The primary offerings of an incubator are a physical location and a stimulating environment focused on growth, support, and coaching.
The name comes from the world of nature; the egg is kept under the mother’s body to nurture and nourish it before it hatches. It’s the same with businesses and start-ups; they’re given the structure and support – both technically and financially – under a business incubator’s infrastructure.
It’s not necessarily all warmth and comfort there, however. There can be three sides to business incubators or three distinct types of experiences you can have: the good, the bad, and the ugly. We’ll take a lot at the pros and cons: is a business incubator the right fit for you and your goals?
The Good
Right away, a few benefits make themselves apparent; by providing a physical location, an incubator gives an infrastructure to a team that needs that the most. Space and equipment are provided but maintained with very rigorous upkeep, as that is one of the prime functions of an incubator.
Using an incubator saves resources monetarily compared to buying or renting a whole office, floor, or building. Additionally, you do not have to go through hiring and managing staff such as clerical workers, cleaners, and office attendants, on top of maintaining said locations and dealing with the day-to-day operational hassles. As you can see, this essentially also means not wasting mental resources and the energy, time, and creativity of your human
resources.
Of course, the charge is much lower than what it would be for doing all of that all by yourself!
In addition to that, your company, your brand, and your team – all of which equates to the physical expression of your idea and your mission – are never isolated. An incubator means having fresh, motivated, and excited individuals and teams all around you. Coworkers are all focused on the same structures, even if they’re making different things with them. That means ideas bounce off of each other quickly, inspiration can strike from anywhere, and a positive and upbeat environment should naturally flow.
This also translates to rubbing shoulders with those who’ve been where you are now – at every stage. You can benefit from those who’ve been there. You’ll also chance upon meeting and learning from entrepreneurs who started out like you, successful experts in their field and who you can network with. Consultants, industry experts, lawyers, and thought leaders; all there to learn and seek guidance, counsel, and help from.
An incubator makes sure that you have the right source for the mentorship that any new business needs. Additionally, having corporate sponsors also allows for a certain degree and quality of freedom. Furthermore, an essential part of an incubation program is the training received, which combines mentorship and sponsorship benefits with an incubator investing in building the necessary technical and creative skills to make for a successful start-up.
The bad
More than anywhere else, incubators are investing in your growth, and they want a return on that. They might even literally want an equity share by way of offering capital funding. As a start-up, you’re a part of their business portfolio, and they want better and more diversified projects with each investment they add to the portfolio. They’re also not social enterprises; some organizations and some ideas might not work for an incubator’s larger purposes, which are business-driven.
All of this can lead to ‘differences’, whether creative differences or differences of opinions, which can give rise to a conflict of interests (or that can happen all on its own). However, simply knowing some of these potential pitfalls can help you prepare yourself and your team to deal with them and treat the reality of the path as just that – not impacting your goals. The same goes for any breakdowns and trouble in co-working, such as the invasion of privacy, the competitiveness that can turn fierce, and perhaps an environment that might simply be stifling for the type of thing you’re trying to make happen.
The ugly
Spoiler alert: there is also the potential for things to take a turn towards the ugly. We’re only slightly dramatic here, but being unprepared might make an excellent opportunity turn hellish.
As mentioned in the last section, incubators being invested in your start-up can have a detrimental effect on your freedom. Yes – the exact cause can have differing results. Furthermore, being contractually obliged with the incubator can cause problems regarding plans for scaling the business (and opportunities that can crop up for it).
Your success might even scale you down. You might be expected to play a role you don’t want to or find it hard to turn down “opportunities” pushed on you by the incubator, especially the more you advance and grow. The direction you want to take might not be the one your sponsors think is better (and that can be for any reason), and unless there are trust and a great working relationship, this kind of problem can get particularly frustrating. Ultimately, this kind of behavior impacts and what these problems stifle is innovation. With each passing person that gives up a good idea, the message seems to be more and more anti-innovation, which slowly weakens the start-ups, the incubator itself, and even the sponsoring corporations.
What do do
The key is an adaptable culture and a leadership that embraces innovation in terms of business and doing business and running businesses. Don’t just look at what’s on the surface of any incubator you plan to partner with; ask around, read reviews, talk to the people that have already been there for a while – or better yet, talk to anyone that’s left. There are great places and great opportunities out there. We don’t need to get bogged down by the worse
ones.
