Photo by Nataliya mogeemkrainian
Before you join an incubator, read this.
I remember the day I attended the introductory meeting of a Startup Accelerator. It was filled with inspirational stories from people who started small, with no money; persisting until they’ve now become titans of the business world.
Up until that day, I thought that every business had to start with a hefty bank account. As I was introduced to the world of entrepreneurship, startups, and minimal viable products (MVPs), I was excited. I couldn’t wait to get started on the idea that I had and so, I joined the accelerator, got to work, and after 3 months, my idea won the Audience’s Choice award during our final presentations.
The world of an entrepreneur is an exciting place with lots of stages and changes. One of those stages may include joining an incubator, and that feels like: “Wow! I’m on my way to success. I’m going to get support, mentoring, access to experts and investors!”
First let’s define what an incubator is: In business terms, it’s an entity that promises to help a small business thrive, with support, mentoring, and guidance. It could open doors to new opportunities, introduce the start up to influential people, skilled professionals, and even investors. Before you set your sights on joining a startup incubator though, here are a few things you should know:
1.You will Get Space to Work
Pros: Usually at a lower cost compared to renting an apartment or factory, with services such as WIFI, a business center, a coffee station, and meeting rooms. It’s a space for the team to focus on their business, near their mentors, away from their day jobs and their homes.
Cons: It’s not free, and it can be expensive. At the end of the day you’re paying rent, and in some cases you may be asked to pay for the services, which can be an unnecessary cost for you.
2. You Get a Business Address
Pros: The incubator’s address can serve as your work address, which is needed for opening bank accounts, creating a commercial registration, and applications for various licenses.
Cons: If you leave the incubator, you should be ready to update all your documents, portals, and accounts to reflect your new address, which is extremely time consuming.
3. Networking and meeting new entrepreneurs
Pros: This presents the opportunity to meet new people, share ideas, and barter services. For example a graphic designer from one team could barter his/her services for Tech services from another startup. It’s also a great way of reaching new customers and raising awareness about your business via cross promotion: The graphic designer will show off his skills designing the IT company’s logo, and mentioning what kind of services they offer, while the IT company raves about how much they love their new logo.
Teams can also merge to form a new business because their ideas complement each other’s.
Cons: If the incubator hosts startups with products or services similar to yours, you’ll need to protect your ideas. And sometimes, you can’t help but stress about the competition.
4. Ease of Access to Individuals in Government Sectors
Pros: Usually in an incubator the director has a network of government officials and VIPs that could assist the startups when making decisions or looking for assistance in government procedures. It is much easier to contact a person directly than to try to navigate a website, visit a distant location, or try to reach officials by phone or social media.
You’ll get your questions answered quickly by the right people, and this can have immense impact on your business. Personally, I couldn’t have gotten my licenses without the people I came to meet through the incubator.
5. Access to Experts
Pros: The incubator will invite professionals for a day or two to meet with the startups. Financial experts, marketing pros, lawyers or branding gurus can come in and meet with the startups answering questions and offering advice.
Cons: If the service is free, your time with these consultants is very limited. If the consultant is willing to take you on as a client, they may or may not give you a discounted price for their service, and you may or may not be able to afford it.
6. Presentations and Workshop Opportunities
Pros: These presentations by professionals are usually very helpful and consolidate a wealth of knowledge and experience in as much as an hour or two. Startups are encouraged to ask questions, and the presenters are usually open to sharing their contact details for future support or hiring. These presentations can also be inspiring and give you that push to on keep going.
Cons: Attending too many presentations and workshops can become a distraction from doing real work. Consider letting one member attend on behalf of the team. Another thing, although presentations are usually free, workshops are usually not. As an entrepreneur you have to consider when and how you’re spending.
7. Helpful Employees within The Incubator
Pros: They can help with guidance on procedures, or suggest the right contact person for an issue. In the incubator I joined, there was one friendly lady I could always go to, and if she didn’t have an answer she was nice enough to say: “I’ll find out and get back to you.” She always did.
Cons: Like any workplace, you may not always like everyone you work with, and some people might not act professionally. Have you ever been promised a document or a service by someone that you need to do your job, only to have them lead you on for two weeks then simply say ‘sorry, couldn’t do it’? It could happen in incubators too.
Do the pros outweigh the cons? I think it depends on your business model, how many team members you have, their skill set, the incubator’s services, and what you hope to gain.
The more members you have, the less financial burden there’ll be on each person, and the more work you can accomplish as a team, generating more revenue.
Do your research on the incubators in your area, speak to people who have been there. Speak to people who have left. Ask yourself why you want to join, and set a plan with goals that you can measure at the end of the contract.
I have been a solo entrepreneur for 4 years now, and for me, joining an incubator did not work out. If I could go back in time knowing what I know now, I would hold back on renting space. Maintaining it distracted me from the core of my business.
My experiences have reshaped my perspective on entrepreneurship, and I’ve learned not to rush the process. I’ve learned that being tipped off balance is part of business, and just like one’s physical balance, regaining your balance in business depends on how strong you are at the core.