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.
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’.
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….
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
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