TechStar Brad Feld Discusses Pending Startup Accelerator Bubble - Page 2
If their first companies don’t work, it’s totally fine, because they built… muscle around creating a startup that would take many years and lots more money to create.”
Brad went on to address the issue of a diluted entrepreneur talent pool and its potential impact on the efficacy of new accelerators. “I am not going to say A and B and C players as in expansion baseball, because there is a wide variety of skill sets. It’s taking people that are relatively inexperience, (but) not entirely inexperienced.
Many experienced entrepreneurs choose to go through an accelerator because of the network effect and the dynamics of the mentor help that they get. But it’s people that tend to be entrepreneurs who are early on their company and entrepreneurial arc. It allows them to really accelerate their own development. We like to think that in 90-days, you get two years or three years worth of real, focused effort. Not just in terms of your concentrated effort as an entrepreneur, but because of what you are surrounded with.”
TechStars has expanded beyond its home base of Boulder, establishing regional chapters in Boston, Seattle and New York. In addition, it is accelerating accelerators in a number of regions by affiliating with third-party accelerators worldwide.
Given TechStars’ “expansion league” strategy, I was curious as to Brad’s thoughts regarding the various saturation points of regional markets. For instance, in Los Angeles, there are currently 23 accelerators, incubators and co-location facilities, as documented in Ben Kuo’s recent SoCalTech series. As Ben points out, many of these organizations were formed within the last 12-months. “The goal of an accelerator is to get companies funded with seed financing. It makes a higher-quality company…the investors that are around the accelerator have a better choice of companies. Could you have a thousand companies a year going through accelerators? Sure. Could you have ten thousand? There is some limit, but I don’t feel like we’re there.
In a big city like LA, could you have four or five (accelerators)? Sure. In a small town like Boulder could you have four or five? Probably not. You get saturation that is different, by geography.”
Given the rash of accelerators and incubators in LA, differentiation and market segmentation has emerged. According to Sam Teller, LaunchPad LA’s Managing Director, “At Launchpad LA, we have two parallel goals that are often intertwined. First, to marshal our deep network and experience to help an exceptional group of LA startups grow their businesses and gain third-party validation from customers, partners, and investors. Second, to establish a physical hub for the LA startup ecosystem by opening our offices not just to entrepreneurs, but to mentors, investors, advisors, and other startups who we hope will benefit from our events and educational programming.”Continued on the next page