If you’re launching a startup, or you’ve hit a plateau in your business growth, any resource or opportunity that could catapult your business to the dizzying heights you dream of is worth exploring. Herein lies the appeal of the business accelerator, which fast-tracks the growth of an existing company, and the business incubator, which nurtures disruptive ideas with the hope of building out a business model and company. Or, as Tech Republic puts it, “accelerators focus on scaling a business while incubators are often more focused on innovation”. Are you looking for a hothouse to propel your brilliant idea into the success stratosphere like Canva, Atlassian, and Afterpay? Ready to create your own flying green monkey, black swan, or the coveted unicorn? In this month’s GUIDE, we look at all things Accelerators & Incubators
What are Accelerators?
A fledgling startup is a fragile creature. Finding mentorship, a place to work, and capital can be a tricky business. Even so, feedback, collaboration, and openness are all essential factors in any novice’s journey. Accelerator programs are an integral part of the innovation eco-system. They provide the means for young businesses to find seed funding, support, resources, financial assistance, workspaces, and collaborative partners as they set out on the road to success. Essentially, Accelerators “accelerate” business growth.
Sounds great. Sign me Up!
Most Accelerator programs are fairly rigorous in their application process. Understandably, to invest the time, energy, and capital into a new business is no small feat, so Accelerator’s take considerable care in deciding who will get a spot within the program. Accelerator programs generally have a specific time frame in which the successful applicants can grow their business. Most range from around 3-6 months. Throughout this period, companies work with mentors to build their business and solve problems. Accelerators not only provide seed funding, but they also help to align businesses with potential investors and partners along the way. Some accelerator programs end with a demonstration day (often called demo day) or presentation where new companies pitch their ideas to a series of investors. This can be an invaluable way to promote your company.
Who are some Accelerator alumni?
If you’re still not convinced, one only has to look at some of the businesses that have passed through Accelerator programs across the globe to appreciate the essential role they play within the innovation eco-system. Y Combinator, and Accelerator program based in Silicon Valley has funded over 2000 startups since 2005. Y Combinator supports all types of businesses with companies spanning everything from microbes to fusion reactors to coffee carts. In 2009, Airbnb graduated from the Y Combinator Accelerator program. In 2017 AirBnb recorded a $2.6 billion revenue. They currently have 12 736 employees.
So, what are Incubators?
Incubators are all about giving your business the support that it needs to grow. Incubator programs are generally centered around a co-working space. Unlike Accelerators, enterprises participating in Incubator programs may not have a set time frame or even an established program of goals that they need to meet during their stay. Lots of Incubators don’t have an open application process, instead choosing to work with businesses that they connect with through trusted partners.
Tell me more!
Incubate is Sydney University’s very own startup program. Established in 2012 by two entrepreneurial students at the University, Incubate is all about fostering a proactive community of entrepreneurs and assisting them with successful startup ventures on campus. Incubate now have over one hundred trusted mentors involved within the program, each with their own entrepreneurial background or specialized industry experience. Programs like Mentor Match, a speed networking event where mentors get to chat to each team for 8 minutes in search of the “right match”, ensure that incubating businesses are given the best possible guide.
What if I can’t decide?
Cicada Innovation is Australia’s home of deep tech innovation. Founded in 2000, Cicada is now a globally recognised program-driven Incubator, having worked with more than 300 businesses over the last 19 years. We are thrilled that Cicada’s chief executive officer, Sally-Ann Williams, will be joining us on this month’s Insight panel. What makes Cicada so unique is that they are not just an Accelerator program. As a program-driven Incubator, Cicada provides specialised accelerator programs that then feed into an incubation phase, allowing them to provide long-term support to deep-tech startups. Cicada offer two different accelerator programs; MedLab, a 12-month program for early-stage MedTech founders, and GrowLab, a six-month program which provides a commercialisation pathway or R&D (research and development) based agrifood tech startups. Cicada generally takes 5-6 companies per year per program. After the program, graduating companies are invited to enter the Incubator program for more extended support.
Well, to be frank, the differences between Accelerators and Incubators are relatively minimal. The terms are almost used interchangeably within the industry (which is not to say they’re not different) so if you get them confused, you’re certainly not alone. Either way, there are plenty of options to choose from!