Yesterday we rounded out #GEW2014 at the #THUDzaFinale, where Harish gave a keynote on the African Leadership family of organizations (ALN | ALA | ALU) and the complementary ways we support African entrepreneurs (ALN Ventures | AAE | Anzisha).
Congratulations to the winner of the evening’s pitch competition, and to everyone who had the guts to get up and defend a business idea in front of such a large crowd! Props go to our friends at The Hookup Dinner for an awesome event. You can check out some pictures at the bottom of the post.
The week’s gotten us talking to all kinds of founders, and a lot of them want to know more about accelerators like ALN Ventures. More particularly, we’ve been getting the “big” question: how do I choose the right accelerator for my business? So without further ado, here’s what you need to consider when you take this make-or-break decision:
The (Right) Network: The most important benefit of an accelerator is who they know and can bring into your world. You’re going to need additional sources of capital (investors), experienced experts (mentors), a support system (coaching), and business-building resources (legal, financial, tax, marketing, and other support). Getting connected to the right network is the most important thing, because the benefits extend beyond the length of the program. In fact, if you do it right, your accelerator connections will last a lifetime.
As a founder, think in the long term. When you look at a network, be sure to look beyond just those people who can enhance your business at this time. The broader the network, the larger the lifetime value – and remember that your needs are constantly changing, too. For example, a tax expert who doesn’t seem particularly valuable to you as a bootstrapping startup might just become the most important person to know in a few years.
Mentorship: Graduates of accelerators consistently cite this as the most important thing they got from their programs (see here and here). Getting the most out of an accelerator means really engaging with the mentors. The best mentor relationships typically bring together that special combination of a mentor’s technical expertise in a field, and her track record of entrepreneurial success in a similar industry or geography. If you’re doing it right, your mentors act as an informal or formal board, who set you up for accountability and success.
Knowing what you want to get from mentors is crucial. This is why mentorship readiness is so important. To really leverage on these important people, you’ve got to be targeted, self-aware and honest. You have to know your business inside out, know what your competitors are thinking, and have data to support your ideas and plans. Going into a mentor relationship with mastery of the basics of your business means you’ll get richer, more nuanced, and more actionable feedback.
The Accelerator Team: A good Accelerator team goes well beyond facilitation and project management. They critique, advise and collaborate to make sure that you are mentor-ready and investor-ready. To effectively take advantage of the skills of the accelerator team, have a plan of action. Imagine that you hired a talented, motivated and well-connected team who are intensely focused on helping your business succeed. And they work for you about half a day a week. What can they do for you to make sure that you move your business in the right direction? Recognize their value and prepare yourself to make the most of it.
Forcing Function: Often overlooked, this is a critical function of an accelerator. It’s your first accountability partner. Very, very few of us are so intensely self-motivated that we can avoid distractions, self-doubt and inaction. An accelerator should help you set ambitious targets, and push you to achieve them. The best athletes need coaches and trainers. If you’re a recreational athlete, you can make due without one, but to really be pushed beyond your comfort zone, you’ll need that external shove.
Peer Group: Accelerators admit cohorts of entrepreneurs, meaning you instantly have a number of other founders to connect with. Much like the networks you build at a school or MBA program, these peers can give you honest feedback, empathize, and provide tips & tactical advice. They can even become partners, customers or suppliers. Choose an accelerator that provides a cohort of entrepreneurs who are as talented as you, and will challenge you with the diversity of their perspectives.
Curriculum: Accelerators usually include a “classroom” component. Assess which skills you have, which skills you don’t, and what you already have easy access to. An accelerator can add value by giving you the knowledge you don’t have and can’t easily access. Of course, you can get all the information through books, online courses and talks. However, a good accelerator structures the most useful information into a coherent curriculum. This transfers the burden of sifting through all the available material to someone else.
That said, time and context are everything. So every founder who is considering an accelerator should evaluate for herself if the curriculum will be valuable, and whether the timing is right for it.
Media Exposure: Accelerators amplify your voice. Whether it’s through structured marketing help, or through their communications channels and networks, they should enhance your visibility. This matters most in the very beginning, but the benefits of extra exposure stay with you over time.
Your Credibility: Going through an accelerator backed by a respected network of investors and mentors is a powerful signal about you. Investors, future hires and even the media look at graduates of these programs very differently. Outside observers see the accelerator alumni status, and say “someone else has seen enough in the company to invest their time, energy and money into it.” That matters (a lot).
Seed capital: This item is last, and that’s an intentional choice. The money accelerators invest in startups as seed capital is a practicality, and certainly not the reason to consider the offer. The typical accelerator provides anywhere between $10 – $30k—an amount unlikely to drastically change the trajectory of your business. And from our observations, most resourceful African entrepreneurs can raise this sort of amount anyway through family, friends, loans, grants and prizes. But the cash does matter somewhat. Some think of it as added ‘runway,’ empowering founders to focus on the job at hand, i.e. building the business and getting customers. For others, it’s a buffer of comfort that the company can use to “splurge” on things like a web designer or an intern. From the perspective of the accelerator, making a modest, fixed investment at this stage makes for a transparent, straightforward and fair offering.
So there you have it. There’s an ever-growing number of accelerators on the continent. Choose wisely.
Some snaps from last night. We particularly enjoyed the jollof rice.