How to Make an Incubator Resourceful?
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An incubator is set up to reduce the chances of failure of early-stage startups and it helps in the economic viability and growth of startups that it supports. Therefore, incubators are set up to create sustainable and strong entrepreneurial support infrastructure and enable young innovators and entrepreneurs to find the necessary support and resources to build successful startups.
The heart of an incubator is therefore the startup. However, there are other elements like space, design, network activities, partnerships and linkages, service providers and consultants that build a holistic environment for the heart to function.
It might be a good idea to partner with an organization to jointly host an incubator as this makes the incubator resourceful and helps it attain its full form and maturity.
This could be an academic institution, or a funding /investing arm like an angel group or a corporate. The critical role of the host partner is to create mechanisms and linkages between incubators; build a pipeline for the incubator; build a network of experts in different areas who can support startups and most importantly provide support in terms of space.
Space and Design
Leveraging design to create purposeful use of space is extremely significant for an incubator as these spaces have become synonymous with innovation. While these spaces require collaborative, creative and idea-generating areas, at the same time they require private spaces for individual work to carry out confidential meetings and discussions.
We need to take a step back from the designs that make the space look ‘too perfect’ as this space should not recreate the same look and feel of corporate headquarters and instead have a few raw edges that reflect the start-up work and excitement.
The startups must also be provided with uninterrupted connectivity (internet, electricity & power back up), IT infrastructure, security support and administrative support (printer, copier, scanner etc) to ensure the focus of the entrepreneur is on building the business and not maintaining and fixing the support resources. Often the start-ups waste most of their time in finding access to these support elements and these hiccups divert the energy of the start-ups to non-productive activities.
The team that manages the incubator must be well trained and must be highly dynamic, as they are the real drivers of the incubator, while the incubatees will focus on driving their individual businesses. It is also good to identify a set of advisors – preferably a mix of industry veterans, faculty and investors, whoshall guide the incubator managers on strategic issues.
It is vital that the incubator conducts value creating support activities from the perspective of the in-house start-ups and the incubator. Start-ups feel a peer-to-peer network activity create more value than seminars and conferences. However, it is imperative that the start-ups organise these events regularly to keep the momentum going. Activities like mentoring, pitching, hackathon, knowledge driven talks and workshops sets the start-ups on a path of growth and learning.
Partners & Linkages
An incubator can never hope to have all the knowledge, information and skills that its incubated start-ups will need, in-house. The incubator must capitalize on the knowledge, skills, network of entrepreneurs, investors, consultants, service providers and interns. A critical strength of the incubator lies in its ‘usable’ expert network – great cluster of people with relevant expertise who are enthusiastic and available to offer regular advice, guidance and create further access to outside resources for the start-ups. While it may sound great to have an incubator which connects the entrepreneurs, investors, mentors, trainers, students and faculty – the actual test comes in execution
It is also essential for incubators to provide business support services and create access to a variety of business and professional services. A scope can be defined for the start-ups to avail the legal, accounting, secretarial services. Building a pool of technology, management and strategic consultants that assist the startups in formulating business, marketing and financial plans will be a good value proposition for the incubator.
Comparing Apples with Oranges
Incubators are not all the same kinds. They have different business models, focus, theme and cater to different kinds of entrepreneurs. These entrepreneurs create different kinds of impact on the social and economic region or the country.
Hence, the incubator must be designed and set up to cater to the specific needs of startups. However, today we compare all incubators with each other and that often leads to not a satisfactory result as who emerge as success.
Startups have different gestation periods, for example a software startup would be able to reach the market in around 18 months, but a MedTech startup will require three to five years to enter the market, such comparisons are like comparing apples to oranges.
Primary success factors of one type of incubator may not be exactly same as foranother kind. Not differentiating between these often leads to generalization which is misleading as the resources and effort required to nurtures these start-ups are distinctive.
In conclusion, it is critical to stress that bringing all these elements together can be a real challenge for the incubators, however if executed well it can create immense value for the start-up ecosystem.