Video Of The Week: A Discussion Of Accelerators

The economist Ian Hathaway did a public video hangout with Brad Feld this week and posted it on YouTube. They cover a lot of interesting territory in and around the startup accelerator phenomenon.


Comments (Archived):

  1. Michiel

    Ian Hathaway says about Techstars that it is one of the most, if not the most succesful accelerator program in the world.One of the most: agree.The most: disagree. Most succesful is Y Combinator imho.

    1. fredwilson

      it depends on how you measure success, of course. i think Techstars and Y Combinator are the two top accelerator programs.

      1. LE

        There is no question that YC has a much better PR rap going at least in what I have seen and been exposed to.And, importantly, YC has Hacker News. The ultimate brain washing tool. HN supplies not only a constant stream of applicants to YC, but also almost guarantees a future stream of young people and college students who are currently reading HN but not able to apply. From that stream statistically they are able to winnow down and filter the applicant pool, and create a total frenzy of desire simply for the prize of being accepted. Just like a top college does. So it’s a self fulfilling prophecy. Surely you’ve seen the questions which ask “should I drop out of Harvard and attend YC”?I started reading HN after you suggested it many years ago in a post. You blessed it and you were well respected so that completed the assumption of legitimacy in my mind.Here is some of the recent stories on YC:Y Combinator startups have raised $7B with a $65B total valuation; 8 are $1B unicorns…To your point about success this is what the press thinks is “success”.Meet Y Combinator’s New COO…Wow, this place must be really important if Fortune is talking about who they have as COO. And geez, he went to Harvard as well!!.Fake Y Combinator Acceptance Letters Crush Startup Dreams…When the prestigious Silicon Valley incubator Y Combinator launched a fellowship program in July…Oh my god, someone didn’t make the cut for the olympics and they thought that they did..It’s all classic “go for the brass ring” and “this could be the key to your success so go for it” that of course is going to spur people and dreamers on to apply to YC.

      2. Michiel

        I should have said something about that. Thinking of it in financial terms, one could say that YC is the most succesful: 8 unicorns, 65B total value. Paul Graham wrote on HN that YC’s stake in their companies is 2-3 percent. So the valuation of YC’s total stake in those companies is about 2B (before costs of investment). This estimate could be totally wrong of course. Graham wrote the HN comment a few years ago, I don’t know how big YC’s stakes in their Unicorns are, only Twitch has been a (near) B aquisition or IPO, and so on.If anyone has some insights that could make the estimate more accurate, it would be welcome.Fred, any thoughts about other (non financial) measures of success that make YC and especially Techstars the two top accelerators? THX

        1. Michiel

          Addendum: the ≈ 2B figure seems much higher than comparable valuations of other accelerators’ total stakes in their companies.

          1. Jamie Friedrech

            Accelerators will follow the power law, same with companies. The large majority of returns in the accelerator space will go to YC.Very interestingly they haven’t turned down a founder (of the tens of thousands they have) who went on to create a $1bn+ company. That’s pretty amazing.

        2. LE

          As far as what Fred said which was “depends on how you measure success” are we talking about success for the people who operate the accelerator? Or for the entrepreneurs in the accelerator? Or what the press who fawns over numbers and fact and figures think (I fucking hate US News and World Report and they ranked the place I attended near the top in most categories..)So without even questioning your numbers, for anybody thinking about either attending an accelerator or starting an accelerator (part of what Brad was discussing) why does it even matter that YC has 8 unicorns and 65B total value (assuming those numbers are accurate)? [1] Why does it matter if 100 of the companies (made this up) achieved 100 million each in value? Was it the program benefits or the raw stock entering the program? (The Harvard or Ivy League Filter).Anyway, this would be similar to saying that it is good to be an Eagle Scout simply because there are 10 unicorns that have made Eagle Scout.- Gerald Ford- Steven Spielberg- Michael Bloomberg- Neil Armstrong- Stephen Bryer- Robert Gates- Thomas R. Norris(notice the thinning at the end). Who knows how accurate the list is seems like there should be way more names on it.You know who also made Eagle Scout? My wife’s 19 year old nephew. Nice kid and nice achievement however as you can see there are a wide range of people of varying abilities that are able to take advantage of the shine as a result of a small percentage of unicorns.The question is really (and I am not saying I have the answer) what is the complete picture for the average kid who chooses to take the time to become an Eagle Scout or attend YC vs. Tech Stars?[1] I would of course agree that if a particular place is deemed to be “successful” on any basis (even the one you are offering) that there is a benefit. Same as attending Harvard is not all about the education you receive, that’s obvious. Intangibles and party in the head that gets bestowed on anyone who gets to attend that has great and clear benefit. However to throw out the word “successful” on only one metric is clearly not correct.

