With more than 700 now in operation across the United States, small business accelerators are becoming increasingly crucial engines of the U.S. economy.
Startups often need the resources — including the capital, equipment and expertise offered by these organizations — to stay afloat in an increasingly competitive marketplace. As more software, biotech and other technology companies enter the space, the need for accelerators is, well, accelerating.
As such, accelerators have become a critical piece of the puzzle in the developer industry. These organizations helped shape product development for startups who became some of the most well-known and profitable companies around, including billion-dollar unicorns, like Airbnb and Dropbox. The funds and access to top-notch technology that accelerators provide these fledgling companies are crucial to their growth.
And the financial benefits of these accelerators may only be the start of the equation, at least according to Joe Munk, program manager at the Portland State University Startup Accelerator in Oregon. PYMNTS recently caught up with Munk to discuss accelerators, the collaborative benefits they offer and what he sees speeding toward the future.
“We only have one lab, so there are always at least four or five companies working down there, kind of overlapping,” Munk said. “In fact, I think that the real benefit of being part of an accelerator is just the fact that you can bounce ideas off your neighbors or successful companies we work with in the space.”
He said that the opportunities for collaboration and learning that accelerators offer by allowing these young businesses and their employees to work with experts in the field and other quickly growing enterprises could be the best part of what accelerators have to offer.
Working with the big boys
At Portland State’s accelerator, and at many similar organizations around the country, firms have access to a host of resources they might not otherwise be able to use, including access to top-notch labs and technology.
Munk said that he and his team provide companies with rapid prototyping facilities, which include high-priced technology, like 3D printers and laser cutters. This allows startups to utilize this state-of-the-art technology to economically pace up with bigger competitors that have deeper pockets.
Startups in the accelerator also get the chance to meet with CEOs and investment firms to learn what has made them successful, get advice on their growing businesses and possibly secure investments.
“Accelerators provide a lot of mentoring,” Munk said. “We bring in experts on various topics and do office hours, where they can sit in an office with our companies and answer their questions. We also give them access to capital by facilitating connections to venture capital funds and local angel investors.”
Accelerators around the country work to facilitate these kinds of connections for the startups they support. According to data published earlier this year by Fortune, companies in accelerators have raised more than $20 billion in funding since 2005.
While Munk emphasized the practical knowledge that can be gained from meeting with investors and successful companies in the space, he noted that the biggest resource that the 30-plus businesses and 200 employees that work at the accelerator have is access to one another.
Munk said that accelerators like the one at Portland State gather dozens, if not hundreds, of business owners and employees, hungry for success and innovation, in one place. Often, employees from different companies will work together to solve a problem that one of them is having.
He recalled a wearables firm that had been through the Portland State accelerator program two years ago, called ATBM. The company produced wearable technology to help athletes on the United States Olympic Diving Team train for the 2016 Olympics in Brazil. It collaborated with MotioSens, a tech firm with which it shared a lab and office space at the Portland accelerator.
The two companies worked together on gait analysis, collecting and analyzing biometric data to assess human body performance. The pair of local college professors that started MotioSens shared their experience building a gait analysis system for seniors to track whether they had fallen while living at home with ABTM. This then helped them build their own gait analysis products, Munk said.
“Gait analysis is a great indicator of health. If your gait shortens or there’s a big change in your gait, that’s a good indicator that something is wrong,” Munk said. “Both of these companies are monitoring gait in different ways and for different reasons, but they were both able to work together and use similar technology to help the other solve problems as well.”
Collaboration is not uncommon within accelerators. Reports from accelerators, not just in Portland but in other American cities, such as Memphis, indicate that the startups in the same accelerator often work together to hurdle the obstacles that stand before them.
Pedal down, toward tomorrow
Munk noted that accelerators all across the U.S. are a growing part of the tech industry.
The United States Small Business Administration has an accelerator program of its own, which now distributes more than $4.4 million a year. What’s more, the number of accelerator programs around the U.S. has increased more than tenfold in the last year, according to a report from the Kauffman Foundation’s Policy Dialogue on Entrepreneurship.
Munk predicted that the influence of accelerators would continue to grow as software and other technology become even more important parts of the economy.
“It’s starting to come to the forefront,” he said. “I’m excited to see where it goes. There are a lot of exciting things surrounding IoT medtech and biotech and digital security happening at accelerators.”
With the benefit of resources and collaboration offered by accelerators, more new companies could soon be speeding toward brighter futures faster.
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