It’s inevitable that successive classes of startup accelerators will be compared, and so, with this week’s demo day for the second class of Flashpoint, Georgia Tech’s startup accelerator, I’ve heard countless comparisons to the first class, which I was a part of. So how do you compare different classes from a startup accelerator?
Comparing startup accelerator classes can be as misleading as comparing children. Comparing a class of 9 month old startups to a class of 3 month old startups is as absurd as comparing 9 month old and 3 month old babies. You may think you remember what those 9 month olds were like, but without photos, video, and careful note taking, the comparisons are likely to be wrong. Further, Survivorship Bias means we’re likely to recall the successful survivors of each accelerator class while forgetting the failures.
So what empirical criteria exist to evaluate startup accelerator classes? I would suggest that initial quality of companies entering a class, viability of graduating companies after 6-12 months, and funding outcomes are all plausible metrics for evaluating startup accelerator classes.
Incoming Company Reputation – How hot are the companies even before they start the accelerator? This can be an indicator of the reputation of the accelerator. Any new accelerator will do well to cherry-pick a bit on their first class and pick some known commodities. Success takes time. Picking companies closer to success helps the early reputation of the accelerator. Our first class had local brand-names in Pindrop Security, CodeGuard, RideCell, and SportsCrunch, who had all raised real-deal rounds. The new class’ only known company was We & Co, with some funding in the bank, and a west coast swagger that confused some locals.
Founder Pedigree – I’ll naively examine this from a perspective of previous startup exits. The first Flashpoint class had Pindrop’s Paul Judge as Chairman and a couple of founders with 8-figure exits in their past. This second class has been impressive. 3 companies have founders who have built $100M+ companies, and at least one other company has founders with an 8-figure exit. Flashpoint attracted more proven founders in its’ 2nd class, which is a good thing for everyone involved. Flashpoint attracted more proven founders in its’ 2nd class, which is a good thing for everyone involved.
Survival – Long term viability is not comparable for a newly graduated accelerator class. Few will mention it, but 3 companies from Flashpoint’s 1st class have effectively folded (moving on from an unviable business is a good thing).
Fundability & Exits – 7 companies from the 1st class have more funding behind them (), and 6 more companies are still active without new funding. 6 months from now, we’ll see how this fresh class has done, even though the thriving survivors from the first class will be even more advanced by then, and presumably some of the new grads will have moved on.
Atlanta can be a tough town for young startups. Few graduates from either Flashpoint class have their entire business sorted out. If they did, few of them would be asking for investor money. If you compare 6 month graduates to fresh graduates, the older class looks better. Comparing incoming momentum, my Flashpoint class had a certain shimmer, but the fresh crop has a nice track record. Over the long term, we’ll all help each other succeed.
Some people were harsh on the new graduates. The hard truth for Atlanta critics is that people who have seen Flashpoint demo days AND demo days of other cities have said that our startups are much BETTER both in pitch and in company quality than other demo days (with the notable possible exceptions of TechStars, 500 Startups, and YCombinator). I’m encouraged by the current Flashpoint class teams that are carving out their funding rounds with messages refined in the fire of Flashpoint. I’m discouraged by teams that aren’t seeing as much traction. Most of these teams are chasing big markets with plausible plans hatched from real conversations with real customers, and the willingness to admit when their assumptions are wrong and adjust course. They’re good startups working hard to become good companies. It may take more cycles of creating companies, selling, and reinvesting, but Atlanta should be finding ways for these companies to thrive.