          1. Michiel

            “Was it the program benefits or the raw stock entering the program?”Great point. They have a big pond: 940 companies. And the question is: how big is an accelerators’ share in the success of their unicorns?

        3. fredwilson

          Where entrepreneurs get the most mentoring and valuable advice and counsel

          1. LE

            Taking the other side of this (why not, it’s fun). Deadpool could be relative to the types of startups the accelerator gambles on. Could be more of a swing for the fences thereby biased to unicorns with a great deal of death just right around the corner.This is similar to top medical centers let’s say. They get the difficult cases. The ones the community hospital chokes on and don’t have the skills to handle. Turf to HUP [1]. Point being that HUP’s survival rate for heart patients (or brain tumors) is not comparable to heart patients or brain surgery (if it’s even done) at a shit local 100 bed hospital. The 100 bed has the easier cases. The top docs at the major medical centers have more of the impossible cases.[1] Hospital of the University of Pennsylvania, a top academic comprehensive medical center.

          2. Michiel

            Thanks. Added Autopsy to my favourites.You can look at mortality rates from more than one side.I often see accelerators stating that X pct. of their companies is still alive, with X being high. This is promising for applicants, whose chance of survival is high, if accepted. But, as Paul Graham wrote in Black Swan Farmng, a high mortality rate could be a sign of the accelerator taking not enough risks, not funding enough good ideas looking like bad ones.

  2. Twain Twain

    THIS is totally brilliant: “Our worst case scenario was that…we’d make some new friends” because it speaks to the heart of what Techstars is about.Immersive education is so true. LEARN BY DOING. Set objectives with specific timelines and expectations. Accelerate time of learning rather than “prognostinating”.I’m SO going to start liberally using, “Stop prognostinating!” (thanks, Brad!)”The best way to predict the future is to create it.” — Abraham Lincoln.”The best way to predict the future is to invent it.” — Alan Kay.And they’re all right.I’ve experienced an accelerator and, on reflection, there wasn’t any way the system I ended up building could have been mentored by them or any accelerator.Invention and inventiveness is almost impossible to mentor.It’s like you can teach someone the techniques of how to draw but that doesn’t mean they’ll become Picasso. There are simply QUALITIES & QUIRKS in inventors just as there are in artists and entrepreneurs that transcend whatever functional techniques can be taught to them and that they can learn.Business models, strategy, product development, customer processes etc. can all be frameworked and guided.Not so invention and imagination. Here, the inventor is the loneliest of all founders and has to master their own madnesses and conquer those previously unsolvable hard problems.Madness = genius + frustrations.Then the breakthroughs happen and Humankind evolves because those inventor(s) can learn at warp velocity and see through their own madnesses.

    1. LE

      Invention and inventiveness is almost impossible to mentor.It’s like you can teach someone the techniques of how to draw but that doesn’t mean they’ll become Picasso. There are simply QUALITIES & QUIRKS in inventors just as there are in artists and entrepreneurs that transcend whatever functional techniques can be taught to them and that they can learn.What you are talking about is creativity. And of course it’s impossible to teach creativity. Either you are inspired and/or have that random thought and then take action or you don’t. You can’t sit down and say “it’s 10am Tuesday I will now be creative”.If it were possible to turn on creativity that easily then song writers and musicians would be able to perpetuate their early successes which were no doubt driven by forces that can’t be turned on or turned off. Poverty. Loss of a loved one. Loss of a spouse, girlfriend or partner. Loss of a job. Accident. Or something positive (that puts you in a manic state, such as elation over winning or some other success. In other words some extreme which turns into the spark that ends up being creativity that leads to the art that they create. (Inventions are a separate issue entirely of course).In the case of people starting companies I think it’s fairly well know that many start when someone identifies a need that they have or a problem that they want to solve and comes up with a solution. [1][1] Of course in the traditional business world it might simply be just recognizing that people eat Italian Food and they think a certain neighborhood would be good for a restaurant of that type. Or someone works for a plumber and decides to go out on their own.. Or an employee see a niche opportunity (think Ross Perot and EDS) and goes out on his own.

