Surviving as a startup was tough enough without the added burden of navigating around a global pandemic. Most businesses have either completely shut down or scaled back to a barebones working model in the hopes of riding out the storm.
However, this is a self-defeating strategy because it operates on the presumption that the business landscape will somehow return back to a pre-pandemic ecosystem at the flick of a switch.
Instead, aspiring entrepreneurs backed by accelerator startup programs are starting to find ways around the obstacles due to COVID-19 and become more profitable. The big question is,
How are accelerators helping startups move forward?EdgeCollab has been identified the following key reasons why the role of accelerators has become even more in the Toronto startup scene.
Accelerators provide support across a wide spectrum of business areas and apply the right tactics to deliver a startup’s objectives, including investments. They also provide access to a robust, skilled, and experienced team supporting the venture from the get-go. All these tools can act as a safety net against the pandemic.
More importantly, accelerators connect startups with industry-seasoned mentors who can help bypass hurdles that entrepreneurs may not see but can significantly hamper their growth. Accelerators provide connections to mentors, other founders, and potential investors that put startups on the fast track towards growth, cutting the growth time from several years to mere months.
In the context of COVID-19, most accelerators are pivoting more towards tech start-ups than brick-and-mortar businesses. Accelerators identify the innate risks to the startup’s growth in its niche in terms of product/service selection, quality, marketing, sales, competition, and funding. It then tweaks the programs to eliminate possible risks and clearing the road to success.
In fact, in 2010-2015, Canada placed sixth worldwide by virtue of its AI patents. As a result, over $1.3 billion in funds have already been raised for AI research and development in 2016-2017.
The biggest issue with startups is that they have a harder time finding investors and clients at the start of their journey, when they need cash flow the most. In such scenarios, accelerators can jump-start the process by leveraging their network of key people – investors and clients alike. This helps a startup better identify the needs of their audience, gain more business, and if possible, attract funds through forged contacts in the investment community.
Most accelerators are able to reduce the cost of launching a startup by as much as 50% while also providing critical mentorship, business connections, and funding support.
Accelerators can drive meaningful community engagement programs for small businesses, which not only helps the community but also helps the business with its branding and recruitment efforts. Accelerator-initiated events also provide an opportunity for third-party vendors and clients to get connected with their network of startups and form strategic connections, thus providing additional outlets for cash flow into the startup.
These community events provide a platform for founders to exchange ideas and insights with like-minded flow entrepreneurs. This one-of-kind exposure creates more experienced and robust teams that can withstand any crisis – including global pandemics.
Learning is a big part of growth for startups. Yet most ambitious entrepreneurs do not have the insider knowledge needed to navigate a challenging business ecosystem, particularly at the onset of a crisis (such as pandemics). By partnering up with an accelerator program, entrepreneurs can gain access to insider information from skilled mentors and managers.
All this concentrated information allows startups to speed up what they are doing with their plans. Instead of spending years acquiring this knowledge, startups can leverage all this accumulated wisdom in one fell swoop, resulting in the generation of profits quicker than their competition.
Agility is the ability to swiftly adapt to a changing economic landscape. This is one area where emerging startups hold leverage over more established players. In this context, accelerators can help startups pivot quickly, shut down projects, reorient toward real profits, and even switch to a completely different business model.
By contrast, larger companies are more resilient to change since they have more processes and networks to deal with. For example, faced with the coronavirus-induced drop in funding, many fintechs quickly launched new software and solution as they identify new opportunities.
Accelerators are helping startups weather the COVID-19 crisis by switching over to a more online platform to meet investors. While meeting people over Slack or Zoom isn’t the same as sitting right across them at an intimate dinner, they can still take advantage of virtual access. Now they can meet investors from around the world instead of keeping their meetings strictly regional.
It is worth mentioning that working remotely isn’t anything new to small businesses and startups. They are less vulnerable to the changes brought about by the pandemic: so working without an office isn’t exactly a problem for these business models because if they have pivoted to online channels.
In this respect fintech companies specializing in digital payment solutions are enjoying the greatest success in the new landscape. The pandemic will act as an impetus for the wider scale adoption of digital payment solutions in areas that have seen less penetration. In the same vein, startups that operate in tourism or entertainment will suffer the most unless they find an online means of success.
First-time founders often have a hard time looking beyond the first few months to several years into the distant future. They lack the vision needed to grow in both short and long terms. Accelerators often have access to this visionary understanding that most first-time founders do not.
The network of mentors in accelerator programs can help you identify problems that can develop in time and prepare you to deal with them. Then these mentors can suggest tools and tactics to get around these hurdles.
Failure is an inevitability for startups. It can be demotivating and demoralizing to first-time founders not used to disappointment. And this can seed enough self-doubt for founders to give up their ideals. By working with an accelerator program, a founder can share the burden of their failure with their mentors.
Industry-seasoned mentors, in turn, are resilient in the face of failure since this isn’t their first rodeo. As a result, mentors can continue to motivate founders and help them overcome their roadblocks with confidence.
Mentoring is one of the most important services that accelerators provide for startups to grow. In the coming years, Toronto will emerge as one of the most important innovation hubs with a global impact as they funnel billions of capital investment into promising startups of tomorrow.
EdgeCollab is an accelerator in Canada that closely works with regional and internationals startups alike. We are pioneers in helping startups scale globally from Toronto.
Is your tech startup ready to grow? We are always accepting new applications for our Accelerator Program.