As global incubator and accelerator programs open their doors for applications for 2019, there is increased focus on the value and success rate of these programs.
But the reason for this failure rate is pretty clear: the key calculation - lifetime value of the customer divided by the customer acquisition cost (or LTV/CAC) - has to be enormous for any startup to be able to scale. So startups need to have the lowest possible onboarding cost to be truly successful.
One of the best ways to minimise onboarding costs is to find one corporate customer that can give you access to their own (large) customer base. This usually requires an account-based marketing approach, and goes against what so many accelerator and incubator advisers will tell startups to do.
The issue here is a design flaw in the way that incubators and accelerators usually operate. Instead of focusing on problems worth solving in a corporate context, the programs are just auditioning a range of teams and ideas for entry. It’s a scattergun approach, not a targeted innovation design plan. It’s not the startups that are the problem, as such. It’s a program design flaw. And it’s not going to be fixed until program leads do the hard work to establish the problems worth solving and the innovation opportunities for any business.
There’s nothing wrong with using accelerator and incubator programs as a kind of imaginarium, where B2C products can be floated, built and tested. But if you are measuring success by growth and profitability, then an accelerator that is actually addressing issues in your business makes much more sense than an unfocused innovation program.
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about how we can help you build a program that will incubate solutions with a solid business case, rather than a wing and a prayer for success.