Peter Relan predicts 90% of incubators and accelerators will fail

Regular readers of The Accelerator Gazette are well aware of the large number of new accelerators and incubators that are launched every week -- we write about a lot of them and we could write about a lot more if we chose to. Does the world really need as many as this? Peter Relan, founder of YouWeb Incubator, in an article he wrote yesterday for TechCruch,  says yes we do, even though he thinks that most of them are going to fail.

His logic is straightforward: a new incubator or accelerator is simply a startup like any other and 90% of startups fail. Ergo, 90% of of accelerators and incubators will fail and nobody should be surprised or alarmed. Failure in his definition is when an incubator doesn't return more money than was put into it.

Relan backs up his thesis a number of ways. For example, he points out that many accelerators/incubators are backing startups that have too little differentiation from the myriad of other startups in the same vertical at other accelerators. In his words, "Many start-ups are just features. They are not products, let alone businesses," and that makes it really hard for them to get funding after the acceleration program ends.

The really interesting thing about his article is that he isn't trashing the idea of more accelerators and incubators. In spite of the fact that a high percentage will fail, we still need them, Relan points out. He says, "With diminished funding and donor pools, public institutions can barely scrape by. So private institutions, like MBA programs, are creating their own programs in fear of becoming marginalized by these incubators. Every region and vertical could benefit from a new business acceleration approach. [...] But why stop at America? The world needs incubation just as much — if not more."

Read his article here: http://techcrunch.com/2012/10/14/90-of-incubators-and-accelerators-will-...

There is no shortage of criticism at the moment about the state of the accelerator/incubator field. Earlier this month we wrote about Lisa Suenen's take on the situation.

Maybe we need (your editor says, perhaps not tongue-in-cheek) meta-accelerators --accelerators that increase the odds of accelerators succeeding. Relan has some thoughtful insight regarding what models are likely to win in the long run. Read his article here: http://techcrunch.com/2012/10/14/90-of-incubators-and-accelerators-will-...