There are now more support resources for startups than ever. Trouble is, most oversell and under-deliver. There are literally thousands of startup accelerators, incubators, coworking spaces, innovation hubs, government-funded small business associations, university programs, and more. So far, many are delivering too great a share of the wins only to themselves, leaving a long road behind them littered with failed startups and sterling intentions. More at - http://shadoka.com/do-accelerators-and-incubators-serve-themselves-better-than-startups/.

1. By Faisal Hoque
founder of:
DO ACCELERATORS AND INCUBATORS
SERVE THEMSELVES BETTER THAN
STARTUPS?
There are now more support
resources for startups than ever.
Trouble is, most oversell and
under-deliver.
[Photo: Rawpixel.com via ShuBerstock]

2. According to the 2015 Kauffman
Index on startup activity,
American startups are on the rebound, with approximately 310
entrepreneurs for every 100,000 adults in the U.S. today which translates
into roughly 530,000 new business owners coming onto the scene every
month.
An enGre industry of startup support programs designed to help
entrepreneurs beat the odds.

3. ACCELERATORS AS FAR
AS THE EYE CAN SEE
There are literally thousands of startup
accelerators, incubators, coworking spaces,
innovaGon hubs, government-funded small
business associaGons, university programs,
and more.
AngelList alone shows over 4,233 incubators
on offer, while F6s lists some 3,851
accelerators at the Gme of this wriGng.

4. And accelerators are just the Gp of the iceberg
when it comes to the range of resources available
to startups and entrepreneurs.
Of course, support programs for new businesses
aren’t a new phenomenon. What’s arguably
changed quite a bit since then is the degree of
confidence we’re apt to place in
entrepreneurship as a means to progress and
profit alike.

5. And despite what one observer characterizes as increasing
chaBer about “a possible ‘accelerator bubble’” and
skepGcism for “the viability of the accelerator model,” this
confidence remains largely intact.
It may be true that, as Forbes columnist Brian Solomon
writes, only 2% of companies to emerge from even the top
20 accelerators have a successful exit. But it’s also true that
some of the leading accelerators, like Y Combinator,
TechStarts, and a handful of others, have produced major
successes like Airbnb, Dropbox, and Reddit.

6. HOW ACCELERATORS
EARN MONEY
The programs' impact and success
rates vary widely, o[en according to
how each one is structured, operated,
and financially sustained.

7. All of them face roughly the same challenge:
“How,” as the innovaGon charity Nesta frames the
issue, “do you charge a startup/client that has
very liBle resources today and may never make
money?”
Accelerators and other ventures tend to take one
of three broad approaches to generaGng income
from startups…

8. Growth-driven: programs are primarily
dependent on growing the startup as it
generates revenue from equity
Fee-driven: programs charge clients member
and service fees as well as rent
Independent: programs are supported not by
income from startups, but by sponsors, public
funds, and events

9. This table from the Nesta study breaks down these differences in greater detail:

10. THREE ISSUES WITH STARTUP
SUPPORT SERVICES
While most entrepreneurial support programs try
to provide tangible benefits—from funding and
mentorship to access to investors—they o[en
miss some basics.

11. And in the process, unfortunately, they wind
up doing a disservice to those they’re
ostensibly trying to help, while sGll appearing
to jusGfy their own existence.
Here are three of the most common issues…

12. 1. The evaluation process isn’t
scientific enough.
Companies in accelerator programs usually create
a business plan—a staGc document that
describes its market opportunity, products and
services. In real life, they rarely holds true during
the execuGon phase. In real life, the business plan
rarely holds true during the execuGon phase.

13. More oOen than not, it soon becomes
necessary to reevaluate how a company is
doing—checking its growth potenGal while
balancing new innovaGon against operaGonal
execuGon, developing processes to reach
revenue growth while keeping an eye on cash
flow, and pushing out a sustainable brand
strategy, just to name a few.

14. These are big-Gcket, interlocking issues, and it’s
tough to fault accelerators, incubators, and all
manner of other support programs for failing to
evaluate them rigorously. But that failure ends up
gecng passed on to clients, which in turn too
o[en fail themselves.
These programs need beQer ways to consistently
monitor every new business team’s capabiliSes
and capaciSes to adapt and evolve.

15. 2. There’s a lack of real,
hands-on mentorship.
Any support program can put a list of well-known
mentors on their website who agree (for a fee) to
provide their advice. The best accelerators develop
relaGonships with a select group of mentors who can
offer hands-on entrepreneurial experGse.

16. The best accelerators develop relaGonships
with a select group of mentors who can offer
hands-on entrepreneurial experGse.
The U.S. Small Business AdministraGon reports
that some 70% of small businesses receiving
mentoring services survive for five years or
more—roughly double the rate of non-
mentored entrepreneurs.

17. So there’s liBle doubt that good mentorship can
make an enormous difference.
But when there’s a disconnect between what a
mentor can add and what the startup requires
or expects, momentum can quickly stall.

18. 3. Many programs don’t
have the brand
recognition to attract
high-quality startups.
Every support program needs a sustainable pipeline
of new companies in order to stay afloat. To date,
too many are under-delivering while being propped
up by the outsize demand for services.

19. As with any other business, accelerators,
incubators, and others—especially those that
aren’t in the top Ger—need to get their names
and messages out there.
Brand equity takes Gme to build. A strong, well-
jusSfied reputaSon doesn’t come easily or
overnight.

20. But there are a few places to start. Thought
leadership content that creates a sense of
differenSaSon, added value, and excitement
among entrepreneurs is a good first step.
And LinkedIn, Facebook, TwiBer, and other
social plahorms, whose uses in the business
world are evolving, can help programs build
deeper connecGons with entrepreneurs that
they can later deliver on.

21. So far, many are delivering too
great a share of the wins only to
themselves,
leaving a long road behind them
littered with failed startups and
sterling intentions.

23. Shadoka’s por[olio of offerings enables
entrepreneurship, growth, and social impact. Our
customers and partners aspire to create sustainable
value. They are focused on repeatable and
measurable impact. We enable their aspiraGons.
We bring together the management frameworks,
digital pla[orms, and thought leadership for:
• EvaluaSon, execuSon, and monitoring of
programs
• Scaling sales, revenue, and profitability
• CreaSon and management of digital
communiSes and marketplaces
About SHADOKA
Follow us @shadokaventures
shadoka.com

24. About Me
Founder of Shadoka and other companies. Shadoka
enables entrepreneurship, growth, and social impact.
Formerly of GE and other global brands. Author of
several books, including Everything Connects – How
to Transform and Lead in the Age of Crea:vity,
Innova:on and Sustainability (McGraw Hill, 2014)
and Survive to Thrive – 27 Prac:ces of Resilient
Entrepreneurs, Innovators, And Leaders (MoSvaSonal
Press, 2015).
Follow me @faisal_hoque
faisalhoque.com