Incubator vs accelerator - what is the difference?
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The document discusses the differences between incubators and accelerators from a business model perspective, emphasizing their distinct roles in nurturing ideas into viable businesses. Incubators focus on achieving product/market fit by validating the unique value proposition and customer segments while providing necessary resources and support. Accelerators, on the other hand, aim to facilitate growth after product/market fit is achieved, concentrating on scaling, customer traction, and validating other business model assumptions.
Incubator vs accelerator - what is the difference?
- 1. Incubators vs. Accelerators What is the difference? A Business Model Perspective Franki Chamaki Red Garage Ventures
- 2. Pitch AccelerateIncubate Moving an idea into a new business model INCUBATION TO ACCELERATION Stage
- 3. Pitch AccelerateIncubate Idea stage vs. business model canvas INCUBATION TO ACCELERATION Stage Business model Canvas
- 4. ● Lean startup principles ○ Business model validation ● Working infrastructure ○ Internal Job forum allowing staff to join the startup for short assignments, good for fostering corporate innovation cultural ○ External on-demand employees like upwork vs. freelancer vs. fiverr vs. guru site sub site ● Mentor network ● Business model validation ● Funding & reporting governance ○ Quarterly reporting and funding request (i.e. list assumptions to test, and how and when) ● Customer traction. Focus is Product/Market fit ● Articulate the problem, value proposition, plan to scale, why to “back” this team/idea. ● Define the team and founders ● Key milestone, return and fund/ resources required ● SAFE Note - no-loan funding with % rights at raising time on based on funds injected and valuation ● Convertible Note - funding loan with equity rights/terms ● Collaboration Deed - fully funded, wages etc. own IP but specific options to commercialize ● Business loan/Private investors/bootstrapping INCUBATION TO ACCELERATION Pitch AccelerateIncubate Moving an idea into a new business model
- 5. Incubator key focus: “product/market fit”. Its aim is to validate, through experimentation, that the unique value proposition addresses a customer segment(s) and their problem An Incubator’s focus is about ensuring Value Proposition and Customer Segment are validated (e.g. find product/market fit) This means giving it the right resources (i.e. funds, freedom) and mentor/network support to explore the problem area within a set time frame to find the product/market fit Incubator Incubating an idea is like Incubating an egg – you need to ensure you have the right temperature (i.e. sufficient money), humidity (i.e. spend cadence) , turning the egg (i.e. validating the ideas) and environment (i.e. mentor network, office space/ resources) INCUBATION TO ACCELERATION Incubator focuses on 2 key areas of the business model
- 6. Hatching key focus: “Reach more people”. Its aim is find resources (ie money/team or both) to continue growing the customer base and proving “traction” Once product/market fit (i.e traction) has been established, its time to “nurture” its growth by focusing on Channel. One way to do this is access funds, team and a structured program through VCs, Accelerator or Private A pitch is your reason to “scale up”. Its how you going to Channel or distribute your solution to reach more customers. A pitch therefore is a plan on how you going to exploit the Customer Segment with your validated Value Proposition. Learn more about Pitching here Hatching out This is the stage where you have validated product/market fit and need funds/ team to scale your idea by “pitching” your it for funds at a VC, angel investor, an internal or external accelerator, corporate growth board etc. INCUBATION TO ACCELERATION Moving between Incubator and Accelerator, this where Channel is the focus
- 7. This assumes your business model’s most critical assumptions have, to large extend, being proven. You have demonstrated a clear product/market fit and have shown (repeatability) customer traction This is about validating other aspect of your business model – including pricing model, formalizing partnerships, building repeatable process Accelerator A structured approach to accelerate the “testing” of the other aspects of your business model assumptions Accelerating key focus: “Validating other area”. Its aim is continue to validate other important assumptions of your business model INCUBATION TO ACCELERATION From incubating to accelerating
Editor's Notes
- #2: Hello everyone. It’s a pleasure to come here today and to present to you the journey of our ventures. This is actually rare thing we talk about our model as it keeps change. As you can see there are 2 businesses on the slide: Red Garage Ventures and HIVERY. My talk will explain how these ventures comet to being and how Coke helped us along the way. So where do I start? Will, Coke wondered if they could go all the way back to the beginning—before the startup, before the business plan, before the product, even before the idea. They didn’t want to create an accelerator or incubator. They wanted to find a way to truly partner and co-create with proven “rock star” founders. Coke would bring huge assets and global reach – and huge opportunities.” Coke wanted to invent in the PERSON rather than the IDEA. None of us joined with an idea. They wanted to recruit DO’ers! Lets explore the idea of “Coke’s Formula for co-creating with startups.”
