We are looking at the problem of starting companies in the wrong way
Serial Entrepreneur, Author, Demand Horizon & Search Expert
The company used to organize around the supply chain.
Now, the supply and demand equation has flipped.
Treatment effect: participants of the 500 accelerators globally show no significant improvement.
Lesson: Demand Horizon with Gerry Campbell
Step #1 The Problem: We are looking at the problem of starting companies in the wrong way
I think we're doing it wrong. I think fundamentally we are doing start ups wrong, we're doing business discovery wrong, we're doing opportunity discovery wrong. We're looking at the problem of how to start companies in the wrong way. This is where I started to ponder, figure, wonder, and come up with a solution. If you go back to the founding of the firm, and a firm is a company and a company has a set of certain characteristics. People get together, they invest and the machine starts to move.
There are arguments about the definition of a company. Is it what's called a nexus of contracts? Meaning a company is just a bunch of agreements that make it work. Is it all about the resources? I don't really know. What I do know is historically is we've always thought about the company as organizing around the supply chain. And the supply chain is, I buy this, I assemble those things, I create this, I have this intellectual property, I assemble a product and I take it to market.
My argument is the thing we've been thinking of improperly is now the supply and demand equation has flipped, so the supply of the thing to sell at the market was used to drive that. If you wanted coffee, you had to pay the price that coffee would charge in the market because supply was more important.
We know most startups fail. People with passion, people with ideas, people with funding, fail. And that's a shame. Billions in capital is lost. Being an angel investor and being somebody on the other side, I look at this and think it's kind of a shame that all this money's lost. Accelerators pretty excited, the world's excited about accelerators where everybody gets together and works really hard and gets connected with the right mentors, and they get connected with the right potential investors.
There's an interesting fact which is as of yet, none of the accelerators out there, and I think there's somewhere around the world there are almost 500 accelerators. Some doing very specific things like agriculture, some doing very broad things like all kinds of technology. There's a thing called treatment effect which is, is the treatment of the accelerator producing a greater outcome than if it hadn't been treated, if those companies had not been treated? And, right now, the answer is no, accelerators aren't doing a particularly good job at helping create new companies.