Observing Acceleration: Uncovering the Effects of Accelerators on Impact-Oriented Entrepreneurs

216 Pages·2019·3.82 MB·English

by  Peter W. Roberts

Peter W. Roberts and Saurabh A. Lall
Uncovering the Effects of Accelerators
on Impact-Oriented Entrepreneurs
Observing Acceleration
Peter W. Roberts • Saurabh A. Lall
Observing
Acceleration
Uncovering the Effects of Accelerators
on Impact-Oriented Entrepreneurs
Foreword by Randall Kempner
Peter W. Roberts Saurabh A. Lall
Goizueta Business School University of Oregon
Emory University Eugene, OR, USA
Atlanta, GA, USA
Foreword by
Randall Kempner
Aspen Network of Development Entrepreneurs
Washington, DC, USA
ISBN 978-3-030-00041-7 ISBN 978-3-030-00042-4 (eBook)
https://doi.org/10.1007/978-3-030-00042-4
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Foreword
When I ask entrepreneurs what they need to make their businesses grow and
positively impact the world, the answers usually touch on three major chal-
lenges: money, talent, and networks. In all three of these areas, accelerators
offer support, promising to help entrepreneurs fill the gaps in their financial,
technical, and social resources as they seek to scale. How accelerators endeavor
to do so varies significantly around the world. But in general, accelerators aim
to help startups hone their strategy, identify market opportunities, strengthen
their management teams, and connect to potential investors. In so doing,
accelerators also play an important role in identifying and supporting the
most promising ventures.
Many in the international community have looked to the rise of Silicon
Valley as a source of inspiration. They see startups as the way forward in pro-
moting sustainable economic development around the globe. As the world
tries to identify the next startup hot spot, accelerator programs like Silicon
Valley-based Y Combinator have emerged as a model to help entrepreneurs
take their innovative ideas to market. And new accelerator programs are pop-
ping up all over the world. Of the more than 500 accelerators that we know of,
more than half launched in 2014 or later. With varying structures, methods,
and intended outcomes, and with funding from corporations, foundations,
and governments, business acceleration is emerging as a sector of its own.
As the executive director of the Aspen Network of Development
Entrepreneurs (ANDE), a global network of organizations that support entre-
preneurship in emerging markets, I have seen acceleration develop into one of
the most popular approaches to bolster entrepreneurship in developing
economies. Currently, of our more than 290 member organizations, more
than 30 percent identify themselves as accelerators or incubators.
v
vi Foreword
While the number of accelerators has grown, the evidence base for their
impact lags. A series of essential questions remain. For example, at the most
basic level, do they work? Do accelerators have a meaningful effect on the
businesses they support, or would these businesses have excelled no matter
what? More specifically, do certain types of acceleration programs work best
in certain contexts and for certain types of entrepreneurs?
Five years ago, the sector was only beginning to ask these questions.
Acceleration was hardly studied. There were almost no published papers on
acceleration, little data existed, and there was no clear consensus on what
defines an accelerator. Anecdotes of quickly scaling ventures sent positive sig-
nals, but there was almost no hard evidence to say if this was due to the accel-
erators themselves. And if it was, there was even less research to support
whether this solution could transfer to emerging markets and sectors outside
technology. Data about the cost-effectiveness of acceleration were basically
non-existent.
These questions drove ANDE, Emory University, and a consortium of
public and private funders to come together to make a concerted effort to
expand the evidence base. This work, led by ANDE’s research director at the
time, Saurabh Lall, and Peter Roberts, academic director of the Social
Enterprise Center at Emory University, is designed to ask the hard questions.
Out of this partnership, the Global Accelerator Learning Initiative (GALI)
was formed. GALI is the first initiative to gather data that can speak to the
effectiveness of acceleration programs.
So what do we know now that we did not know five years ago?
