- Seal of approval. When you’re nobody, it’s good to be associated with somebody! As an incubated company in a prestigious institution, when you go out to look for partners, clients, or capital, you can at least show some credentials. People will know that you have gone through a selection process and were capable enough to enter the incubator. While hopefully understanding you’re still a startup, they will have more confidence in your ability to commit and deliver than if you were unknown and unaffiliated.
- Administrative support. May not seem as much, but when you’re only a couple of people (or worse, a lone wolf) it is very important to have accessible support to mundane – and not so mundane – tasks, so you
have more time to focus on the important stuff. You want to spend as much time as possible developing your business. Admin help usually comes in the form of a common assistant, interns (especially if the incubator is related to a university), affordable bookkeeping, CPA and legal services, as well as access to basic office gadgets and supplies.
- Facilities. Good incubators offer you a nice-enough office, with common meeting rooms and a professional atmosphere – certainly much more than your bedroom or garage! This comes in handy when you need to meet with clients and partners, or interview candidates. It is also good for the entrepreneur’s moral. I was able to get much more work done after walking into a decent office, in a nice building, surrounded other entrepreneurs, than working from home. Also, incubators usually offer
flexible and affordable rent and utilities, which you won’t find elsewhere on your own.
- Cross fertilization. Being close to other entrepreneurs is great. You are able to interact with like-minded people, most of whom are going through some of the same issues you are facing. You share tips and experiences. Startups in incubators tend to help each other out, and often engage in partnerships and become each other’s clients. I did business with two fellow incubated companies. At the very least, at the end of the day, you
feel you’re not alone. Also, if your incubator is affiliated with a university or company, you may develop fruitful R&D partnerships and have access to great talent.
- Mentorship and professional services. Incubators are catalysts for mentors and consultants. I was often approached people wanting to help: some for free, some for equity, others for fees. Not all help is the same, of course, and in most cases I passed; but one can find specialized help more easily than if working alone. Incubator managers usually have a Rolodex with contacts of designers, marketing specialists, biz dev folks, engineers, coders etc, who worked for previous incubated companies and are just one phone call
- Access to capital. All types of early stage investors – angels, seed funds, venture capital – have their radars on incubators, especially the ones with a successful record of spinning good companies. Incubated businesses are often approached investors, either one-on-one or at pitching
or entrepreneurship events. Also, incubators usually do a good job of opening your eyes to funding opportunities you never knew existed, including government and small business grants and subsidized loans. My first company earned a large government grant from the Brazilian government thanks to the hint we got from Genesis and their help in filling out the forms.
- Connectivity. Besides connecting with fellow incubated companies and adjacent resources, there are several national, regional and even global incubator networks and programs, such as Brazil’s Anprotec and World
Bank’s global infoDev. This means that if you need to internationalize your business, find strategic partners in different countries, or benchmark
experiences, being in an incubator can also be useful.
Of course, don’t expect miracles. The success of your business ultimately depends on your company developing products and services people care about, and your ability to adapt and innovate. Also, if you join an incubator, don’t necessarily take all advice you get at face value; people are just people, some are more insightful than others, and not all incubators attract the best talent. But if you’re starting out, that’s definitely a good place to consider.
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