Today, all entrepreneurs are hearing the word “startup”. In the Internet industry, there was a real “boom” of fast-growing IT projects: each author of a business idea tries to develop it in such a way as to launch another “startup” and make it famous around the world. Some really manage to achieve success in this area due to the novelty and originality of their ideas. For others, in order to succeed in the startup market, it is necessary to continue to work hard, attracting the attention of potential buyers and continuing to search for project financing.
However, some of the difficulties can be addressed by the business accelerator who accepted the project. Read about how such companies work and why they exist, read in our article.
New business industry
It is impossible not to say that with the last wave of growth in the popularity of the IT sector, a whole mass of some new areas of activity appeared, new niches that allow you to start your own business. If 5-10 years ago we couldn’t even think that we would replace the classical terms in business with Western “start-up”, “angel”, and “business accelerator”, today these categories are becoming more widely used. Of course, Western culture plays an important role in this, as well as the spirit of entrepreneurship coming from the United States along with fashionable technological innovations.
Inspired by the spirit of success, all of these terms also fell into Russian usage. At the expense of them, we all are now trying to realize our business idea in the form of a profit-making startup. And if earlier this word meant a new application, an online service or any site; Now, a startup can also be an offline business. This word is so ingrained in our business environment.
Be that as it may, but newfangled businessmen, as at all other times, have the same problems: a lack of knowledge, capital and resources in order to properly conduct their business. This is especially true for beginners in the enterprise industry, who have only an idea and ambitions focused on success. They tried to deal with these problems in different ways, but today, as practice shows, one of the most effective ways is a business accelerator. What is it - read on.
General concept
Once upon a time there were very few companies working in the IT industry and having grandiose plans. This is explained by the fact that all this happened at the very dawn of the development of the Internet and the computer industry. Nobody, for example, believed that the founders of the world's largest companies such as Google, Microsoft, Apple, and the like, would be able to change the entire business industry so radically, conquering its top. No one would have thought that they would be guided by millions of people around the world who want to start their own business. However, these times have passed.
Today, after seeing how all these and hundreds of other major initiatives that have become successful have developed, tens of thousands of other startups are marking at the very top of their niche. Their founders believe that with the help of their idea they can become extremely successful in a short period of time, so all they need for this is additional funding. It can provide them with a business accelerator.
Concept
The existence of organizations that are engaged in “acceleration” is determined by the specifics of the market. To give a simple example: imagine that there is a young company that has the idea of creating some kind of service.Of course, they don’t have enough money to launch such a project loudly, since the development team includes poor students who are unable to invest large amounts of money. However, the idea is worthwhile - and if implemented, the company could become successful in its niche. This is one problem that exists on the part of the authors.
On the other hand, there is an organization with a large stock of capital (say, investment fund), which does not release its ideas, although it has rich experience in business.
As you probably already guessed, only a combination of these two companies will give a fruitful result. This is (in the simplified version) the principle by which the business incubator / business accelerator and the startup author / development team work.
purpose
Of course, if a business accelerator (the value of which is how much it can help the authors of the project financially and theoretically) takes another startup under its “wing”, for the authors of the latter this may mean the first step to success. Often people who have started working on the implementation of another idea simply do not have the money or the knowledge to successfully complete it. All they have is team cohesion, an idea and a desire to work.
Business accelerators (Russia, the USA - it doesn’t matter), on the contrary, have everything that novice startups lack. Therefore, they provide them with these resources, conducting trainings and trainings, helping with a business plan and hiring specialists, giving them the opportunity to work in their office premises with their equipment. Sometimes such companies even pay the authors of the project a kind of salary, so that they have the opportunity to completely concentrate on their idea.
Remuneration
Of course, all this is not done for free. All business accelerators in Moscow (as well as in any other city) have their commercial interest in making the project successful and entering the market. In particular, this interest is expressed in a certain share in the company.
Thus, the more popular, popular and profitable a startup becomes, the more the business accelerator itself will earn. Initial financing in the form of some kind of “pocket money” for the authors, office space and practical assistance are in the role of investment. Without them, the project team would most likely not have succeeded; or the product would develop much more slowly, gradually expanding its customer base and market share.
Selection
Now, it might seem that working with an accelerator is the perfect solution for a startup owner. To some extent, this is really a welcome path for many entrepreneurs. Indeed, in this case, the author is provided with some preferences and financial assistance aimed at developing the project and making it more successful.
At the same time, in practice, not everything is so sweet. Getting into the field of view of the accelerator, being the author of an idea (or a young project) is very difficult. After all, it is not enough to have an interesting, profitable, at first glance, concept of developing your product, which, possibly, will bring income. The value that every business accelerator has is reputation. This means that they cannot “grab” for each company, simply losing their money. Most accelerators have strict selection criteria, according to which it can be said how realistic a startup will be in entering the market and its success.
