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l’m not a fan of  top-10 lists or blog posts like “5 easy ways to become a success“, but a recent article, 10 Lessons Learned In an Incubator – Entrepreneur Stories  gets it right – except that the author, most likely, is referring to accelerators and not incubators.  There is definitely a difference – notably that incubators are usually the ones that charge rent, while accelerators usually offer some form of funding and are decidedly very short term affairs for startups.

Cherry picking the through the 10 Lessons,  here are some of the most unique lessons that of being part of a startup accelerator/program gives entrepreneurs:

How to Identify Your Strengths

By “strengths” I don’t mean a personal inventory of the  entrepreneur’s personal strengths and weaknesses.  Accelerators, in part because of  being very collaborative and participatory, allow the startup to go through a filtering and vetting process where they can discover what the company is really good at doing – not just what they think they are good at doing, or what they want to be good at doing.  For instance – a startup may enter an accelerator with solid game design and coding skills, but after several intense encounters with peers, mentors and investors, they evolve to realize their unique strength is not in game development but helping companies make their marketing programs fun for their customers.

 

Put Your Name Out There…Now!

Did you ever notice that you hear of many great startup ventures on the basis of their entrance into an accelerator program -rather than when they exit?  So much buzz is generated based on a great demo, and that they have been accepted to the program – often  before they have a product or a customer.  It’s  dotcom-like in nature.   Startups soon learn that having investor and customer interest very early on is an important strategic move.   And unlike the negative connotations of the dotcom era, startups of the current age understand that getting your name out there early can help them get their product and markets spot-on before they spend a lot of time and money.   And just as important, this initial buzz can keep investors and customers in the loop early and often, making the fundraising and sales process that much easier when the time comes.

 

Post-Mortem analysis of your failures

Unique to accelerator programs (and many university Entrepreneurship programs) – there is a relatively short cycle of concept-to-product, or to product-to-market validation.  It’s usually a matter of a few months or even a few weeks.   The implication is that these programs is that startups are doing “intensive experiments” in entrepreneurship.   Failure is an option.  While this sounds like a phrase that should never be uttered or even considered – it is accurate.   The mindset going into one of these programs is “This is going to be intense, and we hope to hit a grand slam.  But we’re are taking risks and testing assumptions, and it is an experiment.   If we fail, we will have learned a hundred new lessons, and be even more likely to succeed the next time.”

This new mindset is almost always healthy and constructive, but it used to be a painful and expensive lesson.  Accelerator programs make the lessons from failure quick, and relatively cheap.   Accelerator programs almost always have informal and formal mechanisms for providing entrepreneurs specific feedback on what went wrong (and right) – so they can dive in and do it better next time.   The short cycle of most accelerator programs seems to make postmortems easy.  And since it’s only a few weeks, entrepreneurs can dive in again with new knowledge (and contacts and skills), without the trauma of a long and drawn out failure.

 

Lessons for entrepreneurs are everywhere (particularly in the top 10 lists around the web) – and entrepreneurs don’t have to participate in accelerator programs to learn these lessons.   While many entrepreneurial lessons are universal for all those diving in for the fist time – accelerators allow entrepreneurs to make new mistakes and learn new lessons that often can’t be found in articles and books.   How so?  For instance: A new mobile startup embarks on one of those 3 month programs to prototype and test a brand new way of letting customers schedule and pay for haircuts.   Very likely, there are no existing rules for success yet.  During the intensive 3 month acceleration process, the company may fail  – as in ‘fail to launch’, ‘fail to attract customers, or ‘fail to find a business model’ – but after it is over, the entrepreneur can say “we tried to pioneer mobile haircut payments using this approach, and here is what we learned.”   For venture investors, one of the top attributes of attractive startups is the unique, in-depth domain experience of the founders.  And most founders would agree that the lessons, and new experience, is well worth the pain, since it made them better entrepreneurs.

 

 

 

 

 

 

 

Arizona No. 1 for startups, Kauffman study finds

Arizona had the highest entrepreneurial activity rate of any state last year, according to new research from the Kauffman Foundation.

– Phoenix Business Journal

Definitely worth of a major shout-out

When I arrived in Arizona 4 years ago to help them build their entrepreneurship program, I had already spent over 15 years in Silicon Valley – the mecca for entrepreneurship (and venture capital). Needless to say I was cynical and underwhelmed by the scope and quality of the entrepreneurial community, but I wasn’t surprised or disappointed. Most areas outside of the “big 3” (Silicon Valley, NY, Boston) or the up-and-coming-3 (Denver, Austin, LA) lack the culture, critical mass or role models to sustain a vibrant entrepreneurial community. Phoenix was no different, and it wasn’t the fault of the entrepreneurs or other talented would-be entrepreneurs. Again, without a critical mass of role models (successful entrepreneurs), supporting companies, capital and a culture of risk and innovation – it just doesn’t happen. But it did happen in Arizona- particularly in the Phoenix metro area. After 4 years, we hit the top spot in the country for entrepreneurial activity. It wasn’t due to any one silver bullet. It was a combination of simultaneous and independent efforts by many individuals and institutions, all committed to stimulating entrepreneurship in the region. Some of the efforts were predictable – other regions have used similar techniques and failed. If these efforts weren’t buoyed by other activities and other individuals, they might have fizzled in Arizona too. But the synergy worked, and continues to work – primarily due to these influences:

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