“Most companies coming out of business incubators and accelerator programs nationwide are garbage,” stated a private equity investor recently on a panel discussion at the National Business Incubator Association (NBIA) conference. The current model used by most incubators and accelerators “does not work”. Government programs, university resources, and private investment are being “wasted” on companies that ultimately fail.
The problem is not that the companies fail. Most early stage business ideas will and should fail or change. Indeed, “successful startups are the ones who have enough money left over to try their 2nd idea.” – Clayton Christensen, Harvard Business School. The problem is that resources are wasted, resources that could have been utilized in a more effective manner, incurred a greater return on investment, or at the least, avoided a loss.
Why are business incubators and accelerators failing? Why are resources being wasted? What is the solution?
The USTAR funded G2M Business Accelerator program, run out of the UVU Business Resource Center, is ahead of the curve in solving these problems. A professor on the same NBIA panel suggested new methods are coming out to vet companies and ideas. He mentioned books about lean start up principles and specifically recognized “Nail It Then Scale It” by Nathan Furr and Paul Ahlstrom.
The G2M Business Accelerator process acts as both a SCREENER and an ACCELERATOR. The process screens business ideas and then accelerates the good ones. A business that takes full advantage of the Business Accelerator will have its business idea formally screened at least 13 times during 3 different phases, and it could be screened any number of times as it is reviewed by each potential customer through market validation, customer testing, and proof of concept testing. Much of the work is done by business owners themselves, which avoids using government, university, or private resources prematurely.
In the past year-and-a-half, over 200 companies have applied for the Business Accelerator (mostly through word of mouth advertising), about 150 have gone through phase I, approximately 50 through phase II, and 15 through phase III. Not a single company has ever gone through the program that has not changed its idea or business model. One startup company stated of the vetting program, “I estimate that the G2M process we’ve gone through has saved us 6 months of development time and $40,000 in coding costs.”
Along with the screening, resources are available at the Business Resource Center to accelerate good ideas, including state and federal funding, loan assistance, business counseling, prototyping, website design, 3d printing, manufacturing training and sourcing assistance, government contracts assistance, business model planning, networking, sales and marketing training, management consulting, and really anything else a company needs.
To learn more about the USTAR G2M Program, the UVU Business Resource Center, or to apply to the program visit www.uvu.edu/brc