What Can An Incubator Do For Me?
Starting a new business is incredibly difficult, and the failure rates are shockingly high.
It’s an isolating experience – you begin with no team, no customers, no board, no fans.
There’s a seemingly endless list of things to be done, and you quickly feel overwhelmed.
Then comes the FOMO – your news feeds will be full of “helpful stories” of entrepreneurs who have made it, but without actually telling you the steps involved.
For this reason, most cities have startup incubators, a relatively new style of organisation that helps new businesses find their feet in a short space of time.
These aren’t for everyone, but they might be for you.
Here’s what you’ll find:
Benefits you would expect:
Access to expertise
Everyone has gaps in their knowledge.
Some are things you know you need, like legal structures, financial models or logo design.
Some are things you didn’t know you needed, like learning how to set up a high performance culture, how to grow your online presence, or how to design an experiment.
Advisors are good, but teams of advisors are even better.
You can borrow their talents to avoid making mistakes and check your work as you go.
Access to networks
Incubators can provide exposure to a range of networks e.g. the incubator team, cohorts past and present, investors, media outlets and banks.
These can be invaluable for finding customers, partners and staff, or having well connected people share your updates on social media.
Access to a space
Incubators usually have great workspaces – they can be super clean or the right kind of grungy.
These are spaces to work ON your business rather than IN your business, and changing locations can be great for changing your thought patterns.
These are places with comfortable chairs, big whiteboards, communal kitchens, meeting room and high ceilings – all designed to make you feel upbeat and productive.
Opportunity to pitch for investment
Whilst the obvious benefit here is the dollars, there’s also a lot of value in bringing on a talented investor onto your board.
Investors will give you great feedback even if you’re not successful.
In fact, most of the benefit is in being able to win over an investor, rather than the deal itself.
Benefits that might surprise you:
Inspiration from peers
Hearing other entrepreneurs talk about their situation is like jet fuel.
You can copy their steps, hear their questions get answered, share in their successes, or even have envy fire you into action.
These are the benefits of being in a cohort; it’s easy to lose perspective on our own, but seeing others grow is incredibly motivating.
Sounding boards
Your mood might change by the hour or day, but other people will see your work through quite rational eyes.
This is great in two ways:
Firstly, you’re supported when you’re feeling pessimistic and anxious, but you’re not indulged when you become obsessed with a bad idea.
Secondly, because the good and bad ideas originate from the same place, having a good sounding board helps you separate the winners from the distractions.
Being challenged
Similar to the sounding board, there’s tremendous value in having someone you know and trust challenging you in a polite way.
Some of your assumptions are wrong, and if mishandled these could sink your business.
A person who will ask tough questions in a high-trust environment can help you recognise the traps that are limiting your success –
e.g. your prices might be too low, you’re targeting the wrong customers, your assumptions about the market’s enthusiasm might not match reality, etc.
Having sat on both sides of this table, I can tell you that these conversations can be transformative (even if they’re hard going at the time).
Prescribed books
The cost of a book isn’t the dollars, but the time commitment.
For that reason, a lot of people are hesitant to invest in business books when there are so many out there.
Someone who understand your situation can prescribe you a relevant book – the right insights at the right time.
This takes out risk, and often alerts you to great authors you may not have otherwise encountered.
Structure
As much as we’d like to think we know exactly what we need, there’s enormous value in having someone check our blind spots.
It’s like ordering the banquet at a restaurant – you get some of everything, and you might not have otherwise ordered the things that end up being your favourites.
Constant gentle pressure
In the book “Setting The Table” Danny Meyer talks about the secret to shaping culture.
He calls it “Constant, gentle pressure”, a way of calmly fixing problems and gradually making your systems better.
This is such a good description for what an incubator can do for you.
Instead of energy spikes and huge events, you find your idea gets stronger and stronger by the week, sometimes in ways that are barely perceptible at the time.
What an incubator doesn’t do for you:
Unconditional agreement with your ideas
You don’t want this.
Some of your ideas suck.
Guaranteed investment dollars
Some groups offer this, which sounds fantastic.
They can come with a lot of strings and low valuations.
You don’t want that – better to strengthen the business first, then think about selling equity.
Permanent workspaces
You’re thinking of co-working, which is different.
We’d love to see you here 1-2 days a week, but you need another office.
Magically make sales
The incubator team can provide clarity and sometimes suggest leads for you.
You’ve got to do the legwork.
Outsourcing work
You can’t set people tasks like they’re your staff.
It probably wouldn’t be that helpful – like asking your personal trainer to lift the weights for you.
If this sounds like you, please feel free to send me an email with any questions you have, I have strong opinions on how to tell if a particular program is right for you.
For more on investment, you’ll enjoy this cheat sheet
For more on startups, you’ll like this list of traps to avoid and my ebook on building a strong business model