      1. Twain Twain

        Here’s to the crazy ones who are accelerated by their own passion to think, do and be different.*…“When you grow up you tend to get told that the world is the way it is and you’re life is just to live your life inside the world. Try not to bash into the walls too much. Try to have a nice family life, have fun, save a little money. That’s a very limited life. Life can be much broader once you discover one simple fact: Everything around you that you call life was made up by people that were no smarter than you. And you can change it, you can influence it… Once you learn that, you’ll never be the same again.” — Steve Jobs.And he’s right.Everything can be changed. Even systems that have been with us for hundreds and thousands of years.Human invention is a great thing.

        1. LE

          I like Jobs and what he has done. But let’s face it he took his “tend to get told that the world is the way it is” to his deathbed in rejecting traditional medicine until it was to late and he died an early death from cancer. Of course in all fairness we don’t know what would happen had he not been so stubborn. But we do know what happened with the choice that he made.And lot’s of shit that young people do is foolish and dangerous and they actually should listen just a bit to older folks who perhaps have seen some bad outcomes from those who have been pioneers. Just to give a blanket graduation speech “follow your passion” inspiration is kind of foolish. Luckily most of this sounds good but ends up being lost when the next shiny ball of advice comes along.Also with respect to “you tend to get told that the world is the way it is and you’re life is just to live your life inside that world”. I was never told that. My Dad (and my upbringing) was always pushing the limits (in a small way) and testing the boundaries of getting away with something. Rules were made to be broken. I was rewarded for getting one over on the man. Maybe it’s a cultural thing. Jobs adoptive father I think was pretty rigid and no match for a kid like Jobs that’s obvious.Everything around you that you call life was made up by people that were no smarter than you.Of course that’s clearly wrong. Of course there are plenty of people that are way smarter “than you are”. And not everybody can do everything “if they try hard enough”.

          1. Twain Twain

            There are an absurd number of extremely smart people in the world and the probability they’re smarter than us is really high. I happen across content all the time where I go, “Bloody hell! That’s completely genius!”Re. foolishness, one of Jobs’ mantras was “Stay foolish.” Often times, when we’re complacent it helps to break out of our comfort zones and shake things up — challenge ourselves to learn completely new things or randomly connect with someone outside our circles.What I take from that particular video is the amazing range of human intelligence and ability to be inspired by. We’re not all going to fit into the same moulds and, of course, Einstein, Ali, Callas, Picasso et al are all one-in-a-billion types.Nevertheless, together, the video and that quote is about the hope and POSSIBILITIES that we can change our own destiny and what we do and contribute to life.I especially love the ending with Picasso because he famously said, “When we love a woman we don’t start measuring her limbs” and “Action is the foundational key to all success.”

    2. awaldstein

      Disagree completely with you on this one.There are those who think that the world is driven by flashes of inspiration. The greatest entrepreneurs and artists I know realize that it comes from focus and flexibility and hard work.Maybe you can’t team genius but you sure can mentor the process of creativity. People do it to me still, i do it with every client I work with–or try to.The master of this is of course Chuck Close.Inspiration is for amateurs – the rest of us just show up and get to work.

