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Startup Accelerator Fail: Most Graduates Go Nowhere

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Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#51

Post by seats »

pg wrote: post #14
kylebrown wrote: post #13

Earlier quoted context omitted.

How about median valuation?

The trouble with median valuation is that even for the most successful incubators it will approach zero, because I doubt any of us are going to have a success rate over 50%.

One thing that is interesting about looking at both mean and median is getting a feel for the shape/variance of the returns.

One huge winner could randomly happen in an otherwise low-quality program and that incubator would appear higher on rankings forever after that unjustly since the result is very much not reproducible. In other words measuring by average could mask getting lucky.

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#52

Post by specialist »

yesimahuman wrote: post #2

I think their metrics of success are silly (zero discussion of revenue, only caring about VC perception, etc.), but the other conclusions don't surprise me. What I've noticed from copy-cat incubators and accelerators is that they incorrectly observe what YC is and apply something very different. Many of these programs are more like a class, with structured lessons and methods to success. Attendance might as well be r…

> ...incorrectly observe what YC is and apply something very different.

Heh.

I once captured an employer's engineering methodology (from memory) thusly:

- misunderstand the problem

- exclude domain experts and stakeholders from decision making

- make decisions

- don't tell anyone

- (post mortem) identify nonparticipants to scape goat

- repeat

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#53

Post by blueshammer »

dxbydt wrote: post #40
kylebrown wrote: post #34

Earlier quoted context omitted.

That's why I liked dan shipper's (rather timely) blog post the other day about choosing to build a sustainable business instead of swinging for a homerun, and striking out.

While I applaud his motivation, what he's suggesting is an intrinsically unsound way to go about it. A startup = a chemical reaction with extremely high activation energy. In such circumstances, the best thing you can do is get one or more catalysts. YC or any other VC/incubator is just a catalyst to lower your activation energy & let the chemical reaction happen sooner/faster. Without the catalyst, the reaction will…

Why not spend $6500 in sv and work 8 hours a day

Because your VCs will go crazy if they found out you were only working 8 hours a day. I've interviewed with both TechStars and YC startups - and they've told me that 55-60 hour work weeks are the norm. Damned if you do, damned if you don't.

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#54

Post by pg »

startupfounder wrote: post #44
pg wrote: post #33

Earlier quoted context omitted.

If you're measuring them as investors, you want the average, because if (as all these incubators do) they invest roughly the same amount in every startup, then average is money out divided by money in.

Even saying it is about the average valuation doesn't take into account the age of the accelerator. This is the real problem I see. What is the average valuation of each class after the same time period? For example, the first class of YC vs. TS vs. SC vs. etc. after 1, 3 and 5 years? This would show us the speed of growth of each accelerator compared to other accelerators when they were the same age. Even if YC has…

Yeah, actually, come to think of it the right metric might be valuation divided by age in years.

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#55

Post by soundlab »

I have such a hard time with these studies that view everything through the lens of venture capital. What a horrible metric for sustainable business creation.

How many accelerator companies are breakeven, steadily growing businesses? Isn't there something to be said for stable ground? Cash positive, lateral expansion into markets and positions leveraged on traditional debt sources?

The richest guys I know started out 30 years ago and built on strong fundamentals, not on "demo day funding requests" and "exits".

Too many young entrepreneurs are clouding their judgement by aligning their decisions with those of VCs and articles like this.

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#58

Post by robryan »

This is a tough one, some of the second string accelerators could be failing because of the applications they are getting.

It becomes and chicken and egg problem, to get good mentors and attract investors they need to get good founders involved. To attract the good founders to an extent you are going to need good mentors and access to a strong investor network that the founders benefit from accessing in conjunction with the accelerator. Or alternatively a far better equity deal.

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#60

Post by throwaway1979 »

seats wrote: post #51
pg wrote: post #14

Earlier quoted context omitted.

The trouble with median valuation is that even for the most successful incubators it will approach zero, because I doubt any of us are going to have a success rate over 50%.

One thing that is interesting about looking at both mean and median is getting a feel for the shape/variance of the returns. One huge winner could randomly happen in an otherwise low-quality program and that incubator would appear higher on rankings forever after that unjustly since the result is very much not reproducible. In other words measuring by average could mask getting lucky.

"One huge winner could randomly happen ..."

One would think that. The article states that 45% of programs have not had any graduate that raised venture funding. That boggles my mind. But this data helps explain the uneasy feeling I get when I see niche accelerators following a cargo cult mentality.

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