Kickstart Accelerator: Are accelerators of any use?

Tonight will be in Zurich Kickstart Accelerator launched, and it started last week first batch the Swiss Start Up Factory with six projects. Reason enough to take a closer look at the latest hype in the Swiss startup scene.

About four years ago, countless incubators and accelerators sprouted up like mushrooms in Germany. In the meantime, most of them have disappeared again because those responsible had to realize that setting up and supporting companies on an assembly line is not that easy. This can also be seen in the fact that you can count the really successful incubators worldwide on one hand.

Swiss Start Up Factory with an unattractive deal

The trend arrived late in Switzerland. The Swiss Start Up Factory was founded as an incubator a year ago. Last spring I saw the SSUF positive. In the meantime, the Start Up Factory has transformed itself into an accelerator and no longer sees itself as a company builder, but instead supports young companies in a structured program for three months.

Unfortunately, the Start Up Factory has its share in the start-up scene Terms (CHF 15,000 in cash plus CHF 35,000 in benefits for 10% of the shares) despite their omnipresence Pretty much all the credits were lost. My theory is that an unattractive deal only attracts second-rate founders. The really good ideas either go to a top incubator like Y Combinator or are not even dependent on such support because they are financed by excellent VCs. This is unfortunate, because private initiatives in the ecosystem are very welcome.

Kickstart Accelerator relies on the ecosystem

The Kickstart Accelerator (not to be confused with Kickstarter!) is from the Kick Foundation (which also works together with the IFJ Venture kick organized) and DigitalZurich2025 and can therefore count on broad support from business and politics. The accelerator is led by scene greats Sunnie Groeneveld (see also the Post on her blog), Dominik Wensauer and Nico Luchsinger. The mentors are also prominent, for example Marc P. Bernegger and Adrian Bührer support the founders. It's a bit of a shame that there are no fresh names on the list. I'm thinking, for example, of Christian Reiter, who sold his first startup to Google, or Andreas Brenner, who with Avrios has completed a financing round with top investors. Their experiences and learnings would certainly be of great added value for the participants.

The first batch of the Kickstart Accelerator starts in the summer with startups from the areas of Food, Smart & Connected Machines, FinTech and Future & Emerging Technologies. The aim is to attract foreign startups in particular, which can quickly access the existing Swiss ecosystem (universities and corporates) via the DigitalZurich2025 network.

What is particularly interesting is that the Kickstart Accelerator does not require any shares for up to CHF 25,000 in seed funding plus a monthly CHF 1,500 “stipend” per founder, which sounds like a very fair and interesting deal for new founders. This initiative is certainly good for Zurich as a location and is very exciting.

Foreign accelerators are also looking for Swiss startups

But it's not just Swiss accelerators who are looking for interesting projects; American organizations have also put out feelers in Switzerland - thanks to ETH. Plug and play recently has a Swiss employee who is actively looking for local startups for their programs in Europe and the USA. This is of course very exciting for Swiss founders, after all, companies like PayPal and Dropbox were also at Plug and Play in Silicon Valley.

IFJ and CTI Start-up: The classic supporters

In addition to the new phenomenon of accelerators, there are of course the classic players like that Institute for Young Entrepreneurs or CTI start-up of the federal government and are reliable constants in the startup ecosystem. The IFJ organizes various events, business plan competitions and courses that are very useful for founders. Unlike an accelerator, coaching does not take place in a concentrated manner for several months at a time, but rather selectively with focused courses. The coaching at CTI Start-up is similar, but is only offered to qualified high-tech startups. Depending on the situation, it may make sense to take part in such a program.

At Axel Springer Plug & Play in Berlin

Stefan Steiner, Managing Director German-speaking Switzerland at venturelab of the IFJ, says quite rightly: “There are now more support organizations than good startups.” Therefore, there is a risk that even less good startups will benefit from the current startup and accelerator trend, be dragged along and only fail later if they cannot find follow-up financing. The dispute between Startups.ch and the IFJ two years ago hard bandages was conducted, proves that coaching providers can apparently also earn good money.

What do early-stage startups really need?

The accelerator offers are diverse. Free jobs are often advertised. That's nice and USM furniture also gives a corporate charm, but I maintain that an early stage venture doesn't need its own offices. A workplace in a library, meetings in a café or at a founder's home are all sufficient at the beginning. This type of pain is part of the founding phase; You'll think back on it later with a smile. In addition, stories à la Google's founding of a garage, if successful, are also a nice hook for media reports.

Each accelerator hosts a demo day at the end of the cycle. It's easy to imagine how many Demo Day invitations a professional VC receives - and how they use their limited time. He's definitely not flying to Zurich to an unknown accelerator. The usual suspects who can be found at every startup event and never invest anyway fill the empty seats. The consequences are foreseeable: Despite the successful completion of the batch, the startups do not receive any follow-up financing.

But what do startups really need in the first few months - or to put it another way: What does the optimal support program look like?

Cash: The burn rate has to be low in the early stage, but product development still costs money and the founders' bills don't pay themselves. The cost of living can be significantly reduced even in Zurich, but a small salary should still be possible for the founders. That's why I think CHF 25,000 is good seed funding.

Fair review: As a rule, the accelerator requires equity for its services. The offer should be fair for both parties; In my opinion, CHF 15,000 in cash for 10% is unattractive, as that corresponds to a valuation of only CHF 150,000 (of course it can also be that this price is justified - but that would speak less for the selected business ideas...). Ultimately, every founder has to know for themselves at what valuation they are giving away their first shares. The supporters would do well to show a certain flexibility with the shares in order to be able to better respond to the milestones achieved.

Tailored support: Support should be selective and tailored to the startup. What good is a workshop at a luxury goods manufacturer for a hardware startup? Probably relatively little; In addition, the founders lose valuable time. That's why the founders should be able to rely on the accelerator's network where it actually makes sense. With the right know-how and good experience reports, a young company can make faster progress.

Good mentors: Quality comes before quantity. The more coaches have a say, the greater the likelihood that one wrong advice gives. That's why the mentors should be founders themselves (the experience of a top manager is probably of little use to an early-stage venture) and, above all, should still be entrepreneurially active. Strategies and best practices change too quickly; outdated strategies are highly dangerous.

Courage: If you really want to be disruptive, you need courage and foresight for big ideas. In Switzerland, visionary founders were unfortunately often trimmed down to SME level in the classic coaching programs so that the risk is reduced so that the oh-so-beautiful success statistics (in Switzerland, 90% of startups are said to be successful - in Silicon Valley it is exactly the opposite: despite the world's best investors and founders, only 10% make it...) is not tarnished. In order to be able to work on a really large market, you have to take a big risk.

I'm pretty sure that not all accelerators in Switzerland survive, especially those with a less attractive offer or financing problems. What do you think? Is it worth participating in an accelerator program? Are startups more likely to be successful after going through? I look forward to comments or shares on Facebook and Twitter!