How To Hack Your Own Accelerator
I want to break down how I’d hack the VC accelerator experience if needed for those that may not make it. Though before I get to that some statements I’ve heard across working with three different accelerators, incubators over 6 cohorts, +60 companies and +2,000 applicants… yet still a student of life;
- I’m too advanced for an accelerator?
- I’m too experienced for an accelerator?
- All I need is money money money and voilà I will be successful?
The above are some of the most common admitted-to and not admitted-to thoughts that founders can have about joining a VC accelerator. Hey, we’ve all been there and done that so firstly it’s ok. Second, the term “accelerator” has become a meme and not all accelerators are the same so it’s normal in a world of generalisation to quickly lump them together now and filter later.
ALL WE NEED IS MONEY MONEY MONEY
Most of the time when someone says this, the challenge is in fact:
- They haven’t spoken to enough of the right investors.
- If you’re getting rejected by investors that invest in startups and are still getting “No”, “Maybe” and “The eternal indecision”, then there is something that doesn’t resonate in the messaging.
- The valuation and future multiples available don’t line up with your current metrics.
I’M TOO EXPERIENCED
You know, like I’m grandmaster mage level +1000 charizard in pokemon for an accelerator to provide more than money money money.
This could certainly be true, though most of the time this is like a mantra chanted by an athlete to dispel self doubt rather than the complete truth. Most of the time this mantra slows the rate-of-change of a founder and a startup by limiting the ability to capture opportunities as they arise.
With those points covered and cleared, there is still sometimes practical reasons why you may not receive investment:
- There’s an internal narrative that our existing investors and mentors can provide the same value, and don’t want to be diluted relative to the upside they can currently visualise.
- I was unable to make the accelerator and would like to replicate a similar level of support.
THIS IS THE 80:20 OF THE VALUE OF AN ACCELERATOR AND HOW I’D HACK IT.
CREDENTIALISM AND SIGNALLING
Almost every investor in some way acts as a signal to other investors. Accelerators and marquee investors make it easier to raise more capital, hire amazing people and secure bigger deals. It’s in part because each brand carries with it an assumption on the level of diligence, quality of companies and partly because even private markets have groupthink. The assumption is that it’s a higher quality groupthink though it’s still groupthink.
How I’d hack the credentialism and signaling of a known accelerator: Secure the right marquee investors and clients. This can be done through direct outreach or leveraging the social and career capital of your team. You can also try to scale the networks of your existing investors, mentors and team members while effectively managing the incentives at your disposal.
DON’T GET STUCK IN SMALL CAPITAL POOLS
A number of companies get stuck in small or unsophisticated capital pools. We’ve all been there where investors have a unit bias toward owning 40-51% of a tech company, insist on disproportionate control measures and struggle to attribute value or align incentives. I’ve seen this across the region including in pockets of some well-established ecosystems. Great accelerators and VCs have their own networks of investors and support portfolio companies in becoming multimarket, accessing capital pools and investor communities that are aligned with founders, and understand the asset class.
How I’d hack access to larger capital pools: Understand which investors your startup is relevant to and be aware of the opportunity in your local market as well as internationally. Once you’re relevant don’t constrain yourself to raising money locally, be willing to seek international investors to close your future rounds. Find other founders from your local market that have done similar rounds, exchange notes so you can avoid the common pitfalls.
FIND RELEVANT PRODUCT AND GROWTH KNOWLEDGE
University and executive programs have attempted to reverse engineer how to build and grow technology products. Yet those that have successfully done it are less than single digit percentages of those that pursue it. The reason is that each product and market has its nuances and is constantly changing. Relevant advice has a decay function. Some of the best advice that I’ve experienced has come from founders who have successfully implemented what was sought days or months before. Great accelerators and VCs share these learnings between founders at a rate that is seldom replicated outside.
How I’d hack access to relevant product and growth knowledge: Find a group of high quality founders at varying stages of product development and growth. Select the group based on relevance and recency to the problem you are solving. Catchup at a regular frequency or interval, share challenges and jam on solutions. Keep growing the group and it’s diversity to avoid groupthink and recycling stale thoughts.
