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Terri Pattio
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Aspiring entrepreneurs out there may be wondering if the same could happen for them. They could appear at the incubator’s door, with their idea on the back of a napkin and, a few weeks later, pop out with investor money to burn. The reality is far different.
It’s true that some incubators — which typically offer to ply young companies with resources and contacts in exchange for a share of equity — can boast envious success records. Y Combinator, led by Paul Graham, recently claimed success with 172 companies over seven years, which now have a combined value of $7.78 billion. Founder Institute, led by Adeo Ressi, claims the most graduates, with over 650 companies, and 90 percent of these companies are still running.
But with all of the hoopla over the success of incubator-nurtured startups, one has to wonder: Do incubators beget successful startups or are certain startups destined for success no matter what?
In the same way that students who attend top universities may be predisposed to getting higher paying jobs than those who didn’t go to college at all, one could argue that the really great entrepreneurs don’t need any help from an incubator. They might wind up being even more successful without it.
The rest of us, however, could be the real beneficiaries. Of course, getting into a high-profile incubator is a whole other story. But if you do land a coveted spot, here are several key lessons I assert you can learn from a good incubator:
1. Aptitude-reality check. Adeo Ressi believes his preliminary test of applicants is predicting more and more accurately whether you have the DNA of an entrepreneur, before even being accepted. His tests focus on personality traits alone (ignoring your startup idea), looking for fluid intelligence, openness, and agreeableness. Why spend years struggling and all your money if entrepreneurship is just not your thing?
Related: From College Dropouts to Y-Combinator Darlings
2. Initial funding. Many incubators do provide seed funding for entrepreneurs selected, usually in small amounts like $10,000 to $20,000, and usually taking 5 percent to 15 percent of your equity in return. This investment can get your startup off the ground in an otherwise impossible financial situation, but should not be viewed as the main reason for joining.
3. Expert mentoring and training. In my view, the quality of incubator leadership is the single biggest potential value provided and learning opportunity for entrepreneurs. Every successful incubator has strong leadership and staff with business and investment credentials. Skip the ones that seem to be offering you space and facilities only.
Related: Is Your Business Ready for an Incubator? 5 Tips from a ‘TechStars’ ...
4. Peer support. In addition to the formal mentoring, the peers you’ll be working alongside at startup incubators provide much more than emotional support. You will find expertise in areas you need, as well as quick advice from entrepreneurs just ahead of you in every phase of the business cycle.
5. Ample resources. Of course, we can’t eliminate the value of affordable office and meeting space, administrative support services and advanced communications technology to struggling entrepreneurs. But don’t believe the myth that incubators are all about ‘cheap rent,’ and avoid business incubators in otherwise vacant buildings.
6. Learn by doing. An incubator allows entrepreneurs to get their ideas out of their mind and out of the classroom, while still retaining a modicum of structure and discipline. That’s as close as possible to real experience, and there is no teacher like experience. It’s an opportunity to succeed or fail fast, with a minimal investment of time and money.
Related: Starting Up Under One Roof: A Look at the Surge in Residential Incu...
7. Follow-on funding and connections. Success in an incubator means likely access to venture capital and connections to industry gurus and business opportunities. About 80 percent of TechStars start-up graduates go on to raise venture capital or a significant angel-funding round, versus maybe 1 percent of all startups who seek funding.
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i like discussion and shere the experience to the friends
Hello Francis this is such a great writeup, I believe you should post it as a blog here. Thank you for being a part of Syndication Express. I look forward to getting to know you better.
francis majiga banda said:
In these days with the cost of food on the rise, this is an option worth considering. Thank you for sharing this information here.
LeRoy Engle said:
The harsh reality for all of us who lead businesses and organizations is that, at the end of the day, we're responsible for the growth or plateau or decline of our businesses or organizations. Why? Because they're always a direct reflect of us.
So, back to my original question. If you want to grow your business or organization this year, how are you going to change you? Who do you need to become to be the person (in the case of our illustration above) to lead a $1.3M vs. a $1M business (or, even better, to lead a $2M business. Why? Because you need to change ahead of your business).
To make this incredibly practical, here's what I'd recommend. Take out a sheet of paper (or open a mind map on your computer) and put a circle in the middle. In the middle of the circle write, "Who Do I Need to Become to Lead a ______ Business (insert your revenue number for the blank)?
Next, if you want to create change with anything in life, there are only four options (more, less, start, stop). Write these four options out like four spokes on a wheel and then write your answers out from each of the four main spokes. So, what are the four options that form the four main spokes
Hey all - my main company has a mission of providing tomorrow's foods at today's prices. Freeze drying has really enhanced overall food quality, texture, taste, and longevity. Shelf life on our products are from between 2 - 25 years with 20 being the most common. After opening - they still have a shelf life of 1-2 years. Not only are they applicable for emergency food storage, but, of such a high quality that we can really "store what we eat and eat what we store". The best thing is that we don't throw away rotten fruit and veggies any more. We only use what we need when we need it. I donate 10% of my sales to the local food bank and the company donates 5% of annual profits to a Thrive international food bank. Some great December sales http://www.shelfreliance.com/leesprep
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Have a great day and weekend.
Terri Pattio
We have seen these clauses more than once. A few who had tools we needed, we joined. Otherwise we left them alone. The goal here is to create a way for the women and children to be taken care of. None of them are related, and I am not married, so a spouse clause would do no good. Anything we do has to be joined by the company or with a way to transfer it to the survivors here. I am 10 years older than the oldest we have taken in and normally at least 30 years older.
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