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Entrepreneur Office Hours: Issue #203
Who's more excited about building audiences?
As promised, you got some extra emails from me this week! And, based on the feedback, most of you seemed to enjoy/appreciate my first attempt at an entrepreneurship mini-course.
TL:DR — the course is about the importance and enormous value of building an audience and how having an audience (likely built via social media), is a huge asset for any entrepreneur.
Also, as I mention at the end of the course, if you’re interested in learning the fundamentals for building an audience, then you should join me for one of two live, 30 minutes Webinars I’ll be doing next week. They’re happening on:
Tuesday, October 24th at 12pm EDT (register here)
Wednesday, October 25th at 4pm EDT (register here)
They’e free, and I hope to see as many of you there as possible. We’ll cover the basics of what it takes to launch, grow, and maintain a valuable audience across social media. And, again, it’s a LIVE webinar, which means bring your questions, and I’ll do my best to have good answers.
See you soon!
The excitement of launching new startups can make it easy to forget the much more important work that comes next.
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Office Hours Q&A
Hello Mr. Dinin,
I have been enjoying reading your articles, and I appreciate you taking all the time and energy you do to share such valuable information with all of us in your community. I am not one of your students, but I feel like one and would have loved to have had a professor like you when I was in university.
With this next question, I would like to learn your thoughts on startup accelerator programs. My company has been accepted into a startup accelerator program. It offers three months of space, networking, and help with fundraising. But rather than equity, this program charges for their service and does not take any ownership in your startups.
Is that a good idea? I believe most startup accelerator programs provide a small investment in exchange for equity. We thought this might be better to not have to give up any equity, but we were not sure, which is why I am asking for your advice.
Thank you for taking the time to consider my question.
As a good rule of thumb, any person, organization, or operation offering your startup resources/education/growth in exchange for money is a business trying to sell you something. To be fair, that doesn’t necessarily make the thing they’re trying to sell you inherently bad, but you should definitely be cautious.
Specifically, in a case like this, I worry about the language you’ve used of having been “accepted” into an accelerator. That implies some level of exclusivity accompanied. But, if they’re charging you to participate, then the exclusivity is probably more of an attempt at branding/selling the program to make it seem like an accomplishment when the reality is they “accept” everyone because that’s how they make money.
The “real” accelerator programs – YCombinator, 500 Startups, TechStars, etc. – don’t charge you. They invest in you. And that’s because you’re not the customer. You’re the product, and they need to get the best products possible in order to expand their brands and attract more of their own investors.
In other words, I’m sorry to tell you that the opportunity you’ve been offered isn’t actually a reflection of your startup’s quality. It’s most likely a group of people trying to sell naive entrepreneurs a service. Any accelerator worth attending should be giving you money, not taking it.
However, before I end this response, I should mention that even some of the legit accelerators that write checks do actually charge. Two of the accelerators I participated in (including 500 Startups) invested in my company but also charged a per-month fee for our time in their programs that came from the money they invested.
To be fair, the fees weren’t enormous. And, also to be fair, office space, operations, technology, snacks, etc. all cost money, but it did feel a bit scammy on their part to make us pay them a portion of the money they invested.
Then again, even my current employer has its own version of this particular scam because it charges me ~$700 per year for parking, meaning my employer is basically making me pay to come to work. How unfair is that???
Anyway… enough about my minor grievances. For you, remember that any legit accelerator is going to invest in your startup. If you’re not getting offers from those types of accelerators, it means you’ve got more work to do to get more traction for your company.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!