And so the Great Incubator Contraction continues. It has been announced that Greenstart is closing its accelerator to become a VC firm with a “studio” of companies working within its doors. This move follows the closing or morphing of several incubation/acceleration programs nation and world wide. Just like the Series A crunch, too many accelerators quickly popped up to chase too few entrepreneurs. What began with broad and open programs like TechStars and Y Combinator quickly morphed into a gold rush of highly specialized, industry specific firms like Greenstart that only accepted “green” or environmental businesses. What is unfolding now is a mass realization that the present quantity and focus of incubators is untenable, with some firms folding up shop while others are rapidly pivoting to other models.
Greenstart hopes to find success with the rapidly growing “studio” model that generally consists of incubating internal ideas and possibly a few outside companies for life rather than the usual 3 months of strict accelerator programs. This is very similar to LA firm Science’s model and Greenstart hopes its new VC credentials will allow it to weather the storm of market retraction now occurring.
You can read their full blog post detailing the decision below:
We’ve decided to kill our accelerator program.
After two great years of working with 15 startups, lots of tweaks to our model, and 75% of our companies raising follow-on funding, we’re announcing today an entirely new way to partner with our portfolio companies:
Greenstart is now a venture firm with a built-in design studio.
We couldn’t be more excited.
This means we’ve shut the door on our accelerator forever. There will be no more demo days, no more three-month time frames, and no more required sleepovers (well, maybe a few).
This change was 100% motivated by listening to our startups. They told us loud and clear: they want a lifetime partner who will roll up their sleeves and help drive their business forward for years to come. Consistently, our startups told us they wanted more than what a three-month program could offer. So we listened.
At the same time, we heard again and again that they wanted and needed help with design. Not skin-deep, visual design like a logo and website, but a deep, systematic approach to user experience (UX) for their products and services: the kind of design that makes customers rave.
The breakout success of companies like Nest, AirBnb, Uber, and of course Apple, is increasingly being recognized as driven by their design. Most in the startup community today recognize how design creates a competitive advantage for early-stage companies. To win in a crowded marketplace, companies must go beyond customer satisfaction and truly delight customers at every step of the way. The problem for most startups is that great UX design is both expensive and hard to access.
One year ago, we recruited David from frog design to advise our portfolio and lead a small team of designers at Greenstart. Our companies loved this early work asked for more. It was then that we decided to build a truly multi-disciplinary design studio.
Today marks the official launch of that design studio, which is now a 10-person team – and growing. We practice capital ‘D’ design, integrating UX, business model, and brand design. We provide best-in-class solutions for the most critical challenges of a startup: a winning product aimed at the right customers, and a story that captivates them. This means our startups get big advantages during the most formative time of their companies.
As far as we know, we’re the first and only venture firm with a built-in design studio that actually creates and delivers world-class design work. While others teach, we make. Our design is custom-tailored for cleanweb startups, and our studio is exclusively available to our portfolio.
This new model is our way to be the best possible lifetime partner to our companies – the kind of venture firm we would have sought out as entrepreneurs ourselves.