The dynamics and process of getting a technology company off the ground are changing. When accelerators first started emerging I admit that I was skeptical. Obviously Y Combinator’s launch in 2005 was intriguing, not because of what they were planning on doing, but more because of who was behind it. I definitely saw it as a “startup school” where first-time entrepreneurs could go to learn the trade and receive mentorship and resources that they could never dream of having access to. Not long after, TechStars emerged and began having similar success to Y Combinator. This led to an opening of the floodgates as it seemed like there were accelerators popping up everywhere. There are more than a hundred in operation today.
Accelerators are a great fit for the key trends we have seen evolve over the past decade:
- The decreasing costs of launching a technology company. The rise of cloud services, mature open technology stacks and client-side scripting technologies has enabled developers to build dynamic web and mobile applications for significantly less than in the past.
- The cost of customer acquisition is lower than it has ever been. The growth of internet users, development of contextual advertising and social networking platforms has provided the ability to acquire large number of customers at considerably lower rates. In addition, it has also allowed an entrepreneur to take an extremely analytic and economical approach to test, measure and iterate on business models.
- The time to market for an internet or mobile product has continued to decrease. It is now possible for an entrepreneur to have a product in the hands of a customer in a couple of weeks. Once a product-market fit has been found it is also extremely fast to start deploying customer acquisition and marketing strategies leveraging online channels.
- The increase of smaller acquisitions and early exits. With the poor IPO markets and need for large companies to continue to innovate in order to stay competitive there has been an increase in smaller acquisitions, below $100M. In the last couple of years there has also been numerous companies acquired for their product, or in some cases, their teams. These developments are ideal for accelerators and can result in quickly recycling capital with exits occurring 1-3 years out of the program.
In addition to the above trends, it has been fascinating to see the demand from entrepreneurs for the top accelerators. Even more surprising is that these are not just young first-time entrepreneurs, but serial entrepreneurs and experienced technology people who see an accelerator as the best path to launch their new venture. It is this increasing demand from entrepreneurs that has us bullish on the accelerator model.
So why do we need another one? While there are accelerators launching all over North America most result in contributing to developing entrepreneurs and building local tech eco-systems. Don’t get me wrong, this is a very good thing and needed. However, accelerators that result in producing big wins and the type of entrepreneurs and companies that can become cornerstones in the tech eco-system are few and far between. You can ask any budding entrepreneur what their goal is in getting their startup off the ground and they will tell you it is to get accepted to Y Combinator or TechStars. So what is Canada’s answer to Y Combinator and TechStars? We have been asking ourselves the same question and believe that we have found the answer in GrowLab.
There are 3 key ingredients for a successful accelerator – people / mentors, community and brand. We are huge fans of Boris, Leonard, Jason, Debbie and Michael and are equally impressed at the group of mentors they have engaged. The fact that the founders are some of Canada’s most successful entrepreneurs gives GrowLab immediate credibility. The number of quality investors at the table from both sides of the border also speaks to the commitment to make this one of the top accelerators in North America.
The Community is also crucial for a successful accelerator as it needs to be embedded in a strong tech community that is wired internally as well as internationally. The emergence of the tech scene in Vancouver has been more than impressive behind the leadership of some extraordinary entrepreneurs and big successes. Seeing some very prominent startups (A Thinking Ape, Tiny Speck) based in Vancouver only fuels this community. Couple this with the unique aspect of GrowLab running the last portion of the program in San Francisco and it places the accelerator in two of the most desirable tech communities on each side of the border.
Lastly, to be a top accelerator you need to be able to attract the top entrepreneurs. Much like building a startup, you are only as good as the talent you can recruit. Leveraging the excitement around the GROW brand, conference and community gives GrowLab immediate exposure to entrepreneurs across North America.
Anyone who has had any interaction with the iNovia team knows that we are extremely passionate about building entrepreneurship in Canada. We also realize that this cannot be done by only focusing within our borders. This is why we have a cross border focus through our US portfolio companies, the many VC funds and angels we co-invest with and leadership in organizations like the C100. We strongly believe that GrowLab fits our approach and beliefs in building successful startups, and ultimately, some massive success stories. We are extremely excited to support GrowLab not only as an investor, but more importantly, as part of the leadership and providing mentorship to the next generation of successful entrepreneurs who look to launch their startup in Canada through GrowLab.
Check out the official release here.