The Best Startup Incubators Have the Best People
September 2, 2010 by Marty Zwilling
Business incubators for sharing services were all the rage back in the days of the dot-com bubble (700 for profit, many more non-profit). About that time the bubble burst, causing more than 80% of them to disappear. Now they are coming back, and the best even provide networking, technical leadership, and seed funding, as well as shared facilities and space.
By way of a definition, a business or startup incubator is a company, university, or other organization which provides resources to nurture young companies, helping them to survive and grow during the startup period when they are most vulnerable. The goal of most business incubators today is to strengthen the local economy, and commercialize new technologies. A few are still trying to make money doing it, but it is hard to make money off startups.
Most incubators today provide one or more of the following:
- flexible space and leases, often at very low rates
- business support services for a fee, including administrative support, telephone answering, graphic services, bookkeeping, copy machine access, and meeting rooms
- group rates for health, life and other insurance plans
- business and technical assistance either on site or through a community referral system
- assistance in obtaining funding, or direct seed funding
- networking with other entrepreneurs
Incubators differ from research and technology parks, in that most research and technology parks do not offer business assistance services, the hallmark of a business incubation program. However, many research and technology parks also house incubation programs. Another variation is technology business incubators, which nurture high-tech startups and present a technology oriented variant of business incubators.
To find what’s available in your area, take a look at the National Business Incubation Association (NBIA) web site, and use the lookup tool provided. This organization claims to be the world’s leading organization for advancing business incubation and entrepreneurship. Another sure-fire approach to finding what’s available is to check local university resources – almost every one offers some services along these lines, or certainly can refer you to local alternatives.
The only down-side I have heard is that many business incubators used to be notoriously high-pressure environments where a lucrative exit strategy was more important than the half-baked products. If that’s the toughest problem you face as a startup, then you probably didn’t need an incubator in the first place.
The up-side is that startup incubator programs allow new startups to benefit from the wisdom of other startups and veteran companies through mentoring and by co-existing — in the same office or through the same venture funding — with other startups.
Incubators I hear mentioned most often include YCombinator, led by Paul Graham in Silicon Valley, and the VT KnowledgeWorks Business Acceleration Center at Virginia Tech, led by Jim Flowers. Both provide excellent networking, relationship building, and on-site technical leadership, which I believe sets them apart.
Jim argues that the real value of an incubator is in the relationships, and these work best when the entrepreneur has selected a real market opportunity, and plans to address it in a unique, powerful, and direct manner.
For that reason, he is a strong proponent of screening prospective clients carefully, selecting the best ones, and assuring that they can handle responsibilities, like paying the rent, and “graduate” in a timely fashion to stand on their own two feet.
Thus, if you are looking for an incubator for “free” money and services, you should think again. Look first for people there who can help you, by their introductions, mentoring, and experience. A successful startup is more about the right people than the right amount of money.


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