Why Most Accelerators Fail – And What Comes Next

On The Forge of the Unicorns with Michele Brissoni

I’ve been in hundreds of cities working to support entrepreneurs and ecosystems. One thing I’ve seen over and over again, whether I’m in Boise, Bogotá, or Brussels, is this illusion that we can bootstrap startup economies by launching accelerators. We treat them like vending machines: plug in some public money, out pops innovation.

On The Forge of the Unicorns podcast with Michele Brissoni, we dug into this problem and found that what most won’t say aloud is that most accelerators fail.  The subtlety in my saying that, is not that they go out of business, it’s that throughout hundreds of cities where I’ve been engaged, it’s participation that is celebrated (it looks and feels good to appear to be trying) while the outcomes that matter to founders (funding, or at least accelerated growth) are ignored.

We talked about what’s broken and what needs to change, as well as how AI will change things and why venture studios and platforms might be the real infrastructure appropriate for civic investment.

Most Accelerators Aren’t Built for the People Who Need Them

The accelerator model was built around a very specific kind of founder in a very specific kind of place: Silicon Valley, 2007, Web 2.0. And that model has since been copied endlessly by people who often don’t understand why it worked in the first place.

The challenge throughout the world is that most accelerators are run by business professionals, not entrepreneurs. And what I’ve come to confirm, as 3rd party research emerges, is that entrepreneurship is behavioral before it’s ever operational. It’s not enough to teach someone how to write a pitch deck or run a sales funnel if they can’t live inside ambiguity and grit, adapt in real time, and stay curious under pressure.

Too many accelerators measure progress by inputs and activity: how many startups, maybe desks occupied as a coworking space, the number of events, and size of the community. But none of those metrics tell you whether the work being done is resulting in net more sustainable companies, notable job growth, or meaningfully more funding.

“What I have observed lately is that a lot of these companies that go through incubators, accelerators, or even digital transformations, they have a social behavioral tendency to apply a process by the book. They are not able to evolve the idea, the recipe, to a taste that fits their culture and their own unicity,” shared Michele Brissoni. “This showcases that our industry is in such an evolutionary stage due to technology disruption that what was working yesterday is not working anymore tomorrow.”

Before I go on with my brief of our interview, tune in here:

So, What Actually Works?

On the show, Michele and I got deep into this: what do we build instead?

One answer, I believe, lies in venture studios. Not pitch competitions. Not demo days. Studios.

Unlike accelerators, studios don’t just coach, they build. They co-found companies, provide infrastructure, embed cross-functional teams, and most importantly, they focus; they go deep on a vertical (climate tech, fintech, or health) so the expertise inside isn’t generic, it’s specific and immediately applicable.

Venture studios are startup version of Labs: they reduce early-stage risk, support entrepreneurial behavior, and deliver real ROI on public or corporate investment. They’re not programs in the sense of a cohort of entrepreneurs, they’re companies that build other companies, and that distinction matters because in my discussions of how cities allocate resources or support, it’s reasonable that public funding is allocated to operating (funded) businesses from which startups emerge, and people are employed.  That’s not to say that an accelerator isn’t capable of accomplishing the same outcome, but we should have more discernment about the impact of an accelerator when supporting such programs without funding and infrastructure of their own.

Think of most of what’s happening throughout the world by considering accelerators as non-profits whereas a venture studio or a platform for startups is like a for profit.  Bear with the idea, this is an analogy, not how things really work.  When a city is allocating grants to a non-profit, we should demand a much greater rigor around whether or not it’s causing what we all expect: a higher rate of success from startups than is otherwise average in the community. We should have that greater demand for outcomes because an equivalent allocation of support to startup platforms or venture studios, instead, means we’re supporting infrastructure that is itself funded and operating as an impactful business – from which startups emerge.  We’re not floating potential; we’re supporting effective impact.

AI, Ice Cream, and Everything in Between

One of my favorite parts of our conversation was when Michele brought up the ice cream paradox – a simple metaphor I wish I’d come up with. It goes like this: ice cream sells in Italy, but good luck launching it in the Arctic. Same product. Wrong environment.

Startups work the same way. We’re too focused on whether the idea is good and not focused enough on whether the context and team make it viable. Are they the right people for the terrain? Do they know how to adapt when the market shifts? Are they even in the right place for what they’re doing? These are the questions locally developed accelerators tend to ignore because they’re oriented to helping all local entrepreneurs. Contrarywise, that venture studio is sector specific, so it’s meant for *those* ventures while a startup platform, such as Founder Institute, enables infrastructure upon which local entrepreneurs could reach everyone, while program directors provider specialization.

It’s a subtle but important difference, for another time; connect with me and we can work through what you should be doing.

“If the startup is designed to create disruption, how can we expect it to succeed by following a canonical process?” added Michele as we explored how sector specific programs can work but that startup programs need to be designed for entrepreneurship, not business development, “Disruption comes from critical thinking, from behavior, not from templates. And that’s why these programs often don’t deliver results.”

So, we explored AI, a space where capital is pouring in at staggering levels. Michele raised a real concern: what happens when 80% of global innovation funding is captured by companies chasing AI? My take is that yes, most of those companies will fail, but the money’s not wasted. Failure in the experimental phase is how we get to the next Internet – this is why Angel investors and Venture Capital shouldn’t be affiliated with business investment and why businesses chasing VC have been steered in the wrong direction.. 

Unlike past fads (remember NFTs?), AI will change everything. But ecosystems need to stop treating startups like businesses. We need to build infrastructure, programming, and mentorship for AI ventures, not just sponsor hackathons and hope for the best.

Listen to the Episode

? The Forge of the Unicorns – with Paul O’Brien <- Spotify version

This episode is one of the best conversations I’ve had on startup infrastructure in years. Michele is a thoughtful, globally minded host who understands how ecosystems really work and who isn’t afraid to call out what doesn’t.

If you’re a founder, policymaker, investor, or anyone who’s ever asked, “Why isn’t this working?” – this episode will will explain as we talk about:

• Why 90% of startups fail, and how shaving that to 80% would double our output.
• How personality traits, not playbooks, drive entrepreneurial success.
• Why government-funded accelerators are often misaligned and what to do about it.
• Why venture studios aren’t a trend; they’re infrastructure.
• What it looks like to invest in what really attracts venture capital

If we want to build real startup economies, ones that work not just in San Francisco but in Stuttgart, São Paulo, and Seoul, we have to stop copying the Silicon Valley form and start replicating its function. That means focusing on behavior, specialization, and co-creation, to develop the ecosystem that itself is meaningful to entrepreneurs.

Ask more than “How do we bring investors here?” Ask “Are we giving founders the environment to thrive?”