I feel like any "X is bullshit" post that doesn't start out with a definition of X or Y or Z is just a glorified troll. Half this thread is going to be people either identifying with or attacking the straw man that's posed but isn't really defined well.
Even among people who run accelerators, incubators, and other types of programs, there is a lot of debate over where the lines begin, end, etc.
Instead of saying "incubators are bullshit" why not just saying "Doing bullshit is bullshit" since that seems to be the actual point of this post. Don't do unproductive stuff that doesn't actually advance your startup. Great. That advice is just as appropriate for outside of incubator people as those within an incubator.
For example, while reading this article I just kept getting distracted from the actual main point - many incubators just provide low cost office space. Is that bullshit? Many incubators aren't actually accelerators like the author seems to confuse the term with. Is that bullshit?
I remember reading an article from the New Yorker where they talked about making fun of wannabe authors who just sit around and do everything that authors are supposed to do except write. They called this "writering" and it seems like the author is trying to say the same thing about "startuping". Good. But that problem will always exist, regardless of whatever incubator you're in or not in.
So maybe we should focus on the actual problem instead of just blasting a straw man, hoping for clicks?
I actually found the article to be thought-provoking. I think there actually is a problem of inexperienced founders setting their sights on just getting into an accelerator, distracting them from the bigger picture.
The point of the post was that many incubators are actively encouraging first time startup founders who don't know any better to do bullshit. The point is that in many cases, first time founders are better off spending their time NOT applying for incubators or doing incubators because then at least they won't be encouraged to do bullshit.
There are obviously exceptions (YC is one of them), however the point of this article is to point out the rampant bait-and-switch that has emerged from me-too incubators.
And yet, without defining what you mean by incubator, the whole thing goes off the tracks immediately. Y Combinator and TechStars identify themselves as accelerators.
From Y Combinator's google profile: "Y Combinator is an American seed accelerator, started in March 2005."
From TechStars: "TechStars is a mentorship-driven startup accelerator founded by..."
There's a difference.
Most incubators in my area mainly focus on cheap rent, hotdesking, and basic infrastructure. Nothing like what you're taking issue with.
I don't know about the others, but this is not a description of YC. The whole point of YC is to focus on real work. The first thing we tell the startups we accept is that they should build stuff and talk to users (and exercise and spend time with their families) and nothing else.
When the Airbnbs came to speak at the last dinner, Brian Chesky said that the 3 months of YC had been the most productive time in their lives.
I agree Paul: YC is the only incubator I would explicitly exclude from this tirade. In fact, I call out YC in section 4 as having incubated companies I would love to be like.
I would exclude Techstars too, I went through the Austin program and it was also one of the best things I ever did. I learned so much.
TS does have a slightly different focus than YC - first month they tell you to not build a whole lot of stuff but to talk to 90+ mentors (that they curate), then second and third months are balls-to-the-wall build, talk to customers, etc... with the third month having a focus on pitch practice for the CEO.
Am I the only one who doesn't much like the word "mentor"? It makes me imagine kind of a superior/inferior relation, as if the best people aren't the ones who starting the startups. Shouldn't the very best people be the ones in the startups?
mentor:
- an experienced person in a company, college, or school who trains and counsels new employees or students.
- advise or train (someone, esp. a younger colleague).
The word has very clear, strong connotations.
So what is being said here? That founders can't be experienced serial entrepreneurs? That older people should be training younger people? It's a very strange word to choose, and I think it impacts how people perceive their roles.
Your interpretation, I think, is off. The mentors I met ranged from intellectually superior, experientially superior (billion dollar companies under their belt, > 1 company), financially superior, operationally superior (in ability to speak or lead or execute), etc...
Some were my age, a few were younger, some were old, and others in their 30's.
Some "mentors" were more like peers - current founders that had grown beyond the "we are trying to make it" phase. Others were aloof. Some only cared about "being a mentor for Techstars" and not actually helping the companies. Others had little to provide except for enormous enthusiasm for what everyone was doing and hung out all the time.