Our research shows that, on average, accelerators work. That is, they have
identifiable effects on the growth trajectories of early-stage businesses, or ven-
tures, as they are referred to in the book. Accelerated ventures are outperform-
ing their counterparts in terms of revenue earned, employees hired, and
financing secured, and there seem to be positive effects across a range of geog-
raphies and sectors. Whether this growth is a product of selection, technical
assistance, mentoring, or some secret combination of all three, is yet to be
determined.
By collecting the same kind of data from thousands of entrepreneurs
over time (as opposed to a one-off survey), we now have the ability to
address these—and other—important questions. GALI to date has part-
nered with more than 175 acceleration programs, collecting data from
over 13,000 entrepreneurs that operate in more than 150 countries around
the world. Academics and accelerators alike have been digging into the
data to ask what ‘success’ in acceleration means and what are the best ways
to measure it. Most importantly, we can now say that we have useful data
Foreword vii
and that we have raised the bar for accelerators and funders to be data-
driven in evaluating their impact.
The ultimate goal of GALI is to help accelerators run better programs and
to guide resources to the most effective types of support. We should do this
for the entrepreneurs that need this critical support, and in the end, to foster
a stronger and more inclusive global economy.
In this book, Peter and Saurabh continue to press into complex subjects in
acceleration. They want to know—what types of acceleration programs work
best? Which types of ventures and sectors are best suited for this type of fast-
paced growth? Is acceleration effective in emerging markets? Is it leveling the
playing field for women-founded startups? While there are still many ques-
tions left to answer, I’m proud to introduce Peter and Saurabh’s work, and
hope that it encourages more academics and practitioners to pursue evidence-
based answers to difficult questions around startup acceleration.
Aspen Network of Development Entrepreneurs Randall Kempner
Washington, DC, USA
Acknowledgments
It is difficult to settle on the right order in which to thank the many people
who had more than just a hand in producing this book. If we start with the
reason that the book was written in the first place, then we have to thank the
innumerable impact-oriented entrepreneurs who work around the world to
tilt businesses and markets away from their singular obsession with making
more money for investors who arguably have enough money already. Many of
you are implicitly thanked by the short references and examples that are scat-
tered throughout the book. The rest of you will have to be satisfied with our
general but heartfelt thanks for your amazing energy, efforts, and impacts.
If we start with the people who are the actual focus of the book, then we
have to shout out to the accelerator program founders and managers who not
only see the potential that is inherent in these impact-oriented entrepreneurs,
but also know that the business world is not yet ready for most of them. Our
thanks start with our friend and mentor Ross Baird, who allowed us to become
affixed to, and fixated on, the early evolution of Village Capital. These thanks
extend to the many other people who work to ensure that Village Capital
continues to grow its influence by accelerating many impact-oriented ven-
tures around the world: Dustin Shay, Heather Matranga, and too many others
to be named individually. Our thanks then go out to many other friends and
colleagues who do similarly great work: people like Paul Basil and
P.R. Ganapathy at Villgro, C’pher Gresham at SEED SPOT, Ayesha Khanna
and Megan Christenson at CivicX, Oscar Ortiga (and his team) at Impulsa Tu
Empresa, Carrie Rich (and her team) at the Global Good Fund, Abigail
Sarmac at IMPAQTO, and Rodrigo Villar (and his team) at New Ventures.
We are grateful for the opportunity to work with you all as partners in the
Entrepreneurship Database Program (EDP) and Global Accelerator Learning
ix
x Acknowledgments
Initiative (GALI) initiatives, and for approaching all of our collaborations
with generosity and curiosity—clearly, this is the best way to learn together.