- #5: Hello everyone. It’s a pleasure to come here today and to present to you the journey of our ventures. This is actually rare thing we talk about our model as it keeps change. As you can see there are 2 businesses on the slide: Red Garage Ventures and HIVERY. My talk will explain how these ventures comet to being and how Coke helped us along the way. So where do I start? Will, Coke wondered if they could go all the way back to the beginning—before the startup, before the business plan, before the product, even before the idea. They didn’t want to create an accelerator or incubator. They wanted to find a way to truly partner and co-create with proven “rock star” founders. Coke would bring huge assets and global reach – and huge opportunities.” Coke wanted to invent in the PERSON rather than the IDEA. None of us joined with an idea. They wanted to recruit DO’ers! Lets explore the idea of “Coke’s Formula for co-creating with startups.”
- #6: Hello everyone. It’s a pleasure to come here today and to present to you the journey of our ventures. This is actually rare thing we talk about our model as it keeps change. As you can see there are 2 businesses on the slide: Red Garage Ventures and HIVERY. My talk will explain how these ventures comet to being and how Coke helped us along the way. So where do I start? Will, Coke wondered if they could go all the way back to the beginning—before the startup, before the business plan, before the product, even before the idea. They didn’t want to create an accelerator or incubator. They wanted to find a way to truly partner and co-create with proven “rock star” founders. Coke would bring huge assets and global reach – and huge opportunities.” Coke wanted to invent in the PERSON rather than the IDEA. None of us joined with an idea. They wanted to recruit DO’ers! Lets explore the idea of “Coke’s Formula for co-creating with startups.”
- #7: Hello everyone. It’s a pleasure to come here today and to present to you the journey of our ventures. This is actually rare thing we talk about our model as it keeps change. As you can see there are 2 businesses on the slide: Red Garage Ventures and HIVERY. My talk will explain how these ventures comet to being and how Coke helped us along the way. So where do I start? Will, Coke wondered if they could go all the way back to the beginning—before the startup, before the business plan, before the product, even before the idea. They didn’t want to create an accelerator or incubator. They wanted to find a way to truly partner and co-create with proven “rock star” founders. Coke would bring huge assets and global reach – and huge opportunities.” Coke wanted to invent in the PERSON rather than the IDEA. None of us joined with an idea. They wanted to recruit DO’ers! Lets explore the idea of “Coke’s Formula for co-creating with startups.”
- #8: Hello everyone. It’s a pleasure to come here today and to present to you the journey of our ventures. This is actually rare thing we talk about our model as it keeps change. As you can see there are 2 businesses on the slide: Red Garage Ventures and HIVERY. My talk will explain how these ventures comet to being and how Coke helped us along the way. So where do I start? Will, Coke wondered if they could go all the way back to the beginning—before the startup, before the business plan, before the product, even before the idea. They didn’t want to create an accelerator or incubator. They wanted to find a way to truly partner and co-create with proven “rock star” founders. Coke would bring huge assets and global reach – and huge opportunities.” Coke wanted to invent in the PERSON rather than the IDEA. None of us joined with an idea. They wanted to recruit DO’ers! Lets explore the idea of “Coke’s Formula for co-creating with startups.”