Family Business Center

Scalerators vs Accelerators

Welcome to a new buzzword to explain a simple thing like how to grow your business?

One week ago, after the presentation of results at Orion Technological Park on entrepreneurship, and after a long talk with several people about the impact of entrepreneurship programs, I was thinking on where in the pipeline of business development we can create more value? Where institutions, government and individuals can impact more at economic development?

I saw the scalerator term for the first time from Daniel Isenberg at the Babson Entrepreneurship Ecosystem Report. Isenberg developed the program, that includes a mix of peer-to-peer exercises and faculty-led workshops, which have helped more than 100 companies enter into new, rapid growth.

Very similar to a startup accelerator for scaleups.

Scale up refers to a company that grows consistently and significantly. Precedent suggests quantifying high-growth firms as having 20 percent growth in revenues or headcount for three years running, after reaching at least 10 people and $1 million in revenues” – Isenberg & Onyemah

The Scalerator NEO, one of the first program under this “concept”, works with companies with an annual revenue between $5M and $15M.

With some study cases like Manizales and Scaleup Milwaukee, the program aims to help companies to get to the next level.

Do we need more programs focused on scale ups? Are these kind of programs a new solution for the missing middle?

The missing middle?

(Original from Entrepreneurial Finance Lab research Initiative of the Center for International Development at Harvard University)

Developing countries have a large number of microenterprises and some large firms, but far fewer small and medium enterprises.

In high-income countries, small and medium enterprises (SMEs) are responsible for over 50% of GDP and over 60% of employment, but in low-income countries they are less than half of that: 30% of employment and 17% of GDP.1

This SME gap is called the ‘missing middle’.

The Firm Size Distribution
Source: https://www.hks.harvard.edu/centers/cid/programs/entrepreneurial-finance-lab-research-initiative/the-missing-middle
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