Technology accelerator centres in North America are becoming popular enough to scare well-established corporations into giving them credence, according to directors of the startup development programs.
At the Canadian Innovation Exchange Nov. 27, a panel of technology accelerator partners and managers discussed the recent surge in the number of such centres recently. Extreme Startups managing director Sunil Sharma moderated the panel of three. After running his Toronto-based accelerator for just nine months, he’s seeing interest from investors who see an opportunity to recruit talent. Five of Extreme Startups’ backers are looking to recruit talent for their portfolio companies, he says.
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“Talented developers are a very important commodity,” Sharma says.
Rocketspace, a San Francisco-based accelerator for tech and media firms, opened its doors in February 2010 and is now seeing 110 applications per month to its program, all from companies that have received seed funding. The accelerator doesn’t take an equity stake in the firms it hosts in its co-working space for its six-month program, says Duncan Logan, founder and CEO of Rocketspace. It will soon be expanding its floor space offered to startup, with a move likely next year.
“The bigger the space, the more we can hedge the risk,” he says. “If you’ve got 200,000 square feet, you can put a couple of long-term tenants into 30,000 square feet and hedge your business.”
Rocketspace already receives 100s of applications for its cohort after being open less than two years.
Larger companies are becoming more aware of the negative brand hit they could take if they try to swoop into the startup scene and steal good talent, Logan says. Enterprises are becoming more supportive of startup efforts and allowing things to develop from a distance.
“If there’s anything consistent we see among the companies that are successful, it’s that they take recruitment incredibly, incredibly seriously,” he says.
John Stokes is a partner in Montreal-based Real Ventures. He’s seen some big software firms change their approach in working with startup firms lately as a result of some accelerator successes. But he wants more enterprises to clue in.
“Enough of them haven’t become scared to go out and think they have to connect with these startups, because if they don’t they won’t have businesses in the future,” he says. “We have to scare more corporates in Canada.”
More software engineers are becoming excited about working with newer companies rather than the traditional, established corporations, the panelists agreed. The big lure being a chance to build something disruptive to a market and have a major contribution to a project early in one’s career.