BUILD A GROUP OF PEERS RUNNING AT THE SAME PACE
The speed at which companies grow is based on the growth rate they are willing to accept and work toward. This happens at a considerable pace in accelerators if you are surrounded by other high growth companies. At Accelerating Asia the overall portfolio of companies has 5X growth within 12 months of the program and the top 15 companies have 25X growth within 12 months.
How I’d hack a high growth group of peers: Set up an accountability group with fellow founders that are running at hyper-growth speed. Share your monetisation, engagement and retention metrics with each other in a weekly standup. Hold each other accountable to celebrate the wins and share the losses, keep pushing the rate of change and share solutions and methods.
STAY RELEVANT WITH TRANSACTIONS AND INVESTOR NARRATIVES
Great investors and startup founders stay up to date with macroeconomic shifts, transactions and narratives surrounding up and coming technology companies. This information gives them an advantage when crafting their own story for a product or capital raise, and making informed decisions about the direction of their companies. The top accelerators, VCs and angel investors compound this knowledge at a rate that is seldom matched. As a portfolio company or mentee these additional data points and context are often filtered and passed on to you. Signal minus the noise.
How I’d hack the knowledge of transactions and investor narratives: In addition to networking and providing value to other founders in their journey. Signup to and read relevant publications such as Stratechery and Launch Ticker. While it may not completely replicate the knowledge generated inside an accelerator and VC firm you will have more than most startups.
MAKE HIRING EASY NOW AND FOR THE FUTURE
It’s never easy to find the right talent for scaling your startup. Most of us will tap out our personal pools of people we know, second and third connections. An accelerator or VC often helps with hiring through signalling the viability of your startup through their support and direct introductions to team members who can make an impact or know someone that can make an introduction in your business.
How I’d hack the talent sourcing advantage of: Understand your future talent pipeline. Get a Linkedin Sales Navigator or Recruiter membership. Reach out to people that have the profile of the team members that you will need. Set aside some time each week/month to catch up with these people. Get them excited about your startup. Get to know them, and welcome other awesome people they may introduce you to.
FIND CO-SELLING OPPORTUNITIES AND SOCIALISE THE KNOWLEDGE OF ENTERPRISE SALES
Startups in accelerators usually share insights and contacts regarding enterprise sales and clients at a faster rate than companies in other communities.
How I’d hack an enterprise sales advantage through my own networks: Find friends and contacts that have products that are complementary in similar niches. Setup a communication channel or meeting cadence to exchange notes, and potentially incentives new accounts.
DON’T GET CAUGHT IN VANITY METRICS
We see this a lot where media mentions and awards make it into a company's pitch deck, while actual impact, traction and metrics take a back seat. If you surround yourself with people that celebrate the noise rather than the important stuff like metrics this gets worse. The “likes” and “comments” can propagate complacency. It’s harder to do this in an environment and team focused on growth, surrounded by a community of others also focused on growth. As the group always refocuses on the actual milestones and traction.
How I’d hack my social group to avoid the allure of vanity metrics: Stay off Facebook - LOL. No seriously, don't post on Facebook hoping that suddenly all those naysayers are going to support your startup aspirations, Mum, Dad, that weird Aunty that asks “why are you not a doctor”. Instead let the media do its thing and find a group of peers growing at the same pace. Always recenter on what your milestones are to get to your next valuation.
THE BOTTOM LINE
Overall I’d say that if I was founding again there’s plenty of value that I’d welcome from some of the best VCs and accelerators. I’d certainly want some of the amazing people I’ve met in the trenches with me, knowing the value they bring. There’s enough variance on the journey that it’s not a solo expedition.
While the overall mechanics of the value can be replicated, the actual impact of having the long-standing infrastructure, processes and incentives which drives people in accelerators and VC’s is seldom replicated by a sole hyper-specialised enterprise at the early stages of growth.