B2B NN wanted to analyze the state of the Canadian accelerator space, and who better to bring insight into this investigation than two experts who’ve been embedded in the field for years?
To identify the trends coming to accelerator programs for startups, we spoke to Marcus Daniels, Co-Founder and CEO of HIGHLINE, a pre-seed fund and accelerator provider, and Sonia Strimban, manager of venture operations at the MaRS Discovery District in Toronto.
Below are several trends these two insiders spotted in accelerator programs across the country, as well as the world:
Strimban points to Daniels’ HIGHLINE, in fact, as an example of consolidation. In 2014, Vancouver-based startup accelerator GrowLab Ventures and Toronto’s Extreme Startups announced their merger and launch of HIGHLINE, in order “to unite the best entrepreneurs, investors and ecosystem partners living above the 49th parallel…”
Going the merger route is smart, Strimban says, because as “more micro accelerators pop up, it’s harder for them to compete to maintain a high level of success.” Having a national breadth offers an accelerator like HIGHLINE a major advantage, as well as startups enjoying the spotlight for working with credible VCs in the startup ecosystem.
Revving up refocusing
Along the lines of savvy collabs is how accelerators are increasingly shifting focus. Strimban cites Communitech’s Hyperdrive out of Waterloo, Ontario, which is transforming heavily to offer up Rev, a sales-focused program to drive scalability.
“We got great feedback from a lot of stakeholders and realized there was a need for a new kind of accelerator,” said Steve McCartney, VP of Startup Services at Communitech, to media. “One less focused on product development and investment, and instead focused on sales and revenue growth.”
The model for a standard accelerator program is challenging, Strimban says. “A conveyor belt of demo days full of cohorts doesn’t offer companies sustainable ways to grow business, and there is pressure due to fixed deadline dates.” She notes how MaRS’ Jolt accelerator program aims to be flexible, with no artificial end dates for cohorts, but instead focused on “looking for indicators of growth and understanding what realistic timelines for a mature startup would be.”
She adds, “Fixed timing works against some startups too much…Many fixed accelerators are about ‘Make it or go home.’”
Corporations getting cozy
Daniels has seen how more corporations are interested in “getting closer to startups they may want to invest in,” such as taking part in demo days by observing an entrepreneur’s ideations. “More meaningful partnerships are happening within accelerators, which means a more direct dialogue between the interested parties,” says Daniels.
Why the hand-holding? Corporations are more in tune with disruption during their operating year, Daniels says. They don’t mind getting their hands dirty in early-stage ventures, even if they don’t invest directly into them, and opt for, say, LP investment.
Strimban spotted a few examples, such as the fintech collaboration between Barclays in London and Techstars, where Barclays has gone so far as to create its own accelerator in the fintech arena.
Specialization is soaring
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Specialized accelerators are all the rage, say Strimban and Daniels. Strimban has seen fields such as IoT, data science and energy all enjoy a bevy of specialized accelerators, all with “the goal to get over the demonstration line to snag revenue,” as Strimban notes.
Look at a startup specializing in IoT, Daniel says. With specialized mentors and corporate backers, they can offer a compelling value prop, he remarks.
Booming right now is fintech, as evidenced by the fintech clusters cropping up at MaRS. “Canadian startups in fintech are making noise on a global stage,” says Strimban.
When it comes down to it, entrepreneurship is about creating a business that solves some sort of problem, says Daniels. And the right specialized accelerator can be there to propel that cause, thanks to knowing that space inside and out.
Attracting American adoration
“I’ve seen the trend of large accelerators out of the U.S. actively recruiting in Canada,” says Strimban. “Canadian startups are less expensive to invest in, so investments go further and the quality of innovation is equal if not better than the U.S. equivalent.”
Turning to south of the border, Daniels says the accelerator field in Canada is mirroring the U.S., where many Canadian startups (think Shopify) are performing fairly strongly on the global stage.
When I ask Strimban what she would like to see in the future for accelerators, she replies, “More collaboration globally. If a fintech launches, for example, they should figure out where the hot hubs are and dock in those hotspots where fintech is really relevant, and working with incubators such as MaRS.” She adds going to such a hub can help a startup that needs to be in a concentrated area of investors in a dedicated field so “when they graduate from an accelerator program they’re not dying on the vine.”
Daniels is optimistic more transparency and accountability will take root in the accelerator space, such as HIGHLINE providing more data on their programs this year.
What have you noticed in the accelerator field in Canada so far? What would you like to see? Comment below or reply to us on Twitter @b2bnewsnetwork
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