As Peter Relen, angel investor, and founder of YouWeb Incubator, correctly points out, “incubators are a market segment in their own right.” He also suggests that incubators and accelerators can be considered startups, and since 9 out of 10 startups fail, incubators have a tough time proving they are worth their salt. There are thousands of accelerators and incubators operating worldwide, and each of them follows a slightly different format; they all, however, have a few commonalities that make them ideal environments for startup success. Here are four elements of a productive incubator ecosystem:
Culture of Collaboration
Great incubators provide more than access to investors and inexpensive (or free) office space. Startups should look at the teams around them for ideas, lessons learned, and even the occasional helping hand. As Relen points out, the success of one startup in an incubator raises the prospects for others in the form of more visibility for the incubator and more interest from mentors and investors. Even if you are helping each other succeed, you can still maintain that level of friendly competition that your business an edge.
Most startups operate in a lean capacity, meaning their team members often have to wear different hats to bring their ideas to fruition. By bringing in startups and organizations with diverse team members, ideas, and experiences, incubators can create a richer resource network that all teams can benefit from. This is especially true in the tech startup world, where programming languages are so diverse and specialized; it’s convenient to be able to consult with startups who specialize in other programming languages when a new client or project comes in.
Strong External Network
A strong external network of mentors, advisors, and investors is one of the most crucial elements that leads startups to success within an incubator ecosystem. It’s easy for startup founders to get caught up in their business, and having those external experts for advice helps entrepreneurs carve out the right path for their startup. Even if you don’t succeed in securing funding or investment, being able to pitch your idea to big business names is part of the startup learning process.
A Clear Mandate
While diversity is important, great incubators must have a clear mandate to help guide which teams they select and how they approach the acceleration phase. Incubators and accelerators are starting to become more niche than ever, some choosing to focus on helping startups operating in a certain vertical (i.e. mobile, health, and fitness, etc.). The Letzgro Engineering Incubator in the Ukraine brings in startups to help CEOs find their perfect CTO counterpart. We consult with teams to establish the right development structure for their business in exchange for equity. Find out more about Letzgro’s Engineering Incubator.