Like in countless other industries, the Covid pandemic forced startup accelerators to digitalize their processes. Being the breeding ground of innovation themselves, it’s only natural that they’re at the forefront of transformation. From the selection process to mentoring, the accelerator landscape is changing fast.
Digitalizing improves efficiency, enables remote participation, gives wider access to resources, and opens doors for startups of all backgrounds and geographical locations. On the other hand, maintaining quality and avoiding hidden biases or other unintended consequences is more crucial than ever.
If done right, digitalizing and automation can be a driver of efficiency, innovation, inclusivity, and impact. But how to do it right? Let’s take a look. In this article, we cover the key areas to automate in startup accelerators, the most common pitfalls to avoid, and best practices to hit the ground running.
What is a startup accelerator?
A startup accelerator is a mentor-based program that provides early-stage startups guidance, support, and limited funding in exchange for equity. The main goal of startup accelerators is to accelerate the growth of startups by giving them the tools and connections to succeed. The program helps founders refine their business models, develop their products or services, and gain traction in the market.
In exchange for the support, accelerators typically take around 5-10% equity in the participating startups. Startup accelerators can be generalists or focus on particular industries, e.g. technology, healthcare, or social impact. The forms of support they offer can also vary from mentorship and coaching to access to investors, networking, and seed funding. All in all, startup accelerators play a crucial role in fostering innovation and supporting early-stage entrepreneurship.
Key areas to digitalize or automate in startup accelerators
Every startup accelerator is different and has different needs. To find the best digital path for your accelerator, you should evaluate both the unique situation of your accelerator as well as the startups you support – or want to support. The rule of thumb for automating any operation is to aim for the low-hanging fruit first, i.e. the high-frequency, low-complexity activities. Here are the most common areas to digitalize in a startup accelerator.
- The application and selection process: an online application portal helps streamline the application submission, review, and feedback processes. You may want to automate the initial screening and evaluation based on predefined criteria. Data analytics and machine learning algorithms can help identify high-potential startups.
- Program management: use project management and collaboration tools for efficient communication and task management.
- Performance tracking and evaluation: automate gathering and analyzing data to gain valuable insights from startups, mentors, and stakeholders. Use the centralized database to monitor important indicators and track the progress of startups going through the program.
- Community management: use an online platform to bring together current and past participants, mentors, and investors for networking and learning opportunities. Use social media and digital marketing strategies to keep the accelerator community informed and engaged.
- Mentorship and guidance: provide a digital platform or online portal for mentors and startups to connect, schedule meetings, collaborate, and exchange resources. Gather all educational materials, best practices, and resources in an online knowledge repository or learning management system. Provide video conferencing and virtual collaboration tools for remote mentoring.
What are the potential pitfalls of digitalizing startup accelerators?
All digital solutions carry certain risks. From data protection to technical defects, it’s better to be cautious and thoughtful in your digitalizing efforts. Thorough preparation, regular monitoring, feedback collection, and continuous improvement help mitigate risks and strike a healthy balance between efficiency and the human touch. Here are the most common risks of digitalizing accelerator operations:
- Handling and safeguarding sensitive data: data protection and compliance with regulations is an ongoing challenge. Make sure you set up security measures like encryption, access controls, and regular data backups. It’s also a good idea to conduct regular audits to identify and address potential vulnerabilities. Also, consider how much sensitive data (especially personal data) you really need in your screening process and does it increase the quality of the evaluation enough to justify the additional strict data handling requirements.
- Keeping the human touch: the era of social distancing soon proved that online never replaces real-life interactions. You need a good mix of both to foster trust, collaboration, and bonding among the participants, mentors, and investors.
- Hidden bias: automated screening or selection processes can foster unintended biases, e.g. due to the design of the algorithm, the way data is presented, the way the algorithm is trained, etc. To make sure your selection process is fair, keep a human eye on the results and regularly review and validate your algorithms.
- Technical challenges: when choosing digital tools and platforms, make sure you understand their technical requirements and limitations. Leave room for technical errors, downtime, and compatibility issues.
- The learning curve for your employees and other users: provide instructions, training, and support for accelerator staff, mentors, and startups. Collect user feedback and adapt accordingly.
- Overreliance on technology: don’t throw human touch and judgment out the window. Digital processes should give accelerator staff and mentors more time and leeway to apply their expertise and insights, not replace them.
How to get started with digitalizing your accelerator?
When embarking on the digitalization journey, it’s important to follow a systematic approach and consider your program's unique needs and goals. We’ve all heard that you should begin with the end in mind. The same applies here. What are you trying to achieve? Do you want to grant access to more startups? Streamline your day-to-day administration to focus on human connection? Widen your mentor pool and make them more accessible? Foster collaboration? Engage external stakeholders?
Assess the needs of your accelerator and the people involved (from employees to mentors and investors) and identify the areas you want to improve. Don’t forget to ask for input from those people. Clearly articulate what you want to achieve and prioritize the activities based on their potential impact and feasibility.
When researching available digital tools, consider their scalability, integration capabilities, ease of use, data security, and ongoing support. Set realistic goals and take it one small manageable step at a time. Be ready to learn, adapt, iterate, and move forward. The same goes for the people involved in your accelerator – offer training and support, and encourage a culture of continuous learning and feedback loops. Stay open and curious, and constantly monitor and evaluate the effectiveness of your tools and the changes you’ve made.
And finally, remember that digitization is an ongoing process. Even if you have one goal in mind today, your accelerator will also change over time. Give yourself grace, be flexible, be willing to adapt, and embrace the journey.