There are a number of challenges in innovating, both as a start-up and as an established company. Start-ups have great ideas, and the flexibility to work in a very agile way. However, they often struggle to find funding, and their founders, almost by definition, may lack experience of how to run a business. Many young businesses fail because of cashflow problems, rather than any fault in the product or service. It is particularly hard for new companies to make the crucial step from idea or prototype up to delivering at scale.
Bigger companies have different issues. There is usually no shortage of resources there; the trouble is ideas and freedom to innovate. Generally speaking, larger companies suffer more from organisational inertia, which ties them into established ideas and ways of thinking, making it harder to innovate radically. Organisational rules, designed to prevent problems, can also prevent agile working.
There are, therefore, two very different ‘root causes’ of inability to innovate. Increasingly, however, the answer to both is being seen as accelerators, albeit used in slightly different ways.
Support for innovation
Accelerators, like incubators, are ways to grow start-ups and entrepreneurial or innovative ideas. The idea is to unite entrepreneurs with mentors, resources, and support, to help them to grow their business. Most accelerators have an application process, which is typically very selective, and companies are given access for a limited time period, usually three months to a year. During that time, they may be given office space, and have access to business advice, mentorship, and other support. Incubators focus on growing a basic idea into a business, while accelerators take businesses, and help them to move towards delivery at scale.
The original accelerators were very much focused on start-ups. They were usually run by networks of venture capitalists or angel investors, and many grew up as a way for these groups to maximise their chances of successful investment. Increasingly, though, this structure or shape is now broader, and a number of companies have stepped into the space by setting up two main types of corporate accelerator.
The first type is through corporate sponsorship or support of an existing or external accelerator, with a focus on a particular business area. This is similar to the way that companies are now using hackathons: a way to tap into entrepreneurial ideas in the right business space, but without having to change their own business culture and rules. The best ideas can be incorporated into the main business in due course, after they have been tested and scaled. The big disadvantage of this approach is that it is still hard to move towards innovation at scale. There is a big step between what happens in a small start-up within the accelerator, and what can be done within the main business.
The second approach is to set up an internal accelerator, as a way to scale innovative ideas within the business. These corporate accelerators are effectively the next stage after innovation labs, which might be seen as corporate incubators. Corporate accelerators draw on many of the lessons from entrepreneurial incubators, including the importance of a very good network, both within and beyond the organisation, and control of resources to prevent over-rapid development of poor ideas.
General vs. specific
Many of the best-known accelerators are tech-focused, but otherwise quite general. Y Combinator, for example, has funded and supported a wide range of tech start-ups including Airbnb, Dropbox and Reddit. Their alumni provide a network to support each other and future candidates. However, some accelerators are industry-specific, such as Illumina Accelerator, which focuses on genomics start-ups in San Francisco and now Cambridge, UK.
Like any other accelerator, start-ups working with Illumina Accelerator are given access to capital, particularly seed investment, coaching, and office space. However, Illumina candidates also have access to lab space, reagents, genomics databases, and sequencing and genomics expertise. In other words they get both the generic ‘business’ support of any other accelerator, and also genomics-specific support.
The power of the ecosystem
The thinking behind Illumina Accelerator is that no single company can unlock the power of the genome on its own. It is essential to build an ecosystem—and if nobody else is doing it, Illumina is prepared to do so. It is, therefore, effectively both a corporate and an independent accelerator. Investments to date suggest that it is well on the way to achieving its ambition and that segment-specific innovation acceleration can definitely work.
Photo by Rene Böhmer on Unsplash