficient First, by running the application and selection process, a cohort of people or start-ups is convened that is the best in class in that context. The selection method must also be the product of a wide and transparent application process and a transparent review by respected individuals. This is critical because the perceived high quality of the cohort becomes a central point of importance within the accelerator, forming the social capital that is used to support the accelerator draw mentors, investors, and others.
Mentors are another key feature of accelerators. Mentors are an essential aspect of accelerators because they add tactile experience and poor links to the cohort. So, although the cohort is of benefit to the mentor network, the mentors are of benefit to the cohort. Without them, none would have seen any benefit in the accelerator.
Mentor networks need to be very broad and they need to offer non-redundant knowledge to startups in the cohort. Non-redundant material is the experience that entrepreneurs don't actually have, but also that they won't get back from other advisors. If all mentors operate under a single company, they are likely to have highly intertwined networks and expertise that would be less useful to start-ups. If they are a large network of individuals with little overlaps between their networks or expertise, they can add far more non-refundable information to the programme and thus more benefit.
As a consequence, it seems that the true importance of the accelerator programme resides in its capacity to collect non-redeemable sources of knowledge that are of importance to the different persons concerned. And the meaning resides in the accelerator's social network, it is social capital. The social capital may then be used to compensate individuals, such as advisors, by providing them early access to the novel and non-redundant knowledge in the cohort. And it gives value to startups by offering the same value in the mentor network.
Mentors often add meaning to each other, as a large community of interesting individuals who are not already related to each other. Accelerators also need to recognise that mentors need to be provided with a variety of rewards in exchange for exchanging their knowledge and networks:
• Access to new non-refundable information (start-up)
• Fresh network connections (other mentors, supporters, etc
• Social validation (promoting mentors on the website and championing them at events)
Failure to ensure that mentors are adequately compensated for providing their time and experience to start-ups would result in mentors losing confidence easily or unable to participate at all
The way accelerators gather start-ups together and then maintain obligations for them efficiently over a fast fixed-term programme produces the same productivity as a university that gathers students into courses. Mentors can address all startups at once, so that knowledge is transferred efficiently. Investors, companies, and others will now visit the whole cohort in one go, rather than 10 startups organised to visit each person separately. Savings in terms of emails to fix meetings, and actual meetings, are considerable.
If the accelerator is either sponsored by a corporation or funded by a government department, you will see how it will bind the environment easily and effectively. All this will happen without even investing in a start-up or looking for shareholder gains as a metric of progress. That's why I'm talking about accelerator-like operations, and why calculating accelerator effects needs to match more strongly the explanation why it was first set up.