In recent years, there’s been a dramatic increase in the number of accelerators.
Since they’ve become such a popular form of innovation, I wanted to investigate a few of the best that operate with different business models and strategies, and in different sectors, to see what lessons can be learned. The three profiled are R/GA (to my mind, one of the very best and most cutting edge global, digital agencies), Sephora (the powerhouse cosmetics retailer owned by LVMH from France), and SKU, the consumer products focused accelerator from Austin, Texas. Differences in the ways accelerators operate include:
• The stage of development of startups they accept: Must they have been in-market validated, achieved a certain level of sales, or received prior venture funding?
• The sectors they focus on
• The formality, structure and content of the training or assistance
• Who does the mentoring: internal employees or external volunteers?
• Whether the accelerator takes an equity interest, and if so, the level
• The length of the mentorship period: For accelerators, it’s typically around three months.
• Whether the accelerator is part of an existing firm, or stands alone
• The strategic reasons for the accelerators, if part of an existing firm
• Whether or not mentees primarily reside at the accelerator for the three-month period
SKU: The Consumer Products Accelerator
SKU was started as an accelerator in 2011 by Shari Wynne Ressler, an entrepreneur and attorney who has become an important force in the entrepreneurial hub of Austin, Texas. Companies going through the SKU program have intimate access to a community of mentors including Doreen Lorenzo, who has served as President of both frog design and Quirky, Clayton Christopher, who founded and led to significant exit Sweet Leaf Tea, and most recently, Deep Eddy Vodka, and Scott Jensen, who founded and sold Stubbs BBQ Sauce, currently CEO of Rhythm Superfoods. Shari selected the Consumer Product Goods (CPG) sector as the company’s focus because she wanted to support the diversification of Austin’s entrepreneurial economy. She predicted that this could be done by adopting the tech-focused accelerator model to this niche industry and it worked. SKU focuses on turning stellar consumer product startups into rapidly scalable companies. SKU’s greatest startup success story to date was the 2015 sale of EPIC, a line of grass fed animal based protein bars whose founders were SKU mentees in 2012 and was recently sold to General Mills for an estimated $100 million.
Size Of Program (Number Of New Firms Accelerated Each Year) And How Mentees Are Selected
SKU has one cohort/incoming group of up to 10 each year. The companies are selected from over 100 applicants throughout the U.S. and abroad. Criteria include:
• The products be already developed and have some in-market validation
• The products are in a growing or disruptive sector
• The products are or can be extended into a distinct product line/brand company and be rapidly scalable
• The founders have the skill sets to grow the company or bring in the talent to take it to the next level and beyond.
What Mentees Receive
Admitted startups receive 12 weeks of comprehensive training, one-day session each week on a host of topics including:
• Entrepreneurial goals, vision and purpose
• Product concept and market sizing
• Product development and market validation
• Packaging and branding
• Web, trade and consumer marketing
• Channel strategy and sales forecasts
• Finance and accounting
• Legal, fundraising
• Marketing positioning, messaging and partnerships
• Team building
• Sales presentations & pitching
– Additional time spent between mentor and mentee based on need
– A concurrent training program on pitch decks and presentation skills
-Networking opportunities with other mentees and mentors after each one-day session
-Introductions to VC funds, attorneys, publicists, Web developers and other helpful professionals.