A new accelerator report suggests that independent work is most effective
Today, a $2.3 million private-public partnership called the Global Accelerator Learning Initiative (GALI) is releasing its first major report, in collaboration with Village Capital, a seed-stage accelerator that operates development programs for early-stage entrepreneurs around the world.
Led by the Aspen Network of Development Entrepreneurs (ANDE), the goal of GALI is to determine how effective accelerator programs really are and how to develop best practices in different regions, given there are roughly 500 now dotting the globe.
In fact, one of the biggest questions it is trying to address is whether accelerators work as well for developing-world entrepreneurs as they do for those in the developed world.
In ways, it’s a little soon to be releasing anything. GALI, whose new report examines 15 Village Capital programs, is just nine months in the making. Though it’s an interesting data set — the report examines the performance of entrepreneurs who were enrolled in those Village Capital programs from 2013 to 2014 against those who applied but were not accepted — it’s a very limited one.
Still, it claims to see some signals that might help entrepreneurs who are weighing whether or where to join an accelerator. For one thing, it says that participants in the Village Capital program saw outside investment that dwarfed those of rejected entrepreneurs — by eight times.
In a call last week, Randall Kempner, the executive director of ANDE, said researchers weren’t yet sure if that disparity owes to better entrepreneurs being accepted by Village Capital; by entrepreneurs creating better companies because of their learnings at Village Capital; or whether by working with Village Capital, the entrepreneurs enjoyed a halo effect from its brand, thus making it easier to attract outside funding.
The report also finds some interesting programmatic differences between the highest versus the lowest-performing Village Capital programs, including that the highest-performing programs emphasized more time for independent work. Specifically, says the report, the percentage of time spent working on-site or remotely with other entrepreneurs or mentors in the program (versus time when the founders work on their own) was 53 percent of the time for the highest-performing program, versus 83 percent for the low-performing programs.
In another potentially interesting twist, the report says that Village Capital’s highest-performing programs spent less time working on finance, accounting, and formal business plan development and more time on presentation and communication skills, networking, and organization structure and design, suggesting it makes sense to spend more time on softer skills.
The reports’ authors acknowledge that the study they’re releasing today is far from conclusive. In fact, it features as many predictions as it does findings.
But certainly, its effort is worth watching. As explains Saurabh Lall, research director at ANDE and one of the report’s lead authors, “There’s been a tremendous proliferation of accelerators and incubators around the world, but while exciting, we’re concerned that we don’t have a good sense of whether they do a good job at supporting entrepreneurs in emerging markets. From our perspective, [this work] intends to help us answer: do they work, under which circumstances, and which programs are more likely to work for certain entrepreneurial segments.”
“We want to be truth tellers,” adds Kempner. “There hasn’t been nearly enough research done in this space, so a lot of people can say a lot of things that may or may not be true. We think we’ll eventually have enough information that we will.”
For much more, you can view both an executive summary as well as the full report right here.
Photo above: Monterrey, Mexico, site of one of Village Capital’s programs