Martin Zwilling, founder of Startup Professionals, recently wrote an article entitled “Can Startup Incubators Really Help You?”, in which he outlines the benefits of joining a startup incubator. He says that although attending a program like the Founder Institute isn’t a magic wand for success, “if you do land a coveted spot, here are several key lessons I assert you can learn from a good incubator."
Listed below are Martin Zwilling's 7 key lessons:
1. Aptitude-reality check. Adeo Ressi believes his preliminary test of applicants is predicting more and more accurately whether you have the DNA of an entrepreneur, before even being accepted. His tests focus on personality traits alone (ignoring your startup idea), looking for fluid intelligence, openness, and agreeableness. Why spend years struggling and all your money if entrepreneurship is just not your thing?
2. Initial funding. Many incubators do provide seed funding for entrepreneurs selected, usually in small amounts like $10,000 to $20,000, and usually taking 5 percent to 15 percent of your equity in return. This investment can get your startup off the ground in an otherwise impossible financial situation, but should not be viewed as the main reason for joining.
3. Expert mentoring and training. In my view, the quality of incubator leadership is the single biggest potential value provided and learning opportunity for entrepreneurs. Every successful incubator has strong leadership and staff with business and investment credentials. Skip the ones that seem to be offering you space and facilities only.
4. Peer support. In addition to the formal mentoring, the peers you’ll be working alongside at startup incubators provide much more than emotional support. You will find expertise in areas you need, as well as quick advice from entrepreneurs just ahead of you in every phase of the business cycle.
5. Ample resources. Of course, we can’t eliminate the value of affordable office and meeting space, administrative support services and advanced communications technology to struggling entrepreneurs. But don’t believe the myth that incubators are all about ‘cheap rent,’ and avoid business incubators in otherwise vacant buildings.
6. Learn by doing. An incubator allows entrepreneurs to get their ideas out of their mind and out of the classroom, while still retaining a modicum of structure and discipline. That’s as close as possible to real experience, and there is no teacher like experience. It’s an opportunity to succeed or fail fast, with a minimal investment of time and money.
7. Follow-on funding and connections. Success in an incubator means likely access to venture capital and connections to industry gurus and business opportunities. About 80 percent of TechStars start-up graduates go on to raise venture capital or a significant angel-funding round, versus maybe 1 percent of all startups who seek funding.
He concludes the piece by reminding founders that "there’s no shortcut or substitute for the right mindset, hard work and a real solution to a real problem with a big opportunity". Click here to read the full article on Young Entrepreneur.