Acceleratorosis
Arlen Meyers, MD, MBA
President and CEO, Society of Physician Entrepreneurs, another lousy golfer, terrible cook
Certain events are memorable in a (bio)entrepreneur's life. Certainly, life events, like getting married or the birth of a child, rise to the top. However, career benchmarks like getting accepted to college, medical school or graduate school is usually on there too. Now, add another one.
Getting accepted into an accelerator is the new MBA. In some instances, particularly for health, wellness and medtech, it is almost harder than getting into Wharton.
But, like an MBA, is it worth it, particularly when it comes to biomedical and health entrepreneurship? Some things to consider:
1. The outcomes are imprecise and difficult to measure.
2. Accelerators attempt to create value at different levels. Most stress value to the firm or investors. They should be stressing value to the patient in the form of improved quality, reduced per capita cost and improved patient experience. They also have a short term, not long term, perspective.
3. Few, if any, conduct clinical trials to validate safety and efficacy.
4. Most do not have a structure that accommodates the schedules and time demands of doctors.
5. Business models vary. In some, you have to give up equity. In some, you have to pay to play.
6. They are typically not suited to launch medical device companies that are 510(k) ready, although there are several exceptions.
7. Big Device and Big Digital are increasingly sponsoring them, looking to develop and incubate upstream innovation.EyeFocus , for example, is sponsored by Bayer and Zeiss.
8. Acceleration is a global phenomena. According to the National Business Incubation Association, 25% of their members are non-US based.
9. Like business schools, there are those that have a top tier reputation, and then there are the rest.
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10. Accelerators have become almost commoditized, with every major regional economic development agency including one as the sine qua non of any innovation district.
As both an entrepreneur and venture capitalist, I have personally witnessed the advantages of the venture studio model—which led me and my partners to establish Boosty Venture Studio. Unlike traditional incubators or accelerators, which typically focus on one company at a time, venture studios leverage their resources and experience to launch multiple businesses in a shorter time frame. This approach allows for greater efficiency, economies of scale, and the potential for cross-collaboration and data exchange among the studio’s entities.
According to a recent analysis, we need scalerators now more than ever, since while the number of new businesses created since the Great Recession is increasing, the number that reach scale are not those that do hire fewer employees than in the past.
Getting an idea to patients means you need to Fail it, Nail it, Scale it and Sale it. Each step takes different focus and competencies. Scalerators can help.
Even more, we need euthanators to kill bad ideas early and often to stop wasting valuable time and resources.
The world is becoming full of accelerators (-osis). Some are full of value. Too few document added value to patients. Too many are full of themselves.
Arlen Meyers, MD, MBA is the President and CEO of the Society Physician Entrepreneurs on Substack
Master of Client Growth for Investment Capital
1 年Great article, Arlen. As faculty and lecturer for several accelerator programs, I can attest to one real value of these activities: they occasionally introduce entrepreneurs to capital sources they wouldn’t otherwise get in front of. VC execs just don’t have the time to look closely at every prospect that comes by. But, if they sponsor or participate in running an accelerator, there is a much greater chance for meaningful contact with enrolled companies. I know several examples where this attention through an accelerator has led to investment that might otherwise have been untapped.
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1 å¹´I have found too many incubators and accelerators are simply screening systems for angel investors. Like pitch events, angel investors commonly lack the skills, training or experience to pick the 'winners'. They look to incubators and accelerators to help them in this effort. Since angel investors only fund less than 2% of the deals that are pitched, it raises the question of whether participation in an incubator or accelerator truly adds value to the startup business if an investor is all you are looking for. The services of the incubator/accelerator need to be studied and assessed to determine if any value is given that the small business could not obtain on its own. A quick metric I use is asking how many (percentage) of the businesses in the incubator/accelerator are serial entrepreneurs. I commonly find this number is zero because experience will tell you that you can get most, if not all, of these benefits elsewhere and at a lower cost.
Nothing sadder/more heartbreaking than an inventor getting married to a bad idea.
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1 å¹´Thank you for sharing