There’s still a lot of confusion over just what exactly acceleration is and how it helps a young business. What largely goes unnoticed is that joining an accelerator doubles as a marketing activity for your business and the stuff it is selling. Let’s take a closer look.
What exactly is an Accelerator?:
An accelerator is a cohort-based support programme that runs for a fixed time period. By joining an accelerator programme, startups are offered benefits like mentorship and educational workshops. At the end of the programme, startups often compete in a pitch event or demonstration day.
The experience for founders is that acceleration provides a process of intense, rapid and immersive education aimed at “accelerating” growth by compressing years’ of learning into just a few months. For those that compete in a pitch event, cash prizes in the form of funding can be won.
The application process for most startup accelerators is open to anyone but it tends to be highly competitive. The biggest misconception about acceleration is that all startup accelerators will take equity in return for the support they provide. That simply isn’t true. Many accelerators will take equity but not all.
The 2nd P of Marketing is Place:
Using the 7P framework, ‘Place’ is where your target customers shop. But if you think outside-the-box, being in an accelerator as your location of business for a few months can be a tremendous marketing exercise that no generous advertising budget could buy.
Acceleration is Really All About Marketing:
For any young business looking to join an accelerator this can be the decision that cements your future success. In addition to all the support perks, acceleration also inadvertently helps early stage startups with marketing activities.
For example, joining an established accelerator as your ‘Place’ of business for a few months helps you develop your brand equity. This is because when you join an accelerator, your company is on display as a member of a specific cohort. The accelerator will often talk about you in their press. But you’ll also talk about being in that credible accelerator in your own marketing materials. Future customers and partners will know that you’ve ‘done your homework’ and thought about how to operate a successful business because you went through a quality accelerator programme.
Being a member of a cohort also puts your products and services on display in front of all the other accelerator members – past and present – and could lead to sales or partnership deals. Additionally, you’ll get to network with various people for investment opportunities. And for those founders who built their business with the intention to sell into a larger corporation, acceleration can also help get you in front of that corporate buyer so the acquisition of your dreams can take place.
What’s Different About Acceleration?
Various studies all agree that an accelerator has four qualities that make them uniquely special. Accelerators are:
* fixed term,
* end with a graduation that includes a pitch event or demonstration day.
No other early-stage institutional resources including incubators, angel investors or seed-stage venture capitalists provide these collective elements to startups.
Introducing Mass Challenge:
To further help us show and tell how considering acceleration can support startups, we’re pleased to announce that Mass Challenge, the world’s largest early-stage equity free startup accelerator, is joining Show me my Customers as a Participant.
MassChallenge was founded by John Harthorne, a Massachusetts Institute of Technology (MIT) MBA, and Akhil Nigam, a Harvard Business School (HBS) MBA in late 2008 while they were working as strategy consultants at Bain & Company. They had discussed launching a startup together, and the financial crisis gave them the inspiration they needed. The recession was driven in-part by large companies on extracting short-term profit, instead of focusing on sustainable, long-term profit. John and Akhil saw the entrepreneur as the ultimate value creator and driver of change in the economy, and built a business model that put the entrepreneur at the centre. MassChallenge is a global not–for-profit startup accelerator that supports high-impact and high-potential, early-stage entrepreneurs for zero equity.
The pair launched their first accelerator program in Boston, Massachusetts in 2010. Since then, MassChallenge has expanded to five global locations including Israel, Mexico, Switzerland, and the U.K, and maintains its not-for-profit status in each of these locations. Additionally MC is hosting Bridge to Mass Challenge in Poland for Central & Eastern European startups this summer for the first time ever. MassChallenge awards up to $2 million (USD) in cash prizes each year. To be clear: prizes come with no–strings attached.
This is an important difference to highlight. While many accelerators will take equity for the resources and funding facilitated for a startup, MassChallenge takes nothing from the founders/startup. Instead, MassChallenge is supported by a community of global and local partners. MassChallenge connects participants to, an established international community of startups, world-class mentoring from industry experts, tailored programming, and unrivalled access to corporate partners.
According to MIT research, MassChallenge startups are 2.5x more likely to raise more than $1M in funding and hire at least 15 employees than startups who do not participate (Dr. Daniel Fehder). Additionally, last year, TechCrunch conducted the first comprehensive study on women in venture capital and their impact on female founders and named Mass Challenge as the number one seed investor in the world for female-founded startups.
To date the team at Mass Challenge has accelerated 1,211 startups, which have together raised $1.8 billion (USD) in funding, generated over $900 million in revenue and created over 65,000 direct and indirect jobs around the world.
Watch this space because the 2017 intake is just getting underway in Boston, Israel and Switzerland so these overall impact numbers will change. As Mass Challenge gets down to business with their 2017 cohort, Show me my Customers will show you how they are accelerating startups and share a closer look at some of the startup’s journeys.
To find out more about Mass Challenge and see if their zero-equity, early-stage, high impact programme is the right one for you, visit the MC website. You can also learn more about how to become an expert mentor here.
Note: Mass Challenge photos and YouTube video are copyright Mass Challenge.