How To Select Startups For Your Program

A Systematic Approach to Selecting Startups for Acceleration Programs

Selecting startups for an acceleration program is one of the most critical tasks an acceleration team undertakes. Despite its importance, many selection processes are influenced by biases and misinformed criteria that can lead to missed opportunities. In this article, I’ll outline a more systematic approach to selecting startups, helping ensure that decisions are made on criteria that matter most.

Evaluating Founders Beyond "Fit In"

A common yet unintentional pitfall in startup selection is the tendency to favor founders who “fit in” with the program. Many acceleration teams lean toward founders who resemble them in background, beliefs, and appearance. This approach stems from a natural human inclination to bond with like-minded individuals, yet it can stifle diversity and innovation.

To mitigate this bias, ask yourself if the founder is a good fit for the specific startup they are trying to build, rather than for the program itself. Are they prepared and equipped to handle the unique demands of their industry? Or are they stepping into territory they might not fully understand?

For example, I once met a team of young founders pitching a space-economy startup focused on building a satellite. They were from humble backgrounds, which, on the surface, could raise questions about their resources. However, my primary concern was their lack of experience in both space engineering and business. Without technical expertise or relevant industry knowledge, it seemed they were more captivated by the thrill of the idea than prepared to execute it. This team wasn’t a good fit for the startup they envisioned and would likely struggle to meet the challenges ahead.

Prioritizing Value Over "Trendy" Tech

In today’s landscape, it’s easy to get excited about startups boasting cutting-edge technologies, especially AI. However, selecting startups based on the novelty of their tech rather than its relevance and value can lead to setbacks.

For instance, I recently spoke with a startup developing an e-commerce platform. They included an AI feature designed to help customers find similar products—a promising idea in theory. Yet, they were behind on this feature's development, delaying their platform’s launch by nearly six months. Upon further discussion, it became clear that their AI component was essentially a search function, far simpler than they portrayed and ultimately unhelpful to their customers. In this case, the AI label added little value and only complicated their roadmap.

When evaluating startups with “sexy” tech, ask how the technology genuinely enhances the customer experience. Will it deliver clear benefits, or could it become an unnecessary burden? Select startups that focus on creating value through customer-centric products, even if they lack buzzword features.

Targeting Market Viability Over Unique Selling Points

While unique selling points can be appealing, a startup’s market viability and growth potential often carry more weight. A well-thought-out product in an expanding market with room for competition is more promising than a groundbreaking product in a saturated or highly regulated space.

I recently met two founders working on home-delivery medicine in a heavily regulated, congested market with unique local challenges. Although they were building an interesting platform, they had limited knowledge of the regulatory environment and the specific market obstacles they’d face. Without a clear understanding of the landscape, they were developing their startup in a vacuum, disconnected from the realities of the business.

For acceleration programs, it’s essential to prioritize startups that demonstrate a deep understanding of their market and industry context. These founders are better equipped to navigate challenges and adapt to changing conditions, increasing their chances of long-term success.

Conclusion

A systematic approach to selecting startups for acceleration programs can help identify the most prepared and adaptable teams. By looking beyond “fit” biases, assessing the true value of technological components, and emphasizing market viability, acceleration teams can support founders who are both capable and committed to bringing genuine value to their customers.

This approach ensures that acceleration programs invest in startups that are ready to thrive in a competitive landscape while delivering meaningful solutions to their target audiences.