The concept of business incubators is not a new one and probably needs very little explaining.
… an ‘incubator’ is a programme that helps businesses (mostly start-ups) by providing business management support and/or office space.
The popularity of the business incubator has exploded over the last 10 years. Pretty much everywhere that’s worth mentioning (and some that aren’t) seem to have a business incubator. There are so many in Europe that, as of now, no one actually knows how many there are (for a rough guide click here ) for a more comprehensive guide read Robin Wauters tech.eu’s post here.
- Incubators are often supported by industry experts and successful entrepreneurs who have the ability to offer technical advice and make useful networking connections.
- Some people (particularly young entrepreneurs) require significantly more help than others – incubators can provide this.
- The life of a start-up is extremely risky during its early stages simply because it hasn’t made the switch from seed financing to self supporting income. Accelerator programmes aim to reduce this time period, therefore increasing the likelihood of success.
- Investment is usually not far away for those with potential.
- They offer a creative environment from which to share ideas and support innovative thinking.
- Start-ups can work collectively on projects or call on each others skills to further their own abilities.
By its very nature you could argue that a business incubator can hinder the development of an entrepreneur. Do the next generation of entrepreneurs really need so much support ? Ask any entrepreneur about failure and they’ll tell you it’s a right of passage. Learning to recognise, adapt and overcome failure is one of the key attributes of any great entrepreneur. However, if more successful businesses are spawned from incubators, then it is a pretty convincing argument against this theory – even if the individuals are a little less battle hardened.
Another serious issue with private incubators is that, well.. . they are private! This means that just about anybody can set up an incubator or accelerator programme. Naturally, public sector and educational institution programmes will be better vetted but in the private sector, for the most part this simply isn’t the case. So, in addition to the successful entrepreneurs, hopeful entrepreneurs and investors they also attract the less-than-successful. Some people make great entrepreneurs and great advisors, others make great business people and bad advisors but you have to wonder if there is such a thing as a bad entrepreneur and a great advisor. (I would insert a worried emoticon here if I could)
The overly talkative
In the early years, incubators or small business parks would simply be estates or districts of cheap offices that attracted start-up businesses. However, this caused a number of problems…
- Lots of entrepreneurs prefer to talk than work.
- There were not enough hours in the day for all of the talking required
- There wasn’t enough coffee to support all of the talking required
- People were getting rich far too quickly – and not necessarily the new entrepreneurs!
So the business incubator AND ‘Accelerator’ came into being. It fixed all of these problems because ‘incubatees’ would need to be approved before they joined a programme, there would be a set number of events and tasks to be done each week, there would be plenty of coffee and it put everyone under the spotlight for potential investors. Which is why almost every major tech firm has its own incubator facility, all hoping to net the next piece of innovation.
If you decide to launch a business in an incubator, make sure they either have great staff or great coffee.
Food for thought; What do you call someone who is based in an incubator ? Here are some good and not so good suggestions I’ve heard recently.
Residents, incubatees, chicklets, hatchlets, incubation office members (IOM’s), Fast trackers, accelerated start-ups.