Corporate accelerators have become significant interest point in several established industries. The report explains the evolution of incubators, accelerators and birth of corporate accelerators. We envision four failure reasons along with four design pillars of a successful corporate accelerator.

EXECUTIVE SUMMARY

Nearly a decade ago, Marc Andreessen famously said that “Software is eating the world.” He had started his career with Netscape’s success and then became a venture capitalist who eyes new market trends, opportunities in the technology world, and investing. His statement was not related to existing software giants like Microsoft or SAP’s future success on new business. He expected that new value propositions born software startups disrupt traditional industries like retail, banking, services, and manufacturing.

In the last decade, the widespread use of smartphones channeled a medium for new disruption areas and potential markets. Proliferating open source and collaboration tools, easy to access remote drive, application platforms had lowered starting startups costs. Today, a startup is an attractive career option for technology talent, an essential financial return tool for venture investors, and a strategic benefit provider for corporate companies across the world. Marc Andreessen was right; software has eaten the world! We have seen several startups turning into digital giants to create blue ocean markets. We name this journey as the transition from Startup 1.0 to Startup 2.0

Also, between 2010-2019, global venture financing grew nearly fivefold, and new venture finance alternatives like crowdfunding and initial coin offerings emerged.

Another phenomenon in this period was accelerators. Major accelerator programs like Y Combinator and Techstars had produced unicorns like Airbnb, Stripe, and Digital Ocean. In 2018, the number of accelerator cohorts had reached 700 in the world. From Saudi Arabia to South Korea, numerous accelerator programs had spawned over the globe. However, after more than a decade, acceleration seems a game of a few winners who can fulfill essential success factors. Interest for new accelerators is fading. 

All those developments have a significant impact on the corporate venture world. Global corporate venture capital investment increased its share in global venture investment from 16% to 25% between 2013 and 2019. Many companies started corporate accelerators. However, after a couple of years, many of them stopped recruiting new cohorts.  

The reasons for the failure of corporate accelerators were lack of authentic strategy, customized configuration, operational design, and necessary metrics to monitor. We envision four pillars in designing the corporate accelerators successfully.

• Identifying strategic and financial objectives with alignment to the parent company.
• Setting the accelerator configuration to address how to pursue opportunities and locate the accelerator.
• Defining the operational design for elements of the program, end to end processes and organization.
• Determining the short and long term metrics for the accelerator and startups, opportunities.

Four pillars should be in harmony but not to be considered as immutable. As a startup, iteration and energizing the fast learning should be open for the corporate accelerator itself and the parent company.

Nearly a decade ago, Marc Andreessen famously said that “Software is eating the world.” He had started his career with Netscape’s success and then became a venture capitalist who eyes new market trends, opportunities in the technology world, and investing. His statement was not related to existing software giants like Microsoft or SAP’s future success on new business. He expected that new value propositions born software startups disrupt traditional industries like retail, banking, services, and manufacturing.

In the last decade, the widespread use of smartphones channeled a medium for new disruption areas and potential markets. Proliferating open source and collaboration tools, easy to access remote drive, application platforms had lowered starting startups costs. Today, a startup is an attractive career option for technology talent, an essential financial return tool for venture investors, and a strategic benefit provider for corporate companies across the world. Marc Andreessen was right; software has eaten the world! We have seen several startups turning into digital giants to create blue ocean markets. We name this journey as the transition from Startup 1.0 to Startup 2.0

Also, between 2010-2019, global venture financing grew nearly fivefold, and new venture finance alternatives like crowdfunding and initial coin offerings emerged.

Another phenomenon in this period was accelerators. Major accelerator programs like Y Combinator and Techstars had produced unicorns like Airbnb, Stripe, and Digital Ocean. In 2018, the number of accelerator cohorts had reached 700 in the world. From Saudi Arabia to South Korea, numerous accelerator programs had spawned over the globe. However, after more than a decade, acceleration seems a game of a few winners who can fulfill essential success factors. Interest for new accelerators is fading.

All those developments have a significant impact on the corporate venture world. Global corporate venture capital investment increased its share in global venture investment from 16% to 25% between 2013 and 2019. Many companies started corporate accelerators. However, after a couple of years, many of them stopped recruiting new cohorts.

The reasons for the failure of corporate accelerators were lack of authentic strategy, customized configuration, operational design, and necessary metrics to monitor. We envision four pillars in designing the corporate accelerators successfully.

Identifying strategic and financial objectives with alignment to the parent company.
Setting the accelerator configuration to address how to pursue opportunities and locate the accelerator.
Defining the operational design for elements of the program, end to end processes and organization.
Determining the short and long term metrics for the accelerator and startups, opportunities.
Four pillars should be in harmony but not to be considered as immutable. As a startup, iteration and energizing the fast learning should be open for the corporate accelerator itself and the parent company.