I learned a select few things from our mentors that was really important (mostly about leadership and fundraising) and most of the other mentors were more of a sounding board that allowed me to hone in on a consistent, concise, and powerful story about my company and our product (which we really didn't have prior).
In one meeting you'll get lots of support for direction X and then the next meeting you could be met with a lot of skepticism for that same direction X. I learned quickly that absorbing the mentor's personal experience and then training a better story by telling it and observing how much of it they understand or don't understand or is picked apart by them.
What is being said here is that founding a company is hard. Having a sounding board is extremely important as an indirect heuristic and there are some things you can directly learn from some of the mentors.
I've never thought of a mentor as being necessarily superior. But if the "best" people are the ones starting the startups (which isn't always the case), they should be smart enough to know they can learn from others.
When I went to tech meetups I met a couple mentors that had office hours... the first thing they started talking about was how much money they helped startups raise. They acted as if that validates any advice they gave. And their advice didn't seem that good.
In reality I got more helpful advice from my peers. That's why I recently started a club for developers. The idea is to meet weekly online and talk to each other about the progress of our projects and startups. If any developers feel like they have no network at all (like me), then you should join my club. The link is in my profile.
The Austin program has a great star: Jason Seats. I used to mentor for him at TechStars San Antonio, and I liked him so much that when he moved to Austin, I decided to mentor for him there. Amazing guy.
I like that exercise and spend time with family part, emotional drain is cause for productivity lost, bad decisions. The basic definition of start up is to get it running, building everything all along, customers, product, technology, architecture, user experience, UI Design, re-iterate the learning and fine tune again and again. Mentor is not needed for technology advise or adding business value or evaluating user interface, instead a mentor helps to drive the startup crazy, throw the founders into kickboxing stage, let them fight and learn than learn and fight.
I'm going through a great Irish incubator at the moment and I agree. The ones that focus on customer development and give you the added resources to do it more effectively are definitely worthwhile and make your limited time more productive.
There are a lot of incubators out there. For startup founders I suggest you do your homework.
It is great that you emphasize that. Success (or at least progress) seems to come down to what the founders choose to spend their time doing and/or be distracted by.
It is really easy to let meetings distract you from building.
Early stage, more than just meetings distract you. Hiring developers so you can expand is distracting, fundraising and being in the loop with your CEO is distracting, family and friends are distracting, coffee with brilliant and experienced people is distracting.
There comes a time when you've done this startup thing more than once, as a founder, to realize that everything - even day-to-day operations - is a distraction from the core intention of building a product. What do you do about it? Get really good at time boxing, delegating, and prioritizing.
Programmers are typically not very good at handling multi-faceted schedules and being ruthless about that schedule.
Agreed. People with no clue how to create and scale a business have copied a formula developed by people who actually do understand this. This isn't just not helpful, it's actively harmful. By anointing themselves as the local "conveyor belt" for interesting companies and talented entrepreneurs incubators have created confusion in the market that harms perfectly good founders who do not participate. People say... "you should apply for XYZ accelerator" and my reply is... "why?" Is there any reason to other than that other people do? It has become a sort of tax or validation stamp that we are all expected to seek out... and after that go on Shark Tank?! Then at some point we get acquired by Yahoo?
Successful startup outcomes and solvency in the incubator world are not correlated well. The companies that are selected are carefully directed through a maze of expensive professional services controlled by the program directors. The bargain becomes... if you use this lawyer, this PR consultant and this accounting firm we will support you. What this means is that every failed startup isn't really a failure because in the end that company spends all their money paying off the incubator's network. It's an engine of corruption that takes advantage of people and companies that can least afford it. Whether they create any real startup success is not especially relevant to their continued survival, it's just a bonus.
Many incubator programs also tends to select for people who are very well behaved, polite and have simple A to B ideas. True disruptive innovation is usually created by disruptive people who have very big ideas.
I don't think incubators really intend to hurt founders or the market, but they do.
