Operant Innovations 017 | Incubators & Accelerators
Have you ever thought about starting your own business? Have you wondered where you would get funding from? Join Annie Escalante, the Co-Founder, and Chief Behavioral Officer, from BehaviorMe as she dives into Incubators & Accelerators and how BehaviorMe jumped at this opportunity!
Learn more about Virtual Reality and BehaviorMe at https://behaviorme.co/
Annie Escalante (00:05):
Hello everyone. My name is Annie Escalante and I'm a behavior analyst and I'm also a co-founder for a company called BehaviorMe where we create virtual reality hiring and training simulations for the caring fields, starting with behavior analysis. Today, I would like to discuss the differences between startup accelerators and incubators and why behavior scientists may consider this route in ideating, developing and possibly funding a company.
So let's say you've had a startup idea that you've been nurturing for some time. Be it may something within the realms of behavior analysis or something outside of the field. And let's say you want to grow this idea to an actual product or service. Well, you're just in luck because by the end of this episode, you will have learned a bit more on the boons and benefits of startup incubators and accelerators. How to find the right one for your entrepreneurial dream and a step-by-step guide to joining an incubator or accelerator. At BehaviorMe, we've been very fortunate and lucky to have participated in a few incubators and accelerators.
My co-founder and I are currently, at least as of 2020, the entrepreneurs and residents for one of the accelerator programs we've completed called Boost VC. These are incredible playgrounds for ideas and collaboration across fields and methodologies in product development. But these labels, incubators and accelerators, can seem a bit startup "buzz-termy" and may deter folks from pursuing this line of startup development. So let's break down the major features of an incubator and accelerator. Incubators are meant for founders to formulate their initial ideas, products, and services.
True to its name, this is where a startup can safely pursue their idea, probe to see if they have product market fit. In other words, discover consumer wants and needs, your product or service and create their minimal viable product after researching and iterating upon their initial idea. And it's all conducted within the safety of the incubator. It's typical for founders to pivot or iterate upon their initial idea during this portion of the startup journey.
Incubators provide you with an environment where you can explore these potential pivots in the company, all with other startup founders, varying levels of experience. Incubators can be agnostic of location. Some are held in person while others can be remote. Thoughts: One of the biggest boons for an early stage startup is to work amongst other founding teams. Being able to model and have appropriate startup work modeled for you. And more importantly, have insightful and meaningful discussion after hours with other startup founders.
Some of those cross disciplinary conversations can truly provide insight and perspective into what you're working on and provide you with ideas on how to improve and provide value to your clients and customers. Some incubators provide a coworking space where founders are able to work together within a location to pursue their ideas and innovations. Many incubators provide founders with networking opportunities, seminars, and workshops, and sometimes even lecture series on a number of topics such as product market fits leadership, UI, UX design, product testing, and even fundraising.
Typically you either pay for your startup seat within an incubator, or you may be lucky to find an incubator that provides some funding for your startup. And essentially lets you work within the incubator space for "quote, unquote" free. Some are time bound, but most allow you to work within the incubator space as long as you pay for your seat. For those still in school, please know that there are some business and entrepreneurial departments within universities that offer incubator workspace for free. Funny enough, my company, BehaviorMe, actually started out in an incubator. Thank you, Gators. I can safely vouch for those helpful and mostly free entrepreneurial route. Accelerators, on the other hand, provide founders with an intensive path of growing and building your company. These programs tend to be very intensive, initially competitive and absolutely rewarding in the long run. Many large scale companies have gone down this route. Companies such as Uber, AirBnB and Reddit.
Accelerators tend to be timed out. Many are as short as 12 weeks while some others can be as long as six months and many startups require their founding team to relocate to the accelerator location, but more and more moving towards a more remote option. Typically accelerators offer some initial funding in exchange for equity, and this can vary depending on the accelerator. Also, the location of where the accelerator currently is in so that contacts. Also, whether they fund pre-seed or offer seed offerings and also what their funding philosophy is. You may have accelerators that give their portfolio companies safe or convertible notes or convertible debt.
Accelerators can be very involved with their assertive programming. They may provide you access to intensive weekly course where entrepreneurship, leadership training, legal advice sessions, and even financial advice sessions. Some of the program can be mandatory while other accelerators can be a bit looser with this aspect of the program. One of the major boons to accelerator programs are the mentors you find within the programs themselves. Mentor matching days are always a fun and intensive day of "quote unquote" mentor speed dating. Where you're paired with multiple possible mentors. You basically pitch your sort of idea to a possible mentor and they pitch to you the value that they can provide you as a possible mentor. After the mentor matching you are paired with mentors who wanted to work with you and who you wanted to work with.
