Myth Buster- Start-up Accelerators in India
Curious founders, a tad-bit circumspective and having a deep desire of prevailing in the entrepreneurial circuit, predated by it’s myriad of ‘hydra-like’ problems. At one point they all realize, that they’re just jousting for a slice of the pie with the competition instead of doing what they earlier had set out to do. That is, creating a better product or solving a problems through service; you know, the kind of stuff that separates ‘One from the Horde’! And also that this flashy-new concept of startup accelerators, shipped straight from the US through HMS Globalization. And to top that, a slight decrease in the overseas investment trends in Indian markets. Life is becoming a nightmare for some of these startups struggling to bridge the big gap between expectations and reality. But this is exactly where the accelerator programs come into play, guiding and mentoring founders towards the path of glory! Sounds simple, however the ‘accelerator culture’ is still very novel and wrought with myths.
According to prominent authorities familiar with the accelerators operating in the country; Founders approaching an accelerator are not simply clear in their own minds on what to exactly expect out from such a program. And also choosing the ideal program is something that they’ve struggled with in the past. From an entrepreneur’s or the founder’s point of view, it is important to understand that an accelerator will ‘merely’ be a custodian of the business idea, and that it does not inherit the business ‘itself.’ So to start about it, let's bust a few myths and clear the picture a little concerning accelerator programs in the country -
Myth 1: The biggest one, Accelerators are a stepping stone to startups.
Well, Take it this way, the smartest founders are more interested in actionable things, the ideas that will help their business grow. Startup accelerators basically ensure three working parameters; Creating better products that receive acceptance within the industry, ensuring the startup’s access to market, and connecting them with investors as and when required. They’re hardly a stepping stone, rather should be considered as a ‘magical herb’ that will help you along the way! Perhaps it boils down to the entrepreneurial mindset and that how much are founders willing to be coached! The larger goals and values must be coherent for a long-term successful business relationship between the two. Sounds like a two-way street.
Myth 2: Top of the line Accelerators are yet to come to India
It is true that India does not have good accelerator programs that operate at the same scale and predictably improve odds of success of startups as some of the global ones. Statistics support this as well; One in 10 startups in the US receives support from an accelerator. Among the ones that receive investment, one in three startups has an accelerator, and that this ratio is abysmally low for India! Having said that, there are several new models and platforms emerging and choice for founders is growing. Furthermore, a quality gap that needs to be plugged is that of operational mentorship, the knack of ‘getting your hands dirty’ that has eluded the accelerators in the country.
Myth 3: The benefits of the program aren’t clearly outlined by the accelerator.
Well, to be honest the tasks at hand are solved through a mix of codified and contextual knowledge, hence results could be vary. However, as the focus is on scaling up and building a better product that can a acquire a decent chunk of market; Accelerator programs are actually an investment vehicle with long-run aims. For any ambitious founder, they should demand 3 outcomes — what is the acceleration and business growth, what is the exit momentum and whether they hit their important milestones, including funding.
Myth 4: Accelerator Programs are only for Newbies, Revenue-generating startup don't need any!
Early revenues can be misleading. As most venture investors will vouch, the search is not for early revenues but early proof of scale. On an average fifty percent of startups under the stewardship of prominent accelerator programs in the country were at the time of admission, generating revenues to the tune of 2–7 lacs per month. In reality, the potential for refining the product and finding the right market fit by associating with an accelerator are huge. And with the government taking on a more active role as a client, plus the opening up of ‘digital markets’ deep in the country for vernacular modes; There is massive potential for the future growth of startups, in spite of a recent downward trend in the number of seed deeds.
Myth 5: Accelerators best suit Startups still in their Ideation Stages, with young and inexperienced Founders
Not exactly a myth per se, as young startups generally fare better than the seasoned ones under an accelerator program, at calibrating their business as and when deemed fit. Even the traditional thinking in foreign markets tends to be in line with ours, that of eyeing accelerators as best suited for young startups. However, there is no set definited gestation period for successfully transforming an idea into a product having mass appeal. For generating real investor interest, startups need acceleration which is all the more suitable to attain in its early stages of traction.