Can a Business Startup Incubator help you?

More and more entrepreneurs heard the success stories of the graduates of the famous American incubators like Y Combinator, the Founder Institute and TechStars. They dream of knocking at the door of an incubator with their idea on the back of a napkin and going out there one year later (or less) with millions of investors’ money in their pocket. But the reality is different.

 

What is an Incubator?

An incubator helps the entrepreneur to  transform his idea into a product or service to put on the market.

Mostly is an incubator a company ( sometimes also part of an university) which provides mentoring, support and resources to business startups. Some of them are getting paid for their services, others take a share of the stock of the new venture and others use a combination of both to be paid for their services and inputs.

Not everybody with ‘an idea on a napkin’ will be accepted by the incubator. Incubators want that their ‘entrepreneurs in residence’ are successful. So they are assessing every business concept or idea that is presented to them and will analyze if:

-         The entrepreneurial team has the right qualifications and if the members are complementing each other

-         The idea is unique in the market and solves a problem of the potential clients

 

But what is more important than the idea or business concept is to check if the applicant(s) are really apt to be entrepreneurs. A lot of would be entrepreneurs are, for example,  very strong in the technical aspects of their idea but don’t have any clue what it is to sell the product they want to develop. Worse, they don’t even want to leave their computer screen to find out what the wants and needs of the market are. That’s the objective of the intake chat. Are we dealing with potential entrepreneurs or with dreamers….

 Most of the time is this assessment appreciated by the applicants because they realize that it is not the best idea to start up a company, to struggle and to spend money , when entrepreneurship is obviously not their ‘thing’.

 

What can you expect from an incubator?

-         Expert mentoring and hands-on training.  The quality of an incubator is equal at the quality of the entrepreneurial coaches of the incubator. Avoid incubators where the entrepreneurial trainings are done by highly educated university graduates without any experience. Look for those guys with credentials and a solid resume. Experience is the best teacher you can find!

-         Peer support.  In addition to the formal training and coaching you will get from the incubator, the other entrepreneurs in the building (your peers) will you provide with more than just emotional support. You will find the expertise you need and a quick ‘coffee vending machine’ advice from those who are a bit ahead in the incubation process is priceless.

-         Facilities. An affordable office space is important, some administrative support also and that friendly lady who answer the phone can be a great asset. But incubation is not only cheap office space and a friendly lady who answers the phone…. So watch out for incubators who are ‘specialized’ in facilities, the more when they offer space in an, otherwise, vacant building.

-         Learning by doing. A good incubator with hands-on entrepreneurial coaches will allow (even force) the entrepreneurs to get their ideas out their head and out of the classroom while still retaining some structure and discipline. Products and services are sold on the market. They have to be tested on the market and testing is as close as a project can be to reality. And as I said before, experience is the best teacher you can get! Going out with the project gives the entrepreneur the opportunity to succeed or to fail fast and with a minimum of collateral damage.

-         Funding and connections. Funding is an import issue for every startup. Most of the incubators have the possibility to introduce their ‘graduates’ to bankers, investment companies, business angels and/or venture capitalists. In the incubator the entrepreneurs will be assisted in writing the winning proposal and will be trained in pitching their business model to financiers. Off course will the leadership of the incubator and the entrepreneurial coaches open their address books for their graduates so they can meet the ‘gurus’ of their industry and develop business opportunities.

Conclusion.

A good incubator can really help you. But realize that an incubator is no shortcut or substitute for the right entrepreneurial spirit, for hard work and for an idea that is a real solution to a real problem with a big opportunity.

 

Raf Vlummens

Entrepreneurial Coach