On May 1, Emma Giles and Vishal Punwani took the stage at Harvard University’s Klarman Hall. The two entrepreneurs—both Harvard alumni, both Khan Academy teaching fellows—had 60 seconds to pitch the idea behind their startup, Sophya. Behind them, teal and blue ribbons streaked across a digital screen. A xylophonist stood by to tap out a “ting” when their time was up.
“We want to be the Spotify of education,” Punwani said. He went on to explain: A student would indicate what they wanted to learn, and Sophya, through a recommendation algorithm, would find the appropriate educational materials. It was the future of personalized learning.
The pitch earned Sophya $25,000.
The event, the President’s Innovation Challenge, marked Sophya’s graduation from Harvard Innovation Labs’ Launch Lab X program, a nine-month-long incubator exclusively for Harvard alumni. It was the second Harvard incubator for Sophya, which had previously completed the Venture Incubation Program.
Now, Sophya is on its third accelerator. Last month, it started at MassChallenge Boston, where it joined more than 100 other startups for a five-month-long program. Through the program, Giles, Punwani, and their fellow startup founders gain access to co-working space, an alumni network of more than 2,000 people, and cash—up to $1 million in prizes and $20,000 in scholarships.
“We’re at the stage where we’re looking for network connections,” Giles said. “Plus, for any startup, the oxygen is money. Money is always helpful. Money on good terms is always nice. Some accelerators, like MassChallenge, are special in that there's a lot of opportunity to win equity-free prizes, cash prizes.”
Giles and Punwani will graduate from MassChallenge on Oct. 24 at the accelerator’s pitch competition. It’ll be their third accelerator graduation, and it might not be the last. Punwani says that several top-tier accelerators have been reaching out to the Sophya team: Techstars, Amazon Web Services, even the prestigious Y Combinator in Mountain View, California.
Right now, the founders don't know if they’ll apply. But it’s nice to have the option.
“It’s possible that we aim for Y Combinator in a little more time, once we feel like the return would be worth the investment,” Punwani said. (Y Combinator takes about 7 percent equity in the startups it houses.)
Sophya’s jumps from program to program are what’s called “accelerator hopping” in the startup world. Startups have their own reasons to apply to accelerator after accelerator—more time to refine their ideas, the need for a crash course in fundraising, access to monied networks—but after a certain point, they often experience diminishing returns, while taking up space that an earlier-stage startup might have otherwise occupied. It begs the question: Who is benefiting from these accelerators?
Here in Boston, we analyzed the most recent cohorts of some of the top accelerators and incubators: MassChallenge Boston, Techstars Boston, LearnLaunch Breakthrough, TiE ScaleUp, Greentown Labs, Harvard i-lab, Harvard Launch Lab X, MIT delta v, and UMass Venture Development Center. At least 14 startups participated in two of these programs—all in the last year alone.
Carezoom: Harvard i-lab and MassChallenge Boston g.Root: Harvard i-lab and MassChallenge Boston Knot: Harvard i-lab and MassChallenge Boston Koldchain: Harvard i-lab and MassChallenge Boston Legacy: Harvard Launch Lab X and MassChallenge Boston Adopets: Techstars Boston and MassChallenge Boston Sophya: Harvard Launch Lab X and MassChallenge Boston Jamber: Harvard Launch Lab X and MassChallenge Boston smoodi: Harvard i-lab and MassChallenge Boston Gencores: Harvard i-lab and MassChallenge Boston Aday: TiE ScaleUp and UMass Venture Development Center AdaViv: Greentown Labs and MIT delta v AirWorks: MIT delta v and UMass Venture Development Center Dexai Robotics: Greentown Labs and Harvard i-lab
Startups might apply to accelerators for the chance at capital and professional development, but for the accelerators, the calculus is different. Many programs, including Techstars, take a small amount of equity in the startups they incubate. Admissions teams there have to think like venture capitalists, says Vinit Nijhawan, the former managing director of Boston University’s Office of Technology Development at Boston University, who has led several accelerators himself. And even for accelerators that don’t take equity, like MassChallenge, Harvard i-lab, and MIT delta v, there’s still a personal stake.
“The motivation of the accelerators, regardless of whether you’re for-profit or not-for-profit, is to be associated with success,” said Nijhawan. “They take startups that have already been in another accelerator because they want to be associated with success. There’s a selection bias.”
