There are more than a hundred start-up accelerators and incubators in India today, most of them offering a mix of services. Some offer mentorship, others give away freebies and real estate (office space) and in the odd case your start-up may even receive a cash supplement in return for company equity. One thing remains constant and that is the fact that all of this is packaged into a program lasting anything from three months to a year with the intention of bringing your company up to speed and investor ready.
Undoubtedly accelerators and incubators are valuable to entrepreneurs which can be seen with the success of some brilliant companies such as Little Eye Labs (recently acquired by Facebook). But as much as they are doing some things right, sometimes things still go horribly wrong.
Mistake #1: Assuming that joining an incubator is a guarantee to success
The first instance where entrepreneurs make a mistake is when they assume that an accelerator or an incubator is a sure shot guarantee to further rounds of funding and a big step towards becoming the next million (or billion) dollar company. This is absolutely incorrect. Even Y Combinator, the original accelerator, does not have a 100% success rate.
Mistake #2: Thinking all accelerators and incubators are the same
No two accelerators are the same. There are vertical focused programs, regional programs and even actual classroom sessions. These nuances clearly show that each accelerator / incubator will produce very distinct results. What invariably happens as a result of this is that most start-ups then do not apply to a bunch of programs and then join whichever one accepts them – in an almost all for nothing game.
Mistake #3: Not doing due diligence on the incubator before joining
Almost all the start-ups that I have met lack one basic ingredient and that is research. How many of us have asked accelerators / incubators hard hitting questions such as how will they help us with customer development or will they build an advisory board for us. If you don’t get clear cut answers to these questions, the program may not be worth your time. There are times when program co-coordinators claim to even have high profile connections but in reality this is just a sham.
Mistake #4: Mismatch between founder goals and incubator’s aims
Many a times, there is absolutely no alignment between the business needs of the company and the incubators needs. When you are accepted into an accelerator / incubator program, there is a lot of pressure to scale quickly as well as an emphasis on fundraising and how to attract investors. That is absolutely fine if that’s what you want from your business but it’s not necessary for each and every company. Sometimes it not such a bad thing to bootstrap and opt for slow growth instead.
Mistake #5: Confusing demo-day as the final goal
You may have heard of the concept of Demo Days. Sounds great if you’re a start-up founder, right? There is no doubt that Demo Days are a great opportunity for start-ups to present themselves, their ideas and progress to a mature investor community. On the flipside, Demo Days in my opinion force entrepreneurs to put in their heart and soul for one single day. This at times completely derails the actual course of the start-up journey.
Mistake #6: Spending more time on ancillary activities than product development
When you join an accelerator / incubator program, there are tons of “must attend” events as well as the typical classroom sessions. While this may not be a bad thing but the objective of a start-up is to build a product, get traction and keep it afloat by any means (legal and ethical) possible – at least till you achieve ramen sustainability. Anything that takes you away from that process is a waste of time of the already limited financial, technological and people resources that you are working with.
Don’t get me wrong – I am only giving you the situations that one does not think of when they apply to accelerators / incubators across the country. These are only tips and guidelines to follow when deciding whether to join a program or not. A lot also depends upon what stage your start-up is at, and how you want to build your company. Such programs are not for everybody but remember that there are start-ups which have built exceptionally good brands without the help of accelerators / incubators. On an ending note, as long as you believe in yourself and in your start-up, sky’s the limit – with or without accelerators / incubators.
Guest Author: Arjun Sachdeva
Arjun is Co-founder of GuideTrip (www.guidetrip.com), this is his second start-up.