You're casting a really wide net, which is not accurate. I will only speak to my own experience, but Techstars is not what you're talking about and of the friends that went through YC and 500, they seem to say similar things (that it was good, amazing, edifying).
Disruptive innovations is created by all types of people - meek and quiet people, some people that have a lot of great energy but little focus, some people with great focus but no programming skill, women, men, and even small ideas can be innovative (to a lucrative degree).
If you've been through each program then the size of your brush stroke is "just a little bit" more justified: diversity is a good thing, incubators aren't hurting anyone, and there are people making amazing stuff happen from every possible angle (bootstrap? incubator? wealthy family money? friends and family? payday loan investment? SBA loan? government grants? on-the side while working full-time? champion angel investor?).
I really don't mean to offend people running or participating in good incubators. I stipulate that YC, 500 and Techstars and others are run by people who know what they are doing and work to contribute to the success of their members. They are not the problem.
There is no offense, I just think it's important to characterize accurately and you can only do that with good data - I'm providing one (I think) good data point on the accelerator / incubator experience that I've had.
I also think people that dish out a lot of exaggerated commentary on a wide and diverse subject are speaking about something they don't know very well (such is the case with the article's author).
I do agree though that some incubators can be a problem - but really, the onus to select carefully is on the entrepreneur just as it is in selecting your board or investors.
YES! YES YES YES! You talk like a true craftsman founder.
So many founders seem to think they have to do incubators because it is what is done. They treat it like traction. And they are completely indiscriminate. "I just got into the podunk incubator! #win #retire #done"
Thinking like this is dumb. I really hope people don't think like this.
Incubators/accelerators are, like anything else, tools. You should do them if they provide value to you and your business, and create more value than equity they require. For us, that was decidedly true; we moved to the valley with a very small network, and I can directly trace many of the early successes we had (not that we're a success yet) to someone I met through the network at 500s.
Do people really do incubators because they're the 'thing du jour?' I really hope not. It's a lot of equity to give up for just a name. We went in with the goal of completely blowing everything out of the water, being smart about what we used it for, and using it to learn and build our network. In that, I believe we were successful. Nobody should do it because of the name or because they think they can't do it on their own.
I know we could have done it on our own, but this...ahem...accelerated us along that path.
"They treat it like traction." Agreed! Just got an email tonight from a guy who is so pumped to get into an incubator and I was like... ummmm... You are being pimped. I sent him your post.
This is not indicative, at least, of 500 Startups. Look, you can fuck up your time with any incubator by not focusing on things important to your startup. Dave McClure and the other partners there will yell at you for doing this, and the common theme is "Get back to fucking work" and "Don't waste your time with bullshit meetings."
The overall feeling is: build, get customers, experiment and verify, and build.
The problem is that most accelerators (500 included) have a TON of opportunity for distraction, and undisciplined founders get distracted. For us, 500 was immensely useful because it gave us a network of people to reach out to that didn't exist in our world before 500. For finding customers, verifying assumptions, user testing, raising funding, and all that other stuff that startups have to do, this was incredibly important.
tl;dr: incubators are what you make of them. you can waste your time, or it can be the most productive time you'll ever have, and it all depends on your discipline. you'll have more opportunity than you would otherwise, but you have to be disciplined about what avenues you pursue and which you don't. the same is true of college, incidentally.
EDIT: It's important to note that I made this mistake freshman year at MIT, and learned from it. There was so much opportunity for learning, initially, that I squandered it and tried to do too much. I was incredibly busy, but never really got anything done. I learned to focus on what's important, but the resources I had at MIT meant that focus was better utilized than it would have been at a smaller school with fewer opportunities. The same is true for incubators/accelerators; we saw undisciplined founders have this problem, but we took full advantage of all the resources 500s gave us, and ignored the meetings/events we didn't care about and that weren't useful to us.
If you're gonna start an incubator, you've got to have serious media creds, founder relationships, have other founders on-board and soft launch. Basically Om's other possible career option.
