Are Accelerators a Waste of Time?
Written by Nigel Parrott
A recent report from Stryber, based on Crunchbase research, concluded that start-up businesses that had joined a corporate accelerator performed worse than if they went it alone. How can this be?! Shouldn’t the corporate be able to accelerate knowledge of the category, provide distribution opportunities and attract the very best talent? The same article also suggests that businesses joining ANY accelerator only marginally improved their success over going it alone. We have witnessed this ourselves and agree some accelerators offer little benefit, particularly when run by corporates.
So something is clearly wrong with the current accelerator model.
Here at Mission Ventures, we run accelerator programmes for food and drink start-ups differently. And that makes a difference. The brands we have worked with show a portfolio value growth of +300%. But like all entrepreneurs we keep looking for opportunities to improve. At the beginning of 2020 we distilled the key requirements for success and re-invented our process to bring a new and unique approach to acceleration.
Before Christmas, I was invited to and attended an international innovation session for a global FMCG company. They wanted to know how smaller food and drink brands are out-competing established market leaders. I gave my presentation, largely on SPEED of innovation, start-ups’ ability to act and ADAPT quickly and the critical need for TIMELY advice. But I also listened. I went away with some valuable learning - corporates are struggling to innovate and successfully accelerate brands because of the FEAR of failure.
Mission Ventures deal with hundreds of SME food and drink brands. Most have a team of less than 10 people and are led by an Entrepreneur who’s driving the brand forward. If the brand offer isn’t right, it’s changed. If the sales channel isn’t right, it’s changed. If the pricing isn’t right, it’s changed... and changed within the month. The move might not be perfect, it might not be researched in detail, but it doesn’t matter - it's still moving forward. Past errors are badges of honour to the Entrepreneur. They know it is how they learn and they are just as quick to talk about their failures and the subsequent learning, as they are about their successes. Corporates really don’t seem to do this!
If there are 5 Corporate frogs on a log and one decides to jump off, how many frogs are still on the log? The answer is 5. Why? Because deciding is not the same as doing. If these were Entrepreneur frogs then the 5th frog would be long gone. It might have grazed itself slightly but it'd be off chasing the new improvements or opportunities. In a competitive environment, where first in calls the shots it is often better to make a decision quickly with imperfect information, or to implement an incomplete plan rapidly. They don’t let perfection be the enemy of good. And if they have access to experienced advice in the seconds before they jump a good outcome is even more likely. Time lost fully researching a plan, undergoing the full 5, 6, 7 gate step process and bringing all stakeholders on the journey through the 2 year development process may give the corporate innovator the proverbial “book down the trousers” defence against future failure but in doing so, the initiative is lost. That more nimble entrepreneur has beaten you to it and their product offer has got in first.
It was clear to me that the global innovators of one of the most respected FMCG businesses, with the best talent, in the world, were never going to succeed unless failure was embraced.
The Entrepreneur in the SME, on the other hand, would make the change quickly because they believe it’s the RIGHT thing to do. They only have themselves (and perhaps some supportive investors) to report to and do not fear failure or blighting their prospects for promotion.
It was clear to us at Mission Ventures that accelerators were failing for many reasons and had to change. We have all sat in front of VC’s, accelerator Mentors, and Investors. We have patiently listened to the screamingly obvious…. “You should look to sell more”, “You need to buy better”, “You should sell at a higher price”… All of this is useless advice without actionable solutions but because they hold the purse strings, you grin and bear it.
Accelerators should not be like this. Accelerators should be talking in the language of the start-up, not the corporate Banker or Lawyer. They should respond as quickly and flexibly as the start up. They should share their real world knowledge and expertise to short cut through to good, practical, innovative decisions. They should anticipate failure and help to minimise it, but without stopping the process. The skills required can only really be obtained by actually running your own food start-up and taking it through to exit successfully. The people who really do understand the physical and emotional journey and can offer real-world advice, at the point of need to support new Entrepreneurs are successful Entrepreneurs. That’s what makes Mission Ventures different. We support food and drink start-ups through an intense, hands-on 12 week process, with regular ongoing support, that nurtures them to a position of delivering true value in their respective categories. We combine our approach to acceleration with access to corporate funding and category expertise to make this happen. We don’t fear failure. Speed and nimbleness are central to our approach and we are there for every business when they need us.
Artist: https://dilbert.com/