Teaching Innovation: Rice Professor Reviews Accelerator Programs

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the number of accelerators, incubators, and other startup-focused programs has bloomed, with seemingly every major metro area sprouting new programs. Nationally, there are the well-known institutions such as Y Combinator and the various Techstars diaspora.

In Texas, a number of accelerators have been launched in recent years, targeting energy (Surge Ventures), biotech (TMCx), and a variety of technology sectors—Tech Wildcatters and Capital Factory, to name just a few. It’s likely too early to assess their legacies but, notably, Surge founder Kirk Coburn announced last September that the four-year-old accelerator would be put on pause and not take on a new class in 2016.

The ever-increasing popularity of such accelerator programs prompted my colleague, Wade Roush, to write that a startup bubble was forming nearly five years ago. What he saw was that the numbers were expanding to the point that there likely wasn’t enough room in the early stage innovation ecosystem to support the dozens of startups these programs were creating (or the programs themselves).

“The more startups that these programs launch each year, the harder it is for any one of them to get noticed by investors, journalists, or customers,” he wrote. “One side effect of this growth is that the time allotted for each company’s Demo Day pitch keeps getting shorter and shorter.”

In 2013, TechCrunch reported that just 27 percent of startups from accelerators were able to secure outside funding in a year. In essence, the publication reported that startups that went through accelerators, and didn’t get investor interest quickly, failed within a year or two. Interestingly, PitchBook reported last week that one-third of U.S. startups that raised a Series A round in 2015 had graduated from an accelerator.

For her part, Hochberg, who also leads the Rice Entrepreneurship Initiative, is not questioning the numbers of programs out there. But, given that they exist, she wants to unearth best practices for educating their startup leaders. “Even if you can’t teach them the material in a deep way, you can teach them what they don’t know,” she says.

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Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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