Catherine Eibner | StartupSmart
Recently, the NSW government announced its new offer for $190 million Jobs for NSW. As part of that, I noticed a growing trend to use the terms ‘incubator’ and ‘accelerator’ interchangeably.
Although I can understand why people do get them confused, I recently presented to senior members of major Australian and New Zealand universities on the distinct differences between the programs, as well as some tips on how to measure their success. Here are the key points from that presentation.
THE STARTUP LIFECYCLE
Before you can go deep into understanding the variances between an incubator and an accelerator, it is important to understand the lifecycle that a startup founder tends to go through. I’m a big fan of the Startup Commons diagram listed below:
At the early formation stages, there is normally one person with an idea – hunting around to find problem/solution fit (do people have the problem and how could you solve it?)
There is also an element of identifying and recruiting the missing team members they need to build out their initial idea.
Next we look at the validation stage where Lean Startup methodologies squarely fit. This is where the focus largely relies on locking in product/market fit (building the right product for the right customer).
Only once the formation and validation stages have been completed is a startup ready for growth or to Scale Up. This is when they take the early traction they have to date and look at applying it in new markets or geographies to reach rapid scale.
From then on it’s all world domination.
So with those stages in mind, let’s look at the differences between an incubator and an accelerator.