There are other biases at play, too.
Daniel Fehder, an assistant professor in the University of Southern California’s Marshall School, studies the role of entrepreneurship programs for a living. He is also a research affiliate with MIT’s Innovation Initiative and has worked closely with MassChallenge. Recently, he used MassChallenge’s data for a case study.
"The people who are benefiting the most are the people who already have ties, who are already in the game."
Two years out of the accelerator, Fehder found, MassChallenge graduates were performing significantly better than their counterparts who had not gone through the program. But when he examined the data more closely, looking at factors like elite education and location, the accelerator itself might be less of a galvanizing force than its leaders would like.
“The people who are benefiting the most are the people who already have ties, who are already in the game, either through education affiliation or how much startup activity was happening in the place where they founded their company at the zip code level,” Fehder said.
“It seems like [the program is] increasing the advantages that already-advantaged groups have, rather than democratizing things. Most of the treatment effects of MassChallenge—not all of it, but the people who do the most well are the groups that already do better than their peers that don't have those advantages.”
To be clear, that’s not a complete indictment of MassChallenge. “They’re very clear that they have high ambitions and are all very smart, but they don’t pretend like they have the answer,” Fehder said. (In a recent interview with BostInno, CEO Siobhan Dullea said as much: “We have to make sure ... to continue working to make sure it’s a welcoming place for entrepreneurs, figuring out where the friction and barriers and keep working at it.”)
Another important thing to keep in mind, Fehder says, is that accelerator programs vary widely in their purpose and design. In a recent paper that is still making its way through the academic publishing process, Fehder and co-authors expand on this:
“Our data suggest that accelerators vary not only in their programmatic features, but also in their founding stakeholders (founding managing directors and sponsors), and thus, in their objectives,” they wrote. “These differing objectives may ultimately drive their selection of portfolio companies, their design choices, and the ultimate performance of their graduates.”
When William Foussier first arrived in the United States, he didn’t know anyone. The French entrepreneur behind AceUp, a platform that enables personalized executive coaching, needed connections.
“I was not even an entrepreneur,” he said. “I was basically a guy, coming from finance and nonprofits, with an idea.”
Foussier began work on AceUp in the fall of 2015. At the time, he had just decided to go back to school. He was living in New York City, taking classes at Harvard remotely. By January 2017, he’d successfully used Harvard Innovation Labs as a springboard to launch his startup, earning him headlines in the Boston Globe and Forbes. It wasn’t until later that year that he officially joined the Harvard Innovation Labs fall cohort, according to BostInno archives.
For Foussier, Harvard i-lab was “the perfect environment.” It was somewhat unstructured, but it still provided access to the celebrated network of Harvard entrepreneurs. It was mainly for early-stage startups, but it introduced their founders to the thriving Boston innovation hub.
Now, nearly two years later, Foussier has a team of 12 and at least a few hundred thousand dollars in funding; jtangoVC contributed an undisclosed angel investment in May.
He has also joined the current cohort of Techstars Boston.
“At Harvard i-lab, it was crucial for me, as a first-time entrepreneur, to really help me embrace the community and find people with whom I would be able to build a team,” Foussier said. “Techstars was, ‘All right, we have this early-stage business, we have a founding team. Now how do we build a structure of advisors, mentors, and resources that will make us a potential leader in the industry for the next three to five years?’”
Techstars contributes $20,000 to each startup it incubates and receives 6 percent equity of the company until it raises a priced equity financing of at least $250,000. Startup founders go through a 90-day, mentor-based program; they get access to office space, accounting and legal support, and a vast network of private investors. Techstars is also one of the oldest accelerators in the area, celebrating its 10 birthday this year.
Plus, it’s exclusive. Each Techstars Boston cohort includes just 10 startups.
Alongside Foussier this year is Susan Conover, co-founder and CEO of LuminDx. Her company leverages artificial intelligence to identify and diagnose skin conditions, disrupting the field of dermatology. Conover also came from another accelerator: MassChallenge, in the summer of 2018.
“I didn’t intend to go through another accelerator when we were in MassChallenge,” Conover said. “Doing that can be a positive signal and a negative signal. I’ve talked to angel investors who are like, ‘The best founders do it on their own.’”
