Getting closer to Startup Reykjavik‘s application deadline, I frequently get asked what kind of ideas or companies should apply to the accelerator.
Many consider an accelerator like Startup Reykjavik the perfect forum for business ideas in their early stages and that the program suits founders well for assisting with incorporation, shape their idea and strengthen the business model. To some extent, they are right.
Yet, my experience with Startup Reykjavik for the past seven years tells me that two kinds of companies or ideas extract the most value by participating. On one hand, it‘s ideas that are well formed and have been worked on substantially, even have been incorporated. On the other hand, it‘s startups and companies that are in operation, (may) have income, and have therefore polished or tweaked their business model like any company needs to do.
So, what is my point? Well, the value in any company is generally highly correlated with „time on task“, i.e. the more time spent on reshaping the business, the more value is created. The evident assumption is that the founders are clever and smart and that they use their time well on developing the product, make their first mistakes, learn from the, etc. By participating in an accelerator, founders receive immense guidance from experienced mentors which are C suite directors, experts in various fields, serial entrepreneurs, investors. The more mature a company is when they engage with mentors, the more value they will extract from them when discussing tangible problems on development, operations, structure, and shareholders.
Relativity, data and comparison with other geographies is an interest of mine. What kind of companies are applying for accelerators? According to data from GAN (Global Accelerator Network), 29% of companies that participate in the roughly 100 accelerators in the network already have income, 70% have a Minimum Viable Product (MVP) or prototype and 54% have paying/nonpaying customers. The development here in Iceland and Startup Reykjavik is that we see the numbers develop gradually more towards the ones above, although we are still somewhat behind.
What does this tell us? Is the perception of Startup Reykjavik amongst founders that the program best suits the idea stage rather than companies in operations? Or do operating companies and startups simply not want to apply?
In my mind, a mix of startups in the ideation stage and more mature ones is the best. It creates a fantastic dynamic environment during the program. Peer support, i.e. how founders support each other during the accelerator (and sometimes post acceleration) is priceless. Cooperation and even friendships take form and the atmosphere often becomes that everyone is on the same team despite working on very different fronts.
Application deadline for Startup Reykjavik is March 27, 2019, and I encourage everyone with a startup, already in business or at the ideation stage, to apply. Finally, for those interested, here is some data on Startup Reykjavik‘s startups so far.