Accelerator Programmes – Are They Worth It?
- Highly educated entrepreneurs are more likely to benefit from accelerator programmes
- Accelerator programmes in emerging markets are modelled after the programmes in developed countries without taking into consideration local or regional factors
- The programmes shouldn’t be one size fits all
For almost two decades, millions of people have tuned into the TV programme Dragons Den. The show offers a great opportunity for entrepreneurs looking to give their fledgling companies a boost, by pitching their potential to a panel of business gurus and appealing for their support. In return for a percentage of the company, the panel offer their funding as well as their expert know-how to take the business to the next level.
For the founders of Trunki, Wonderbly, Reggae Reggae Sauce and most recently PerfectTed, recently featured in Forbes, the programme has proved to the platform through which their small-scale ventures have reached untold heights.
In many ways you could suggest that it is a very public version of an accelerator programme!
But for entrepreneurs that aren’t looking for potential TV stardom along with the benefit of mentorship then other accelerator programmes are the way to go.
However, simply joining a programme might not be enough to get a business to the next level. Whilst such schemes offer entrepreneurs vital resources such as guidance, wider network support and sometimes even funding, not all entrepreneurs benefit from such environments in the same way.
A supportive structure?
Research by Dr Farzana Chowdhury from Durham University Business School and Professor David Bruce Audretsch from Indiana University reveals more about the worth of accelerator programmes.
“Accelerator programmes are a great support system for entrepreneurs,” Dr Chowdhury explains. “They can be an essential means to access physical resources, office spaces and networking services.”
But is that value the same for everyone? To explore this, she and Prof Audretsch reviewed venture performance in accelerator programmes as well as founders’ characteristics, such as their highest level of education, their entrepreneurial experience and their industry experience.
From their research, Dr Chowdhury and Professor Audretsch discovered who these accelerator programmes are most likely to benefit. And it isn’t such a varied group of people.
They found that highly educated entrepreneurs were more likely to benefit from accelerator programmes, often due to their knowledge gap lying in entrepreneurial know-how.
Whereas, if the founder had previous experience either as an entrepreneur or in their specific industry, accelerator programmes were not as likely to benefit their venture.
The findings suggest that accelerator programmes are better suited to founders who are brand new to the world of entrepreneurship, as such programmes do a better job of addressing and tackling the gaps in their capabilities.
One size does not fit all
The researchers’ focus was wide-ranging, exploring social impact, education, health, and quasi-innovation of patents and trademarks at venture accelerator programmes in over 100 different countries, spanning both developed and developing countries where accelerator programmes are becoming increasingly more viable as a means of stimulating new business and economic growth.
However, the researchers highlight, whilst greater support for fledgling ventures in developing economies is no doubt vital, many accelerator programmes in emerging markets are modelled after successful programmes in developed countries without taking into consideration local or regional factors.
And this, understandably, raises a few additional challenges.
The researchers state that a one-size-fits all approach is not the most effective route to fast-tracking new ventures. As their research has shown, founders have varied backgrounds and experiences, and this has an impact on how much can be gained from an accelerator experience.
Greater consideration, they advise, should be taken with the people behind the ideas rather than simply structuring support around the ideas themselves.
Thankfully, some schemes are beginning to take such ideas on board – most notably, the growing MultiChoice Africa Accelerator Programme has committed to tailoring its support to the people rather than idea, offering vital start-up support across the Ivory Coast, Senegal, Nigeria, Ghana, Kenya, Zambia, Angola and Ethiopia.
As with any effective service, support should be tailored accordingly to best fit the user’s needs.
Education isn’t everything
Whilst it could easily be assumed that those with a solid educational grounding will be inclined to perform well in future, Dr Chowdhury and Prof Audretsch warn that accelerator programmes should pay close attention to ventures where the founder has a high level of education. At the end of the day, education might not be everything when it comes to successfully turning a brilliant idea into a profitable business. For accelerators looking to rack up their success rates, ensuring such people are properly supported will pay off, as these are exactly the people who benefit most.
As Dr Chowdhury highlights, “it’s clear to see from our research that those with a greater experience in education, and a lesser experience in entrepreneurship and industry gain more from these accelerator programme benefits, as opposed to experienced individuals who’ve likely built this knowledge and these networks already.”
Having said this, that’s not to say there are exceptions to the rule. Many people who appear on Dragon’s Den often come from nothing, with Dragon Steven Bartlett himself going from university dropout to becoming a wildly successful businessman and the youngest ever Dragons Den investor. So, it is definitely possible to create a successful start-up without having the qualifications to back you up.
The key when it comes to support, the research notes, lies in variation. However, with accelerator programmes often currently following one-size-fits all format, such programmes might be missing out on creating the next big thing.
So, yes, accelerator programmes are worth it for some…
… Perhaps others would prefer to give an appearance on Dragons Den a shot.
By, Millie Jones
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