      1. Twain Twain

        Thanks, Arnold, I’ll add Chuck Close to “Go see and understand this work.” I completely agree with: “Inspiration is for amateurs – the rest of us just show up and get to work.”It’s a variation on something Picasso said (please see slides).I’ve been working in product innovation since I was 17. Got a job in the labs of a global chemical company and learnt about focus, discipline and process fused with creativity — long before Mgmt Sch and startup sector exposed me to the works of Steve Blank, Eric Ries and others.After spending the last few years inventing and building (designing, architecting and coding) some systems, I can attest to the heaven+hell+purgatory of “THE GRIND.”@domainregistry:disqus wrote about the mania involved in the creative process and how random it can be. It goes something like this:Hey, why doesn’t this exist? Let’s make it, why not!=> Ok, do research and source team + mentors.=> Hmmn…this is going to be harder to do than first imagined.=> Oh what the heck, let’s do it anyway!=> Hey, this is fun. Freedom to explore and create!=> WTF did I get myself into? Go seek guidance.=> Oh, WOW, YAY! I can’t believe I managed to do that!=> F************* S********!!! That doesn’t work.=> Right, FOCUS. GET BUSY & SOLVE IT & SHIP IT.=> Ahhhh…so THAT’s how to do it and where that bit fits into the whole.=> Fantastic. Another N years of this madness.All sorts of chemical highs, depressions and plateaus followed by successive cycles of sparks of excitation and then depression happen.Some people learn to master those humongous waves of extremes while some, sadly, go clinically mad or commit suicide.What the processes, provided by mgmt gurus and artists about their work, share alike is that they say nothing about two key factors:(1.) The mental chemical state of the inventor / founder / artist, aka their emotions and how well they can adjust to those chemical emotions.(2.) Their pre-disposition to drive towards difficult challenges and risks, which is also a form of mania.My experiences are different from Edison’s so my own view is that inspiration isn’t a discrete event which starts at the beginning and then disappears whilst perspiration happens and drives through the other 99%.Inspiration and perspiration happen in continuous cycles and fuel each other.

      2. Twain Twain

        Here are 3 slides that inform me.I stand by my views: “It’s like you can teach someone the techniques of how to draw but that doesn’t mean they’ll become Picasso. There are simply QUALITIES & QUIRKS in inventors just as there are in artists and entrepreneurs that transcend whatever functional techniques can be taught to them and that they can learn.Business models, strategy, product development, customer processes etc. can all be frameworked and guided.Not so invention and imagination.”A person can follow the chemistry+business invention process in Slide 1. However, that still isn’t the same as having the imagination of random flavor ideas (based on prior taste experiences) and then quantum fission+fusing those in our minds whilst putting hands to work to make it a reality.

  3. SamuelHavelock

    An interesting phenomenon in the innovation ecosystem is the proliferation of “technology real estate plays” ie., shared/co/micor-work spaces masquerading as incubators, along with “quasi-accelerators” that hold themselves out to market as (time-gated & mentor driven) classes I have seen first hand do not create the stress dynamic Brad mentioned as key to the accelerator experience. So I thought Brad’s commentary about stress as the driver for the compression of time being part of the magic sauce, very valuable.

    1. Jess Bachman

      There is a lot of bad-faith actors in the space now. I think it comes with the territory with anything that becomes popular.

  4. Richard

    Whoever came up with the name accelerator, really nailed what the value proposition is all about.Tech will always have an imbedded deadline

    1. fredwilson


      1. Richard

        It’s why accelerators are successful and incubators less so. 3 months to nail an investment worthy product (oh, and boil it down to a 5 minute pitch).The only thing I would change is the time, cut it to 6 weeks. 3 month period excludes a lot of talent.

  5. DEREK

    Words in the English language can’t describe what Brad has done for the startup community especially in cities like Jacksonville, Fl where we are working to make it happen with #givefirst

  6. William Mougayar

    I have been involved as a mentor with the Techstars programs in Boston and New York, and it is like a growing and collegial family. The other thing they just added which has a huge impact is the acquisition of UP Global who runs Startup Weekend, Startup Digest, Startup Next, etc.As Brad said, growing geographically is a lot harder than growing in one location (eg YC).

  7. Ana Milicevic

    Brad’s shirt just fills me with joy.

  8. BillMcNeely

    I feel a lot of gems have been hidden away in co working spaces. Some entrepreneurs choose not to “participate in the startup community”.