There’s never been a better time to be involved in a startup. Entrepreneurs are hailed as celebrities with televisions shows and magazines that are followed by devoted wannabe entrepreneurs. Organizations from universities to hospitals, governments to corporations are also caught up in the lure of the entrepreneur, and want to capitalize on the potentially commercial ideas coming out of their organizations.

As a serial entrepreneur and angel investor myself, I’ve seen this focus on commercialization spawn a plethora of accelerator programs that culminate in a Demo Day pitch event for investors. What I’ve seen in this new world of “Startup Nirvana” is a whole lot of companies that have been motivated to join and/or pay for accelerator programs that polish their technologies for a pitch competition and a chance to raise tens or even hundreds of thousands of dollar

The failure we must correct is the lack of focus on developing true startup management talent.

It’s feels as though anyone who has an idea that might be commercially successful, is assumed to also have the skills to execute and grow the business. We need to renew our focus on enriching the local talent pool – and not through the cliché “mentoring” or “boot camp” programs that currently go hand in hand with the start up ecosystem. Instead we need a focus on developing appropriately skilled entrepreneurs who can start companies and/or lead a talented team of entrepreneurs that will make businesses sustainable and scalable.

Paradoxically, the popularity of accelerator programs that spit out shiny new Technology Company’s every 12 weeks may threaten the success of more mature startup technology companies; companies whose management teams understand the real market challenges they face. The visibility of “unicorn” startups that generate billions in returns to early investors have too many in our community focusing on that amazing new technology that promises to be the next big thing. This concept is further promoted by those who quote “the numbers”; those investors who claim they rely on 1 big exit to cover the losses for their other 10 startup investments that failed.

Instead of polishing the patina (pitch) of 10-20 newly minted startups, I think accelerator programs would do a greater service to investors by polishing the skills and augmenting the talent of the startup management teams. We’ve all heard investors talk about betting on the jockey over the horse, yet these programs are created more to improve the creation and seed funding of startup companies not build a management team that is capable of executing on building a scalable business.

Creating a startup enterprise that has the potential to be fundable absolutely requires a management team to be matched with a technology, that together has the potential to create profitable sales of at least $50M in 5 years.

Accomplishing this requires a founding team that is coachable and either has or can attract a management team with the intellectual capacity, integrity, and emotional honesty required to govern talented teams. Experienced management teams or mentors can help a startup

  • gain access to capital,
  • build powerful sales and marketing teams,
  • solidify sales and distribution channels, and
  • identify strategic partners and/or acquirers.

Startup success also requires a team that has the capacity to truly understand the dynamics of the business from recruiting the most talented employees, to the supply chain dynamics, to the customer – and how all of these will change with time and new technologies. Most important, it requires a team that can solve the myriad problems of how to scale a business, gaining and maintaining market share and customer loyalty and confidence.

If we want to create a true Startup Nirvana that better serves entrepreneurs and investors, accelerator programs need to stop polishing the pitch and start developing the winning teams that can turn an idea that has the potential to be commercially successful into a successful company.

 

 

David C Robinson

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