One of the more meaningful aspects of accelerator programs are the goals and the KPIs or key performance indicators that you and the managing partners from the accelerator create for your company during your time within the accelerator. These KPIs are typically objectively defined. Time-bound. Specific in graft. These KPIs are smaller, easier to obtain objectives towards your overarching company goals. Typically, you would share your progress and your metrics with your fellow accelerator teams during a weekly, all hands on deck meeting. These intensive programs tend to breed very close friendships with other founders and teams. Well, imagine you're in essentially a startup bootcamp that almost feels like you're enrolled within an entrepreneurship Master's program or in business school. You will spend long nights at the accelerator alongside your fellow founders and well, this leads to incredible cross-collaboration advice and very tight bonds.
Now, all of these tasks, activities, and objectives, well, they all lead towards the grand finale for most accelerator programs: Demo day. This is a day where each startup founding team pitch their company, product or service to a crowd of potential investors and the startup community. It's a major event and an investor accelerator program, and an important moment of validation for the startup team. Post the event, you may have a booth or startup teams will have the opportunity to showcase their product to investors, answer any lingering questions they may have concerning the company and plant the seed for potential relationships with set investors. So in a nutshell, incubators are where you go to formulate an idea while accelerators are where you go to build and grow your business into a viable company.
Now that we've covered the relevant features of both incubators and accelerators, let's discuss how to join these helpful startup programs. Here is a step-by-step guide for you to join a relevant incubator or accelerator. Step one: choose between an incubator or an accelerator. These programs are very helpful, but you should pick a program that is suited to your current company needs. If you're a student, there are a few university departments where you can access incubator services and programming for free.
Step two: do your research. There are so many incubator and accelerator programs to choose from. So many in fact that it can actually become overwhelming. When searching for programs look and see who were some of the graduating companies and startups on your short list of potential programs. Do a deep dive into the accelerator or incubator's mission statement and investor philosophy. Seeing what the managing partners of these programs have done in the past. Look over their LinkedIn and take note of any questions or concerns you may have. Make sure if the program is an in vivo program or a hybrid program or a remote program. If you need to move even temporarily, consider what are the risks and benefits of this move? Is the location of the program worth the move? Will I be closer to customers or potential mentors to a possible potential investor? Is the ecosystem within this environment worth this move?
Step three: once you've narrowed down your search, reach out to a company founder who completed the incubator or accelerator program that you're investigating. You would be surprised by how willing startup founders are when discussing their startup journeys. For many startups, these programs were a great starting point in their company's history. And many founders will gladly talk about the pros and cons of specific programs over others.
Step four: application. Many incubators and most, if not all, accelerators require startup teams to complete an extensive application process. This process reviews the company history, founder history and briefly discusses the value your team provides or will provide to your target audience. Many programs require a video of the founding team discussing their product or service. And here's a tip: Make sure your video is exciting. Many incubators and accelerators are taking a chance on the team and not solely on the product or company. You need to sell your company vision and mission in a way that is likable and approachable. Imagine these folks are essentially choosing who they're going to interact and support with the next few months and sometimes even years. So if you show that you can pair well with the incubator or accelerator managing team, this will essentially give you a leg up over other server teams.
Step five: The interview. Many incubators and accelerators will schedule either an initial interview or multiple interviews to see if you're a good fit for the program. This is where your pairing skills come in handy and where you will need to be able to disseminate your product and company in an easy and enthusiastic manner.
Step six: Company updates. As you wait for your acceptance or rejection email, send the managing partners of the program an email company update. I've had one of my past investors tell me the following: "The initial interview is simply one data point, and I want to be able to have multiple data points, to make a better informed decision on whether to accept you and your team into the program." This was incredible insight and something I consider whenever I send out company updates to potential investors and other folks who are interested in our company and product. So how does this look in practice?
I can tell you about my perspective and my contacts, although it's only an end of one, but I can tell you about the behavior needs experienced with one of our favorite accelerator programs that we've been lucky to participate in: Boost VC. At BehaviorMe, we did our due diligence and conducted quite a bit of research on different incubator and accelerator programs. We were at a point in our business where we needed to grow our company. So we specifically sought accelerator programs to scale our business and service offering. We look specifically for accelerator programs that focus on VR or emerging technology.
We were also looking to relocate to a more tech driven ecosystem, such as the Bay area. Our search narrowed down to a few potential accelerators and we submitted applications to a few programs that aligned with our core vision. We also filmed a video showcasing the founding team and our mission and vision for the company. This eventually led to an interview where we spoke to the managing partners from varied accelerators and we discussed the pros and cons of the company and answered any lingering questions that they had concerning the team and the startup itself. During the initial selection process, we emailed our updates and provided their programming team with more information and data to base their eventual decision, to take a chance on a small virtual reality company, an ABA startup from Florida and the rest is history. We love this accelerator ecosystem so much that my founding team and I are currently the entrepreneurs and residents for Boost VC accelerator.
We help support startups who recently were accepted into the accelerator program and guide them through the initial startup journey. So whether you have an idea for a startup, product or service that may bring value to a potential target audience, or you have a fresh thought idea and need initial support and important mentorship and maybe some initial investment. Incubators and accelerators are a route that we, as behaviorists should consider.