What is most interesting: the service itself is not evaluated as closely as its developers. It is the analysis of the team, its mood, skills and composition that play a role, determining whether the startup will be funded or not.
Given the credibility of some accelerators, their opinion on a particular startup can be taken into account by other investors. In particular, a platform such as Y-Combinator (which used to work with very successful projects) can be a real indicator of success or failure, which investors are looking at.If you were told “Yes” here, then you will hear the same answer in the future. However, to get into this company, you need to get at least 25 recommendations from respected experts.
Story
By the way, since we are talking about such a world-famous structure as Y-Combinator, it should be noted that with its help services such as DropBox and Reddit entered the world. Without them, it would be impossible to imagine hundreds of other resources that are in great demand today.
As for the accelerator industry as a whole, its inception began even earlier. As open Internet sources testify, back in the period of the “dotcoms” (lasted in the late 90s and early 2000s), there were some funds that generously invested in certain companies. However, the ensuing crisis slightly corrected the plans of the accelerators of those times, which hit the industry a lot.
Therefore, only 2005 can be considered successful: then Y-Combinator (a business accelerator, the history of which is described a little higher) was launched in the version that we know about. The concept of his activity was as follows: the participants were offered three-month courses, with the help of which they could get the missing information in the field of business and technology. Of course, the plus of such events is not only knowledge, but also in acquiring new acquaintances by people who have similar views.
After the “Combinator” gained popularity, a large number (3-4 hundreds) of new incubators and accelerators arose. Thousands of projects began to pass through them in flow mode, some of which really became successful.
Accelerator or incubator?
By the way, some do not know how the accelerator differs from the incubator. It must be emphasized that the former has a more commercial character, in contrast to the latter. After all, an incubator is a mechanism for the implementation of a more socially significant project, which will be useful to many. At the same time, a business accelerator (the history of the approach has already been described) is a commercial enterprise that buys out the share of the founders of the company in order to be able to earn on its growth in the future.
Russian experience
Do not think that today startups are created exclusively abroad. No, in our country there is also a huge number of successful projects that deserve help in the work. In some cases, it stands out if they are assisted by business accelerators in Moscow (for example, the Internet Initiatives Development Fund, Generation S, API Moscow, Fast Lane, Pulsar Ventures and others). What is most interesting: if you look at the portfolio of these companies, it includes dozens of interesting services, stores, applications and other projects released by the Russians. Let's hope that all these and many other technological innovations will once be the property of our country due to their relevance in world markets.
Today you can familiarize yourself with startups that have been “raised” with the help of accelerators. Some of them really boast some results; others are at the stages of development and verification, which is why it is not so interesting to characterize them.
Nevertheless, if over all these years the use of such a concept as “business accelerator” (whose work models are very simple, but at the same time very effective in business) has become many times more frequent, then we can testify that that the interest of young and talented people in our country is also increasing in such niches. And this can only mean that in the future we will see more new products in the world of business and technology.
To authors of projects
Such a form of receiving funds as a business accelerator (the features of which we have already discussed) implies an interesting idea for many, and at the same time, a successful idea that will pass successful testing in practice. If you think that you have just such a thing, try experimenting with it in practice. Launch a small website where the idea will be described.Create a prototype. Ask questions to your potential customers.
Conduct a study that can confirm or completely refute the possibility of the existence of your idea. And in the event that you really see the potential, start working harder. Create a team, develop tools, think about a concept - and everything that accelerators are looking for in young startups will be concentrated in your project.
findings
So, what can be said as a result of what constitutes a business accelerator? The features of the model of his work are to select a really worthwhile product and invest in it those resources, those funds that will be recouped in the future due to the multiple growth of the project capitalization, through its entry into the market and gaining popularity.
The very existence of accelerators is a very positive moment in the business industry. It proves that everyone who has a vision of some unique technology, mechanism or project can create something of their own. Moreover, a person can count on help if he is ready to share. If all this is about you, and you are confident in your desire to work on the product, develop it and fully devote yourself to this business, you can also try. In fact, to start cooperation with such a company, you do not need so much. The main thing is that your “investors” see how ready you (as a person) are for the glory of the product, for the difficulties that arise during the work; and how developed are your business skills. Everything else will follow.
You should not think about the fact that Google-level projects turn to accelerators, and you simply have nothing to offer them. This is completely wrong. The whole model of interaction according to this scheme is based on the fact that one link in this chain (project owners) is newcomers who need the help of mentors (more experienced and smart specialists in the key of their niche). Because of this, each of us has a chance that we will be accepted into the accelerator. The main thing is to adequately present your project, not to worry and not worry. And in the event that you worthily go through all the stages of selection, you will be taught many useful skills that are sure to be needed in any situation.
Good luck to you and your project! And remember: it’s never too late to realize your dream!