But after she met a Techstars recruiter at a Google Cloud event, Conover realized that might not be true. Techstars, she said, had a “different value proposition.” After a few weeks out of MassChallenge, she decided to apply for the next cohort. A couple rounds of interviews later, LuminDx was in.
Techstars relies heavily on mentorship, meaning that founders get to know other entrepreneurs and investors in that framework. That creates what Conover calls “warm connections;” it also means that founders receive significant guidance.
“You have a lot more experts looking into your business and saying, ‘Hey Susan, this is a problem in your business that you haven’t been prioritizing,’” Conover said. “One of the things that I learned in Techstars that I didn’t understand in MassChallenge was that this industry is all about personal relationships.”
I asked Conover, along with other founders in her position, if she thought her relatively elite education helped her. Conover has a bachelor’s degree in mechanical engineering from the University of Texas at Austin and a master’s in system design and management from MIT. Why turn to an accelerator instead of to prestigious, monied alumni?
“Even in an alumni network, if you email everyone who’s relevant to you in the same city, you’ll get maybe 20 percent of people responding,” Conover said. “But it’s a cold connection. Like, oh, we both went to MIT, we only have so much in common.”
Conover will graduate from Techstars Boston later this year. After that, she’s considering submitting LuminDx for consideration to MassChallenge HealthTech, a targeted program specifically for mid-stage startups in the digital health world. Applications will open in September.
Boston is home to dozens of startup accelerator programs. In part, this is a function of the city’s academic system—Harvard Innovation Labs, MIT delta v, the UMass Venture Development Center, and others are all housed within universities. The robust accelerator ecosystem that results is one thing that makes Boston unique among innovation hubs.
It is also, some people think, what makes “accelerator hopping” almost natural.
Clement Cazalot has been the managing director of Techstars Boston for just over two years. He is also a serial entrepreneur and angel investor; his cybersecurity startup, docTrackr, was acquired by Intralinks in 2014. Cazalot brings a founder’s mentality to the accelerator he runs.
“I don’t think accelerator hopping is inherently bad,” Cazalot said. “But it has to be done with intent from the startup. We need, as an ecosystem, to help founders understand, why would you join an accelerator? And what is the ideal outcome for you at the end of it? Otherwise, accelerators could become a distraction.”
To that end, when he considers applications to his program, Cazalot is more demanding of startups that have already gone through a program. He wants to know what Techstars can do to help those founders—what they haven’t already accomplished through other programs, which, he notes, often have overlapping networks.
"There is no standard journey to get from here to where you want to go."
A Y Combinator spokesperson said nearly the same thing when I reached out to the accelerator’s press team.
“If a startup has previously participated in an accelerator, we dig into the progress they made during the program,” the spokesperson wrote in an email.
Not every startup goes through multiple accelerators, of course. All founders take different paths: They fundraise, they sell, they enter one-day pitch competitions, they even fold. At LearnLaunch, a Boston-area nonprofit that is home to a couple of edtech accelerator programs, co-founder Jean Hammond likes to remind startup founders of that reality.
“There is no standard journey to get from here to where you want to go,” Hammond said. “Some people win a business plan competition, and then they get some friends and family money, and then they get some angel money, and then they're back over to an accelerator, and then they're out to the VCs. Other people, there's some other path through a whole pile of venture debt and a little bit of this and something else. There's no single answer for how to get across.”
Plus, it’s worth noting that accelerators have the potential to provide an extra leg up to nontraditional entrepreneurs. Not everyone can afford to raise “friends and family” funding rounds. And not everyone has equal access to venture capital.
In 2018, according to PitchBook data reviewed by TechCrunch, women-founded startups in the US brought in just over 2 percent of all venture capital. At the time, less than 10 percent of decision-makers at VC firms were women, and 74 percent of US VC firms had no female investors. A separate study from earlier this year found that 77.1 percent of VC-backed founders were white.
These odds are not lost on the founders of Sophya, the educational startup that’s now on its third accelerator. Giles and Punwani, a self-described “brown guy” and a white woman, love the diversity on Sophya’s team—of eight people total, just three are white men—but they recognize what that means for them.
“If going to top-tier accelerators is going to give us an advantage, we’ll take that advantage,” Punwani said. “We can’t rely on the advantage of having a team full of white guys.”
