Tony Peacock recently attended the launch of the APEC Accelerator Network in Taichung, Taiwan. He reports here on how Business Accelerators are helping tech start-ups speed up business development.
It has never been easier to start a company. Accelerators are a pressure cooker environment to rapidly develop an early stage start-up business. Through shared work space, peer support and intense coaching, young companies can get themselves into shape for investment – or they might decide as a result of the acceleration process to fail early and move on.
Accelerators are popping up around the world, many of them concentrating on digital companies, hoping to discover or nurture the next Google or Facebook. Usually a group of companies – or ideas for companies – will go through a two- to six-month intensive program of business development to test whether their product and business model has wings. They might share lab or work space and even sometimes live in dormitories and pull overnight “hackathon” sessions, and the like, to break through to new levels of development.
Technical, legal and marketing support will be made available to the teams during the acceleration period. Most importantly, they’ll be exposed to coaches who have founded businesses themselves. A mentor or mentors are assigned. A number of accelerators are funded by successful entrepreneurs or networks of entrepreneurs who might provide angel funding to the teams under acceleration. Of course, they get first look at how the team and product develops and may choose to make further investments.
The culmination of accelerator programs is a Demo Day where the teams show off their business to potential investors. There is an obvious advantage to networking to maximise the chances of matching businesses with the right investors and to learn from shared experiences. Taiwan has taken the lead with APEC to develop and launch the APEC Accelerator Network. Any Australian groups with an interest are welcome to make contact through the CRC Association.
Although it is easy to imagine accelerators as just groups of geeks getting guidance, in fact they can take many forms. At ITRI, Taiwan’s equivalent of CSIRO, some 72 companies are currently in residence at their Hsinchu campus incubator. These companies can be onsite for up to four years and have access to ITRI’s 5,000 staff, equipment, labs and legal and intellectual property support. A selection of these companies can now seek to enter ITRI’s TechVenture Club and undergo the acceleration process. ITRI supports them and helps seek out investors. Each quarter they hold major TechVenture events concentrating on particular global markets.
Taiwan’s universities are rapidly expanding their accelerator and incubator programs including shared workspaces on campuses. Students completing their degrees are choosing to use the programs to develop their own businesses rather than immediately joining a corporation.
The intensity of effort and enthusiasm to develop new businesses in accelerators is quite inspiring. Without exception, accelerators at the APEC Forum named culture as their number one issue. The need to be market-facing and attuned to customer or industry needs was a refrain that you might hear at a gathering of Cooperative Research Centres. Although CRCs only use start-up companies as a relatively rare mechanism, the issues identified as important for accelerators had wide similarities to those faced by CRCs.
It was fascinating to hear the Taiwanese and others from advanced manufacturing sectors speak about the economies of the future. Whereas the debate in Australia has recently centred on maintaining large manufacturing in the country, there was almost excitement about moving from a manufacturing economy to a service economy at the APEC meeting. Many heavy industries have shifted to China. Taiwan’s industry is continually trying to move to more advanced manufacturing. Indeed, the student protests still going on in Taiwan, are due to the signing of an exchanged services agreement between Taiwan and China. The students fear for their future jobs if services are too heavily outplaced to China.
All accelerators nurturing companies at the APEC Forum were concentrating on global markets (with the exception of Fantasystory, an accelerator in Taichung that provides an old street market space for unique creative companies). Given the similarities in aims and experiences, there is a great case for networking and cross fertilisation. In many ways, CRCs meet the aims of a business accelerator and there are likely to be opportunities arising from developing our contacts with the APEC Accelerator Network.
Tony Peacock travelled to Taichung as a guest of the Science and Technology Division of the Taiwan Economic and Cultural Office and the Centre of Industry Accelerator and Patent Strategy, National Chiao Tung University