What are the most important ingredients for a promising startup? What do incubators and accelerators look for when evaluating applicants? Is it the business model and the idea behind it? Is it the team? Or is it the traction the startup already has demonstrated by way of sales or investment?
All three matter, but are they equally important? Does one predict success more than the other two? To find out, ID8 Nation took an admittedly unscientific survey of incubators and accelerators and asked them to rank idea, traction and sales in terms of importance.
Fourteen organizations responded. Here are the results:
• Team got 10 first-place votes, 4 second-place votes, and 0 third-place votes.
• Idea got 4 first-place votes, 9 second-place votes, and 1 third-place vote.
• Traction got 0 first-place votes, 1 second-place vote, and 13 third-place votes.
The results were mildly surprising. After all, we’ve all been taught to worship the idea, the blinding insight, the disruptive vision that reorders the universe around it. And don’t sales and outside investment prove the viability of an idea? As for teams, well, teams change, they break up and disband.
To shed some light on the reasoning behind the rankings, we interviewed survey respondents by email. Here’s what they told us:
On why ideas don’t matter as much as you think:
“People have ‘brilliant’ ideas all the time, some of them actually are, and still nothing happens with them until they put the right team together to move the idea into reality. A good team can make a good idea into a great business, but a bad team can kill a brilliant idea easily.” – Annette Zinky, Northern Arizona Center for Entrepreneurship and Technology, Flagstaff
“The biggest reason that idea is lowest is that it changes.” – Teju Ravilochan, Unreasonable Institute, Boulder, CO; Aguascalientes, Mexico; Kampala, Uganda
Coach was right. Team is everything:
“Team is most important as it is the team that will have to navigate all of the challenges of building a business that works.” – Owen Johnson, Betaspring, Providence, RI
“Investors invest in people with proven skills to deliver a great idea to the marketplace.” – Donavon Ostrom, Impact Business Accelerators, Phoenix
On the relative unimportance of traction:
“Traction at the seed stage is never true market momentum . . . so will need to be taken with a grain of salt.” – William Hsu, Mucker Capital, Los Angeles
“Previous sales and investment are definitely a perk, but not as important to our incubator as the other two factors.” – Corinn Perry, SEED SPOT, Phoenix
Thanks to the participating organizations: SEED SPOT, Impact Business Accelerators, Mucker Capital, BioAccel, Rocky Mountain Innosphere, Travel Startups, EvoNexus, Betaspring, Northern Arizona Center for Entrepreneurship and Technology, Unreasonable Institute, Center for Entrepreneurial Innovation, Tipping Point Partners, Arkansas Innovation Hub and reSET Social Enterprise Trust.