As an incubator or accelerator, your main goal is to help entrepreneurs develop the businesses they dream of. In essence, these programs are looking for the same thing: to provide entrepreneurs with a helping hand to develop and launch new businesses. A traditional incubator will offer a standard fee for location, mentorship, and general oversight. This is a method that works well in theory, but only because we tend to look at the success stories, rather than the hundreds of ideas that are dropped before they even leave the innovation stage. It’s time for incubators to stop relying on the traditional model and to think outside of the well-structured box.
Statistics show that depending on the industry, 50% or more startups don’t make it longer than a few years. This consistent failure rate may be due to the existence of such a drive for rapid success rates that entrepreneurs neglect to nourish their foundations. A business will keel over without a solid base to fall back on. While this isn’t necessarily the fault of the incubator per se, if we make certain significant changes in the way they work from the get-go success rates will most likely rise. It’s all about feeding the seeds and keeping that bottom line growing!
Innovate the Incubator
It’s high time that the traditional incubator starts looking for new ways to incentivize entrepreneurs by shaking up their program and offering added value. Why are we not seeing incubators offering additional services to their tenants? Both incubator and tenant are looking to make a long-term profit off a mutual agreement, and incubators seem to have forgotten this. Instead of providing a set formula of services for each tenant, why not offer a package that is catered more towards the tenants’ needs? For example, partner up with software companies such as QuickBooks, SalesForce, or Hubspot and offer discounted package deals. It’s a win/win for everyone involved, and sets the entrepreneur off on the right foot. A sturdy foundation is key for any startup, and this type of partnership can only provide added incentives for startups to succeed.
It is rare to see businesses fail from something completely out of the entrepreneur’s hands. For the most part a startup will fail to get off the ground due to incompetency or mismanagement. If incubators start providing management and market knowledge training in their package deal from day one, incompetency can be avoided.
Diversify the Necessities
Incubators need to become more flexible. Not everyone with an idea is business-savvy enough to make it into a reality. So many incubators still require prospects to be further along than just the idea stage, and not everyone can write a detailed business plan or pony up the cash for a prototype. Those who don’t have the knowledge or the means are immediately excluded, and incubators are blindly passing on something that may have real potential. A great solution to this issue would be to change the bidding process and set up different package requirements that would include entrepreneurs from all socio-economic areas. If these bids pass the selection they could then benefit from specific software package deals as noted above.
Support is the key word here: instead of relying on a static, business plan approach, incubators will open their doors to entrepreneurs from all angles. Their more flexible approach will then lead them to be able to provide entrepreneurs with a solid base of resources and support adapted to their specific needs.
Incubators most commonly find themselves located in large urban areas, in big cities where certain verticals are making a name for themselves. This makes complete sense in terms of business, as the talent usually flocks to these areas to flourish. But if 45% of all incubators in the US are located in large cities, congregating on each side of the country, then what about all of those potential mines of innovation in the middle? We should find a way to reach and include entrepreneurs who are located outside of those hubs by creating workspaces and meeting spots all over the country, with access to adaptable platforms and software packages.
Why not create market-specific working spaces across the country, linking up different entrepreneurs in order to share knowledge within the workspace, and share mentors with similar backgrounds? Incubators could provide access to an all-in-one style platform that can also act as a communal knowledge base for all involved.
Mentor the Mentor
Why not also start matching mentors with potential tenants during the bidding process, rather than handing them out randomly? Mentors and startups should be matched according to needs, so that mentors can really provide full value in terms of knowledge, insight, and overall help. The icing on the cake would be using mentors with expertise in specific software, creating in essence, a mentor-software bundle.
For example, a translation and localization software startup would benefit from a mentor in the business, as well as access to software such as SalesForce. This would allow them to learn how to maximize their lead generation practices while also understand the ins and outs of the business and where the pitfalls lie. A mentor from another vertical may not have that insider knowledge that could mean the difference between success and failure. By offering these types of out-of-the-box solutions, incubators will most likely see their success rate grow.
We continue to incubate innovation, but over time we seem to have forgotten that it can be highly beneficial to shake up the system now and again. The ideas listed above will enable incubator executives to shop around for quality software packages and mentors that they can then offer as an added value incentive to their startups. These deals can then be bundled together through our platform, helping startups spend less time on the foundations and more time on the brickwork.