When it comes to being a successful entrepreneur, having a great idea backed by limitless drive is only half the battle.
To have any chance of becoming commercially viable, today’s startups also have to focus on customer development, technology validation, product design and testing, identifying and connecting with the right target markets, and financial management.
It’s not easy, and only the fittest survive. But initiatives like the Wisconsin Economic Development Corporation’s (WEDC’s) Seed Accelerator Program are providing dozens of startups with the kind of support that gives them a better chance to achieve long-term success.
“Many of Wisconsin’s most iconic companies–and its largest job creators–began as modest entrepreneurial ventures,” says David Volz, who oversees the program for WEDC. “The state has a significant interest in the development of innovative new businesses for the purpose of long-term economic growth. This program supports entrepreneurs in shaping their ideas into thriving businesses—primarily in high-growth technology sectors—through the unique resources that are provided in the accelerator model.”
Under the Seed Accelerator Program, WEDC provides matching grants to organizations that establish unique, not-for-profit programs that provide intensive training, mentoring and financial assistance to a cohort of entrepreneurs for a specified period of time, typically 10 to 12 weeks.
Programs can be aimed at a specific industry, geographic area or other common tie. With this approach, participants not only learn from the experts who oversee the program, but also from experienced mentors and from the other peer startups working alongside them and sharing common experiences. For example, participants in Business. Research. Entrepreneurship. In Wisconsin. (The BREW), a seed accelerator overseen by The Water Council, are all water technology businesses that spend their time in the program working in a dedicated space at the Global Water Center in Milwaukee.
Sunit Mohindroo, one of the co-founders of WatrHub Inc., which just graduated from The BREW, says the insights gained by working side by side with other water technology companies was invaluable.
“The cohort that we were part of was incredibly talented and hard-working,” says Mohindroo, whose company uses data and analytics to match water technology companies with potential customers. “Learning from each other is not only useful, but vital if you want to avoid pitfalls and accelerate your growth. Some of the best ideas that we generated together were outside of regular business hours as we worked hard into the late hours.”
Dean Amhaus, president and CEO of The Water Council, says The BREW and other seed accelerator programs provide startups with the insights, training and networking needed to tackle the overwhelming challenge of creating a successful business.
“It’s a monumental task for entrepreneurs and startups to succeed on their own, due to a lack of access to vital resources, including capital, mentoring, business training and networks,” Amhaus says. “Seed accelerator programs provide the missing link to enable these companies to strategically grow in a concentrated, connected and nurturing environment.”
WEDC allocates about $1 million annually for its Seed Accelerator Program, which has funded nine separate programs throughout the state. So far in 2015, three new programs have been launched: CouleeCO.STARTERS, a nine-week program for entrepreneurs in southwestern Wisconsin; Launch Box, a 12-week program headed by Gateway Technical College in Racine; and WERCBench Labs, a 12-week program for startups in the energy, power and control industry that is overseen by the Midwest Energy Research Consortium.
Volz, who is WEDC’s director of entrepreneurship programs, says a key component of the seed accelerator programs is the use of Lean Startup principles, which force entrepreneurs to test their assumptions by making contact with customers and gaining valuable insights that ultimately shape and refine not just their product, but their entire business model.
“With Lean Startup, an entrepreneur may find the original idea validated, but oftentimes these discoveries require a shift toward a more viable revenue-generating business model, and away from a costly and time-consuming failure,” Volz explains. “In addition, these programs provide highly valuable feedback and guidance from experienced mentors, instruction on pitching their business to potential investors, a small amount of seed funding and other amenities.”
Anne Smith, co-founder of Madworks, a Madison-based seed accelerator, says such programs are crucial to providing entrepreneurs with the key networking connections they need to be successful.
“Accelerators can serve as a bridge between entrepreneurs and the broader entrepreneurial landscape, including potential customers, investors and peers,” she says. “Without these seed accelerators, companies can ping-pong back and forth between a variety of resources available, receiving good but unfocused advice as they try to move forward.”
For WatrHub’s Mohindroo, participating in The BREW was, in some ways, like going back to the classroom.
“Seed accelerators are really like mini-MBAs in my mind,” he says. “They help you get access to networks that will help you thrive if you seize the opportunities, and the curriculum provided adds structure to the process, which is a must-have for first-time entrepreneurs or business owners.”