Hackernoon logoPicking a Niche for Your Accelerator by@Outset_Data

Picking a Niche for Your Accelerator

Why it Really Matters?

In the beginning of accelerators, the idea was to get startups to more funding. The way you got to more funding was putting together a crack team (on paper at least) and delivering a polished pitch. This worked well for the early accelerators, the startups they accelerated and the ecosystems they operated in. Now we see multiple accelerators in most MSAs, dozens of startups coming out of each of them, along with hundreds of “non-accelerated” startups and roughly the same number of angel investors as before all within a single ecosystem. This makes the fundraising landscape much more competitive on an ecosystem by ecosystem basis.

  1. Accelerators must have capital to fund companies, which in large part, comes from the angel investors within the ecosystem.
  2. Companies coming out of accelerators must have capital from angel investors within the ecosystem.
  3. Startups outside of the accelerator system must also have capital from angel investors in the ecosystem.

While there maybe a few more angel dollars and investors available within that ecosystem, there is not much more bandwidth in these ecosystems for angel investors to invest in even more companies.

With so many accelerators and startups chasing limited dollars, the focus of accelerators has had to shift. All accelerators understand the need for startups to raise additional capital, but the best accelerators understand that in order to raise that capital companies must be even further along in their lifecycle than before. This is why we are seeing more and more accelerators focus on helping startups obtain customers as opposed to presenting a polished pitch. When the focus becomes customer centric for accelerators and their startups some major shifts begin to happen.

Relationships and partnerships with industry players must begin to get built. It’s time consuming to establish these relationships within a single industry. Corporations that partner with startups need to know that the startup at least has a fighting chance of being around in 5–10 years. They can’t take a gamble on a bunch of companies that simply represent darts being thrown at the board. If you’re approaching corporations in the hopes of them being a pilot customer for some of your companies or a sponsor of your accelerator, you better damn well make sure you are focused and sold out on the industry’s success.

The only way to do this is to maintain an industry focus and make it your mission, not to make your companies successful, but to make the industry more successful.

Now, if you have an accelerator focused strictly on EdTech and all that operations team does is figure out how to make the EdTech industry great, suddenly corporate partners or even municipal partners become interested. They know you, the accelerator, are sold out on the industry’s success. They know you are interested in making EdTech great, not just pushing a bunch of companies through and hoping some of them stick. Do you see the difference here? This literally changes the way accelerators are run.

  1. It gives operations an inside track to what the industry needs.
  2. It creates loyal fans that have the means & motivation to help
  3. It helps you know what companies or ideas are most valuable, thereby making your selection process easier & more efficient

Picking a niche is vitally important for accelerators today. Polished pitches don’t work anymore. The proof is in the traction and the best way you can help your companies create traction is by knowing a single industry so well that you can literally pick up the phone and help them close deals. You accomplish this by caring deeply about an industry, creating connections within that industry and helping that industry succeed.

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