Incubate or accelerate? Making startups work

My company MiniMonos was the first non-European Union company selected for the Springboard accelerator programme in the UK. We (chief marketing officer Kaila Colbin, chief technology officer Greg Montgomery and I) weren’t sure what we were in for during the three months, but here’s Kaila’s blog about the experience.

Incubators are designed to get startups going and help them through the first year or so. Accelerators usually last for 12 weeks or less and work well for digital businesses whose products have a shorter lead time than those with hardware or physical products. The two models are complementary - a business could start with incubation, get accelerated and then go back into incubation.

At MiniMonos we felt like the accelerator programme pushed the business forward a year in 13 weeks.

In New Zealand I think we need both of these models. There are a few accelerators underway: Hyperstart is coming to Wellington next year and the Ministry of Science and Innovation is getting funding together for one. I think Wellington is a great place for an accelerator as it is small and it’s easy to get around the tech sector on foot.

There are two styles of accelerators, both modelled on US pioneers. Both offer seed funding and residential programmes for around three months. The first is more like YCombinator, where teams are chosen and a small, tight team helps get the founders through the startup process as fast as possible. The techstars approach is more mentor driven. SpringBoard is more mentor driven so I am probably biased! Success depends on the quality of the mentors - ours were amazing.

The benefit of acceleration is we (the startup ecosystem of founders, staff and investors) don't waste time or resources on stuff that isn't going to work. The plan is to validate fast and implement lean startup techniques. Some companies will ‘pivot’ or change their businesses completely within the three months - at SpringBoard one team did this twice in three months. It is much better to do that early and quickly than waste time trying to make a crappy business idea work.

If you’re using an incubator, I think you need to find the one with the best mentors for your business and the best track record in your kind of industry. So far New Zealand incubators have tended to be everything to everyone - with the exception of WebFund which has been really clear on its model - but it has private money and that may have made the difference.

It’s time for specialisation. It may be that classical incubation slows digital or internet businesses down when its intention is to speed them up. I think it’s a good thing that we can have different offerings for different kinds of businesses.