6 Insights From Accelerator Expert Susan Cohen
I had the honor of grabbing coffee with the brilliant and fun Susan Cohen, business professor at University of Georgia and leading expert on startup accelerators.
If you haven’t had the privilege of working with her as a mentor, following her on Twitter, or taking her entrepreneurship class…NEVER FEAR!
We crammed decades of research and experience into a 60 minute chat and now I’ve distilled that into 6 practical, actionable gems to maximize your accelerator experience.
Thank you, Professor Cohen, for generously sharing your knowledge with startup founders and leaders.
1. Accelerators work!
A good program can:
Accelerate customer traction
Shorten time to raise
Increase the amount raised
Shorten time to exit
Accelerators also increase the influx of investment into startups in the region. Not just to the startups at the accelerator but to other startups in the market as well. So even if you don’t get into that local accelerator, know that it may still be helping you long term!
2. Not all accelerators are created equal.
There are good accelerators and not-so-good ones. What should you consider when evaluating an accelerator?
Deal Terms
Most accelerators take a % of ownership in exchange for seed capital.
Are the terms similar to other accelerators?
Is the value of the accelerator worth the dilution?
Mentorship
Who are the mentors and how can they help your business?
Resist the sway of big names. The best athletes are not necessarily the best coaches.
Some of the best mentors are founders a bit ahead of you.
Do the mentors have experience in your industry and company size? A great tennis coach won’t help you play basketball.
Multiple mentors per entrepreneur is better than a single dedicated mentor. A variety of opinions, backgrounds, and personalities is key.
Managing Director
What’s their background?
Are they a previous founder? Investor?
How’s their network? Will it help your business?
Track Record
Have companies similar to yours graduated from the program? How have they fared?
Talk to alums of the program and ask about their experience.
3. Accelerator fit matters. A lot.
Pick the right accelerator based on your industry, target customer, geography, business model, and personality.
Geography matters - a good accelerator will exponentially grow your network. Where do you want your future network?
If you are a hardware company at a mostly SaaS accelerator, the learnings, mentors, and peer relationships may not be as helpful as a hardware accelerator.
If you sell to government and everyone else in your group sells to SMB, the customer traction process may be wildly different. Or maybe you’re pre-product and everyone else has a product already.
If you sell to the accelerators’ alumni base — other startups, for example — that’s a home run!
Being in the wrong accelerator even if you can “get in” has potentially negative downstream effects:
Waste of time
Discouraging
Negative investor perception
If you go through top tier accelerator and don’t get funded, investors assume something was wrong even you’re a great founder with a great business.
4. Attend all sessions. Meet all people.
What accelerator style performs better?
(A) Customized sessions and mentors for each company
(B) Standardized tracks regardless of product, market, or founder experience
Surprise! Even the most innovative, creative founders do best on (B) – the standardized track.
Why?
We’re not as smart and special as we think. (Except for you. YOU are a unique snowflake. I’m talking about the others 😉)
If we’re already knowledgeable about a topic, our default is to opt out:
“I know how to play tennis, I don’t need a tennis lesson.”
But if we have previous experience, we’re better able to learn MORE:
“Because I already know the basics of tennis, I can fine tune my game. I’ll get more out of a tennis lesson than someone who doesn’t know tennis at all.”
Varying levels of knowledge in each session helps entrepreneurs learn from each other. The former-CPA founder learns from the former-CMO founder and vice versa.
5. Leverage the peer group.
One of the best parts of accelerators is the founder/CEO peer group. Starting a company is lonely and hard. Having others that understand can help you weather the roller coaster.
Peers also increase the speed of learning and execution. You push yourself harder when others around you are pushing too.
Achievement inspires achievement: “If they can do it, so can I!”
Peer-to-peer learning tends to be more tactical. It’s a quick question via Slack. One question to a peer could save you a whole day of research or testing.
Professor Cohen puts it best:
You learn strategy from your mentors. You learn execution from your peers.
6. Make the most of mentors.
Step 1: Listen for different ideas
Mentors may suggest advice that conflicts with your own ideas.
Most entrepreneurs (ahem, most people) hear advice that jives with their own ideas louder than advice that conflicts with their ideas. Resist this temptation and listen for advice that is different.
The goal of advising sessions is to deepen your understanding, not to confirm what you already know.
Step 2: Listen for trends across advisors
Keep track of what different mentors say to see where they agree and where they don’t. If you keep hearing similar advice over and over, the general advice is probably right.
For example, if you keep hearing suggestions about your business model, even if the details differ, you probably need to re-examine your business model.
Bonus! Ask for ideas about alternative business models in your next mentor meeting.
Step 3: Test it!
Advice is not take it or leave it. When in doubt, test it! Design a quick test to gather data and assess the results.
Need help? Work with a mentor to craft a lightweight test.
Want More Accelerator and Startup Research?
Do you love these learnings from Professor Cohen? (I do!!!) For more awesome research and insights, check her out on LinkedIn, Twitter, or read the research:
The Role of Accelerator Designs in Mitigating Bounded Rationality in New Ventures
What Do Accelerators Do? Insights from Incubators and Angels
Extra Credit — take her evening MBA class at UGA’s Terry School of Business in Lenox!
She’s a startup mentor, angel investor, and huge asset to entrepreneurs everywhere. 🙏🙏🙏
Fantastic content and excellent idea to turn an actual conversation (even better that it was over coffee ☕️) into a blog with lessons and useful advice!