The startup pre-accelerator gap, oddly enough, a lot like bitcoins.

If you’re up with the tech times, you have for sure heard of Bitcoins. These are encrypted virtual coins that can be ‘mined’ by having some simple software on your computer solve complex algorithms. The funny thing about this virtual currency is that there are pre-determined limits to how many coins are mined within a specified period of time. In simple words, the more people/computers there are mining these coins the harder the algorithm becomes, thus stabilizing the expansion rate of the currency overall. (Hah, if the Fed actually this something like this, oil prices would be down at least 60%).

So what do Bitcoins have to do with startups and what I call the ‘startup pre-accelerator gap’? In simple terms, the more there are of them, the harder it gets for any one of them to get help and thus succeed. Having a great startup team and a killer idea is no longer good enough: new startups must demonstrate specific traction in their field of focus, as well as some very big picture and long-term planning that is hard to come by without some mentorship help.

The incredible number of applicants at accelerator organizations is a perfect example of how the difficulty is increasing in the startup space. A few weeks ago I spoke with Brad Feld, one of the founders of TechStars, an incredibly influential and respected accelerator program. He shared with me that over 1,200 applications had come in for TechStars NYC program—that is 1,200 applications for only 10 open slots, or about an .00833% acceptance rate!!!

The technology startup scene is an exciting one these days. And while many are calling it a bubble, and are quite right for doing so in view of the disastrous decisions of the last tech explosion in the late 90’s, the fundamental weaknesses “enjoyed” back then are simply not here anymore. If anything, the increasing difficulty for startups to get funded or even accepted at accelerator programs is ensuring that the quality of ideas and teams is maintained to a certain degree. Of course, as a generally glass half-full guy, I believe that far more awesome teams and ideas are out there than the limited resources on the startup accelerator scene can handle.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s