It's inevitable that folks would try to copy a model tactically without understanding the strategy. However I've seen European old money enchanted by people that are adept at playing the valley game. For example, one promising approach might be to solve some timely pain-points: what arent startups usually good at? global localized replication post-traction, customer service and backoffice. This is shit that usually gets built "organically" and falls (or fails) over, until real professionals are brought in to make it look more like a real business. That could work since it reduces risk on the investor side (by funding things later) at the risk of accepting higher valuations. They seem to have the ca$h but don't know what else to do with it.
But coming at founders with only a wooly wish and demanding equity is only going to rope in people too desperate to know the difference. Wantrepreneur incubator : not gonna try to portmanteau that. Thankfully, there's an app for that: http://portmanteaur.com/?words=Wantrepreneur+incubator
It truly doesn't matter when it pops up or if there are worse offenders out there. It interrupted me, I was annoyed, I left. Did not read the content, did not click on ads, I just left. End of story.
There is so much private liquidity that "IPO" is nearly irrelevant to the conversation, tho. Public liquidity pools were considered the touchstone before the advent of hedgefunds. Alot has changed since 1999 in this regards.
Sorry for the late reply. I've been through Techstars. If interested, I'd be happy to elaborate, but the OP hits on things that I can firsthand attest to be true.
I feel like one of the reasons YC isn't bullshit is that they do less. Companies don't work out of YC, there isn't the strange emphasis on "networking" that you see in most incubators. Put simply, by offering less shit they exclude opportunities for bullshit.
I do personally analyzed 50+ companies in Indian startup scene who gone through incubators. Not many of them had success. I asked one of the founder of the company who had gone to MS Accelerator, he mentioned as 4 months of office space without rent.
I serious doubt mentor contribution in the startups. Every problem is unique, I exactly don't know what mentors brings to the team and table in such a short meeting (1-2 hrs) on weekly basis.
Go to their site, find the list of startup listed. you see, there is no relevant improvement on the site, no apps as they promised to build. Just plain html pages on few sites.
Carlson is looking at things from a very narrow perspective. If the industry has high barriers to entry, an incubator can help because it just gives that extra lead time you need to get a product to launch. Not all products are apps that you can churn out in the basement to profitability.
What if you have additional inventory? What if you need to purchase forwarding commodity price? What if your idea is simply new enough that you don't have any precedents? Incubators can help with that, especially if they have a lawyer and accountant at hand.
There's also a third factor, which is that if you're an international/immigrant or someone from a state unfamiliar with tech industry, then the connections are helpful. The idea of low fidelity networks being worse off is absolute bullshit though, it's been proven over and over again that a large network of weak ties generates a stronger overall response than a small network of strong ties. Weak ties is what builds communities and gives people jobs (which tbh, is exactly what Linkedin managed to do so well technologically)
From firsthand observation of YC since 2011, YC doesn't suffer from most of the (legitimate) gripes you point out.
I also have a pretty high opinion of 500 Startups as an outsider. It seems like 500 goes for singles and doubles more than YC does, and ranges farther afield in trying to get new applicants from underserved areas (although YC has stepped up on this in the past 9 months). I don't have as much data about 500 Startups, but I'd probably say it's a net-accretive thing for participants and a solid #2.
Every other choice I would very closely judge before participating. The problem is most of the people entering are in the least capable position to judge the value of a specific program.
Apply to YC -- Summer 2014 apps close in a couple weeks.
To be there, the contract say the founder MUST spend 50%/week of the time in the incubator (hearing lectures, have somebody tell him how make a business plan, "networking", etc).
I have been there, and get out. I have talked with the people that manage that asking "why not copy y-combinator" (with specific points, btw). But the problem is that that "50%" is billable. The get money for each startup wasting time there...
I think this article is really short-sighted, in that he is just making a blanket statement that doesn't apply to all incubators and doesn't apply to all companies.
We are applying for incubators now, because it will give us the opportunity to continue doing business and will help us grow our business. We think it will be a good fit, because we are heavy on the engineering side and are looking for some investors to get on board and back our passion with real dollars. Runway + opportunity to focus is the reason you want to get investment or into an incubator.
