Incubation
overview
Incubation
A startup incubator is a collaborative program designed to help new startups succeed. Incubators help entrepreneurs solve some of the problems commonly associated with running a startup by providing workspace, seed funding, mentoring, and training (see list below for a a more extensive list of common incubator services). The sole purpose of a startup incubator is to help entrepreneurs grow their business.
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Startup incubators are usually non-profit organizations, which are usually run by both public and private entities. Incubators are often associated with universities, and some business schools (such as Columbia or McCombs) allow their students and alumni to take part in these programs. There are several other incubators, however, that are formed by governments, civic groups, startup organizations or successful entrepreneurs.While most of the media emphasis focuses on tech startups, incubators aren’t just limited to one industry. In fact, the focus of incubators varies by region. North Carolina, for example, is home to five incubator farms. Given the strength of its restaurant and fashion industries, NYC is home to several incubators for both food and fashion. There are also all-purpose incubators that consider all kinds of startups, regardless of industry.
While many people associate business incubators with the tech boom, this is not a new concept. In fact, the first startup incubator — the Batavia Industrial Center — was formed in 1959. The Batavia Industrial Center was founded in response to Batavia, NY’s high unemployment rate and as a way to repurpose a vacant industrial building. Given the origins of the business incubator, it makes sense that the concept is making a huge comeback during the time of the Great Recession.
Phase 2) Build Your MVP
The purpose of this next step is to test your product hypothesis with the smallest possible investment of time and capital, hence, minimum viable product. In this way you are proving demand and learning about customer behavior, while minimizing risk. Once you put your MVP out into the wild, focus on getting users flowing into your product — this is where the seeds of initial startup growth are sown.
What are the Most Common Startup Incubator Services?
Here is a list of the most common services provided by business incubators:
- Help with business basics
- Networking opportunities
- Marketing assistance
- High-speed Internet access
- Accounting/financial management assistance
- Access to bank loans, loan funds and guarantee programs
- Help with presentation skills
- Connections to higher education resources
- Connections to strategic partners
- Access to angel investors or venture capital
- Comprehensive business training programs
- Advisory boards and mentors
- Management team identification
- Help with business etiquette
- Technology commercialization assistance
- Help with regulatory compliance
- Intellectual property management and legal counsel
An incubator helps a new entrepreneur tackle the initial hitches. Not only does the incubator provide the much-needed infrastructure support — desks, technology, etc — but it also helps entrepreneurs in testing their products and getting the feedback from the industry veterans.
