You may have already heard the news – Canada is getting a new tech accelerator. I am extremely excited to be working with the team behind GrowLab and the amazing group of mentors, investors and supporters who have committed to building something pretty sweet here in Canada. I have had the opportunity to work with Boris (previously my boss!), Debbie, Jason and Leonard in the past and have a tremendous amount of respect them. But, enough about the news, lets talk accelerators.

I have already shared some thoughts on accelerators and why we are getting involved in GrowLabs. What I want to focus on here is the difference in all of these incubators and accelerators popping up everywhere. They are not all the same and generally accomplish different things. Here is how I like to categorize them:

• Technology Commercialization Centers – These exist in pretty much every major city with a large university or college. They emerged in the 80′s after people saw the success of Boston and the Silicon Valley and tried to model it. It didn’t work and here is a great explanation why. I am not a fan of these incubators as I do not feel that they promote entrepreneurship very well. They focus on the technology and IP rather than a market need and what it takes to build a successful company around that. I think that there are still sectors where this model was benefits (biotech, pharma, etc.), but the new world of IT, internet and mobile has left them in their dust.
• Private Incubators – This model is beginning to become more popular as private organizations, such as venture capital funds, technology companies and even successful entrepreneurs, take companies in and provide resources, mentorship and support. A local example of this is Extreme University run by Extreme Venture Partners in Toronto.
• Foundries – These are vehicles that let successful and experienced founders start multiple companies in parallel. The founder then places talent, mangers and resources around the idea and tries to develop it to the point of breaking out on its own and attracting venture capital. One of the most successful examples of this model is Bill Gross’ IdeaLab formed in 1996. Since its inception it has produced such companies as NetZero, Picasa, Overture (became Google’s AdWords), Shopping.com, Tickets.com and CitySearch.
• Accelerators – The characterization of this model is a short, structured program that involves a small investment and selective admission process. It generally involves accepting teams of two-to-four people who take an early stage idea and have a functioning product at the end of the program to build a company around. The accelerator helps lay the foundations for the companies, provides mentorship and support, as well as provides work space and community among the founders. The obvious examples are Y Combinator and TechStars.

Even among the last category there are differences. Many of these accelerators are not profitable or even set up as not-for-profits, rather focusing on economic development. In fact, I have yet to see proof of any accelerator being profitable other than Y Combinator and TechStars.

So what contributes to making an accelerator successful (profitable)? I believe 3 things:

1. Team / Mentors – An accelerator must have a strong team of successful entrepreneurs and investors supported by highly engaged mentors of the same ilk. The combination of experience and strong networks can’t be matched by a group of smart, driven people trying to do the same thing. It is my belief why we don’t see highly successful (profitable) accelerators outside of major tech centers.
2. City / Community – An accelerator must be founded in a city that is a desirable place to live and has a strong, engaged tech community that it can become a part of. There is a reason that the only successful accelerators are currently found in Seattle, the Silicon Valley, Boston, Boulder and New York.
3. Brand – To be a successful accelerator you MUST be able to attract the top entrepreneurs from anywhere they may be found. The entrepreneurs are the market and just like any business you have to attract the customers that will lead to your success. Brand is really a combination of the team, location, mentors, successful alumni and much more.

I believe that GrowLab has the above 3 characteristics and can become a successful accelerator. This is not taking away from any of the other types of incubators out there. They all contribute to building the eco-system and I am pumped every time I see one launched. I am sure that they will continue to be key pieces of innovation and entrepreneurship going forward as long as expectations are properly managed.