We could also start this list of acknowledgments with the people who are
(or were) instrumental in ensuring that we have the data required to make
these various observations possible. The EDP would not have launched at all
without the amazing early work of Sara Johnson and then Sean Peters. It
would not have made it out of its infancy without the confidence expressed by
the Argidius Foundation and the Kauffman Foundation. It would not have
found a home in the context of the GALI without the support and votes of
confidence from Randall Kempner and Jenny Everett from the Aspen Network
of Development Entrepreneurs (ANDE). (Thanks again to you Randall, for
writing the foreword to the book.) In truth, the list of ANDE people who
must be thanked is a very long one: Stephanie Buck, Katia Dumont (and
many other ANDE regional chapter managers, past and present), Vicky
Hume (for your splendid work on the figures and tables), Kate McElligott,
Mary Mwangi, Aditya Pant, and Rebeca Rocha. And, because GALI would
not be possible without the vision of several founding supporters, we owe a
huge debt of gratitude to our colleagues at USAID (Matt Guttentag and Rob
Schneider), the Argidius Foundation (Nicholas Colloff and Harry Devonshire),
the Lemelson Foundation (Carol Dahl), the Omidyar Network (Mike
Kubzansky), and the Kauffman Foundation (Amisha Miller and Alicia Robb).
We might also start our acknowledgments with the people who we most
directly and regularly leaned on over the last two years. Emily Eastman, Brent
Ruth, and Josh Zhou know that curating application and follow-up data from
scores of accelerator programs around the world is hard enough without our
continuous stream of requests to check and contextualize our many observa-
tions. Thank you—over and over again—for your many efforts, and for mak-
ing sure that the EDP and GALI programs continue to develop so that we can
continue learning more about impact-oriented acceleration. And, because the
EDP does not exist in isolation from the bigger team at Social Enterprise @
Goizueta, we also thank Aelish Benjamin-Brown, Tiffany Campbell, Giselle
Carias, Brian Goebel, Erin Ingleheart, and Jacob Watt-Morse—for the work
you all do, making markets work for more people, in more places, and in
more ways, and for your comments and suggestions on earlier drafts of our
various chapters.
A final round of thanks goes to two of our academic colleagues: Li-Wei
Chen and Wes Longhofer. As the EDP database manager, Li-Wei has been
responsible for turning the various streams of application and follow-up data
into one unified river of data. As our co-author in several research papers,
Li-Wei also develops the more complex econometric models that help us
Acknowledgments xi
understand entrepreneurs’ needs and preferences, as well as accelerators’ selec-
tion practices. We hope that any topical interest that we cultivate by publish-
ing this book will immediately transfer to the great work that is housed in
your published and soon-to-be-published papers. As for Wes, there is no bet-
ter or smarter colleague to think about issues at the nexus of business and
society. We are thankful to you for sharing many of these thoughts with us,
and for your feedback on multiple versions of our surveys and chapters.
Of course, if we really want to do this right, we would start by thanking
two people who, in an alternate universe, would be recognized as co-authors
of this book: Abigayle Davidson and Genevieve Edens. Abby and Genevieve
are thanked as ‘ghost co-authors’ in several places throughout the book,
most notably Chaps. 5 and 9. This book would not have been possible, and
this intellectual journey would not have been nearly as pleasant, without
our regular conversations and collaborations. For this reason, we not only
thank you both. We also dedicate our book to you—our amazing friends
and colleagues.
Now that we have settled on the many possible options for thanking the
people who helped make this book possible, we must also thank the special
people who make our work possible. Peter thanks his wife and kids—Tania
Herbert and Ellis and Oliver Roberts—not so much for what they put into
the book, but for what they put up with while the book was being written.
Saurabh is grateful to his parents Ajay and Priti Lall, an endless source of
encouragement, even from 8000 miles away; and to his wife, Naila Bhatri,
whose own work at an impact-oriented enterprise is continually inspiring.
Finally, we want to be sure to thank our editor, Marcus Ballenger, and the
amazing team at Palgrave Macmillan; in particular, Jacqueline Young and
Lucy Kidwell. You have all been supportive and patient throughout this pro-
cess; supportive in guiding us through our first book project, and patient with
the corresponding stream of naïve questions and requests from two newbies.
We hope that you are satisfied that our book represents an adequate return on
these much-appreciated investments.