The Pacific Northwest is teeming with entrepreneurial activity, and it’s fortunate indeed to live in a region where the city recognizes and supports the impact entrepreneurship has on the local economy. The region is also home to some of the top startup accelerators and incubators in the country, with Techstars launching some of the hottest consumer tech startups, Microsoft Ventures with a new track on the Internet of Things, and one of the top B2B accelerators in the country with 9Mile Labs.
In catering to the entrepreneur set, these companies hear the same questions over and over again: What’s the difference between an accelerator and an incubator, and which one is right for me? Here’s an answer to those questions and a guide to help entrepreneurs determine the right launching point for them.
The Focus: Incubators support start-ups with affordable office space and access to professional resources that will help them build their business.
- Shared Offices and Resources: Some of Seattle’s top incubators include SURF Incubator (www.surfincubator.com) and the Impact HUB (www.impacthubseattle.com), which rent economical desk space and access to conference rooms, printers, Wi-Fi, and miscellaneous other shared resources for a monthly fee. The environment is usually open and collaborative and suited for individuals and small teams.
- Collaboration: Because incubators house many early stage companies side-by-side in an open floor plan, the opportunities for cross-pollination of cool ideas and meeting like-minded co-founders or potential partners are pretty good. Most thrive on a dynamic and active environment.
- Networking and Professional Events: Incubators often arrange events and opportunities for professional learning, presented by other entrepreneurs and professional services firms (marketing, legal, accounting, etc.) who can promote their services while educating startups on the ins and outs of business. These resources cater to the startup, allowing them to dive deeper into all aspects of building a business.
The incubator is best for those who:
• Have an idea and are ready to leave the day job to work on it
• Don’t need an investment right off the bat
• Do need a place to work and prefer an open, collaborative environment
• Want networking, collaboration or partnership opportunities with others
• Want access to other entrepreneurs, professionals and services for learning and support
The Focus: Accelerators provide financial and professional support to help early stage companies flesh out an idea, develop a complete strategy, and build stage-appropriate fundamentals for the business.
- Application Process: Think of an accelerator like 9Mile Labs and TechStars as an accelerated and funded B-school. Startups must apply and are accepted along with a handful of others based on a number of criteria that go beyond simply the quality of the product or idea. Programs look for smart, focused, dynamic entrepreneurs who are hungry and have a deep desire for success. Application processes are rolling or deadline based, so keep an eye on these and apply more than once if you don’t make it the first time.
- Structured Program: Startups commit for three or four months and work on campus, so to speak, in the same office, open-floor-plan style. Few accelerators have no requirements for working in the common workspace, but most require all companies to assemble together for an event or two per week. The structured program supports founders in articulating the core pain/benefit of their business, customer value, go-to-market strategy, revenue model, sales strategy and more. With constant feedback from mentors and advisors, the program helps companies develop and refine their products and services, build their team, develop an investor pitch and introduces them to angels and VCs in the region. The length of the program, caliber of the mentors and advisors, specific program content and structure, and location (i.e. if you’re launching a cloud service, Seattle is a great place to be) separate one accelerator from the next, and should be deeply considered in selecting the right one.
- Investment: Accelerators support startups with an initial investment, usually between $10k-$40k, and will invest further after the program term if growth and progress match their investment goals. Additionally, accelerators are closely aligned with many investors and VC firms allowing the teams to present to, get feedback from and build relationships with those investors. Graduating from an accelerator usually involves a demo day that allows the startups to present in front of investors, mentors, executives and the greater community at large.
An accelerator is best for those who:
• Want to commit to a full-time structured program with access to top-notch mentors
• Want to expand their network of customers, partners and investors
• Are self-aware enough to “know what they don’t know” and open to coaching from a diverse and experienced set of professionals
• Have an understanding of their customer and problem they’re trying to solve
• Are seeking an investment to get their product or service off the ground
Note: 9Mile Labs accepts applications year-round and runs two cohort programs each year.