Anyway, nice work on getting people to your site through a clever title.
Incubators are Bullshit, Startup Accelerators are Scams
Barring few in US and India, you can put the rest in the above two categories. Most of the people running these incubators/accelerators are there for Kicks, Greed, Ego and Entertainment only and themselves don't understand the challenges of building a business. Unfortunately most of the startup founders are too naive and in hyper state of mind so get sucked into these.
I think there are good and bad incubators. As a founder you always should _rate everything you do on facts_. Inform you about failure/success ratio and asks former participants what they think about it.
I for myself have never participated in an incubator because I want to focus on the product and customers first. But this is just my 2pence.
Your excerpt from the manifesto raises an interesting point, about "deadly" consequences of mistaking ambition for greed. At the same time, you call out specific people and imply they killed themselves because of their own greed.
Can you clarify whether you actually know that, or is that just, like, your opinion, man?
Working from the general atmosphere of bandied-about numbers, I think "big startup successes" are closer to 1 in 100 than 1 in 10, if not 1 in 1000. If YC is anywhere near 1 in 10, that is pretty amazing. At the same time, I don't think it's fair to hold incubators to this 1 in 10 standard.
I don't know what an incubator is, so I looked it up on Wikipedia where it says that "Successful completion of a business incubation program increases the likelihood that a startup company will stay in business for the long term: older studies found 87% of incubator graduates stayed in business, in contrast to 44% of all firms."
I saw lots of "bullshit" words and other emotional words spewed around Carlson's post, so I think I'll go with the Wikipedia article on this one.
The study referenced in Wikipedia is from 1997, 8 years before Y-combinator which is the first of the class of incubators I talk about in my blog post. I also think the studies are about a different kind of business than the startups discussed in my blog. More along the lines of McDonalds franchises than Facebooks.
However you do bring up a valid point: my blog is just my opinion and worth just about as much as you pay for it. :)
If a company is in an incubator (except for YC), it is because they weren’t good enough companies to raise money the regular way. I have heard this from various industry veterans including VCs and angels. It is a stigma, not a badge of honor.
This is it. And what matters. The people I meet at incubators are, in general, not impressive. YC is somewhat of an exception. About half of YC founders impress me (some highly) and half are in that "really?" category. For other incubators, it's closer to 10/90. It's not that they're young and inexperienced; there are plenty of young people with potential whom I'd hire and mentor in a heartbeat. It's the talent level. Most incubators have a "no one good would be, or stay, here" feel. They're not the big leagues.
The "cool" startup scene is a halfway house for immature 22-32 year-olds that looks sorta like college, enough to prevent the reality shock of becoming an adult and having to show up somewhere in a single-digit morning hour.
At some point, you start to realize that you don't give a shit about "free dinner" (you'd rather eat with family or friends) or nerf guns. What matters are personal success, interesting work, reputation and compensation. These are all highly correlated with joining a good company, not a "fun" one staffed and run by boys.
Even among people who run accelerators, incubators, and other types of programs, there is a lot of debate over where the lines begin, end, etc.
Instead of saying "incubators are bullshit" why not just saying "Doing bullshit is bullshit" since that seems to be the actual point of this post. Don't do unproductive stuff that doesn't actually advance your startup. Great. That advice is just as appropriate for outside of incubator people as those within an incubator.
For example, while reading this article I just kept getting distracted from the actual main point - many incubators just provide low cost office space. Is that bullshit? Many incubators aren't actually accelerators like the author seems to confuse the term with. Is that bullshit?
I remember reading an article from the New Yorker where they talked about making fun of wannabe authors who just sit around and do everything that authors are supposed to do except write. They called this "writering" and it seems like the author is trying to say the same thing about "startuping". Good. But that problem will always exist, regardless of whatever incubator you're in or not in.
So maybe we should focus on the actual problem instead of just blasting a straw man, hoping for clicks?