What is a Business Incubator?

Managing a team is a heavy responsibility. You wake up thinking about the payroll and you go to sleep thinking about whether you gave your staff the right tools to succeed. The fear of missing something critical is a constant companion. You want to build something that lasts, but the path is often blurry. You are not looking for a shortcut. You are looking for a solid foundation. In the world of leadership and organizational growth, you will likely encounter the term incubator. At its most basic level, an incubator is an organization designed to help startup businesses grow and succeed. It provides a supportive environment where new ideas can be tested without the immediate, crushing pressure of high overhead costs. For a manager or owner, this means access to free or low cost workspace, mentorship, and technical expertise. It is a place where the focus is on the long term health of the venture rather than a quick exit.

Building a foundation with an incubator

An incubator acts as a protective environment for a business in its earliest stages. Instead of facing the market entirely alone, you get to sit in a space where others are doing the same. This proximity to other founders can alleviate the isolation that many managers feel. It helps reduce the overhead costs that often kill a business before it truly starts. When you are worried about every dollar, having a shared infrastructure allows you to focus your energy on your people and your product.

• Shared office space reduces rent and utility costs which preserves your capital.
• Access to high speed internet and meeting rooms provides a professional image for your team.
• Regular workshops and training sessions help bridge your personal knowledge gaps.
• Networking opportunities with other founders provide emotional and practical support during hard times.
• Access to specialized equipment can lower the barrier to entry for technical products.

Incubator vs Accelerator

People often use these two words as if they mean the same thing, but they have distinct differences. An incubator is focused on the birth and early nurturing of the business. It is often open ended and can last for several years depending on the needs of the company. An accelerator is more like a sprint. Accelerators usually work with businesses that already have a product and are looking to scale very quickly. For a manager, choosing between the two depends on whether you need a home to grow in or a fuel station to speed up.

• Incubators focus on the idea and the initial setup of the company structure.

  

• Accelerators focus on rapid growth and usually take a portion of your equity.
• Incubators are often non profit or government funded to support local economic growth.
• Accelerators are often venture backed and highly competitive with a fixed end date.

When to use an incubator

You might consider an incubator if you are still trying to figure out if your business model is sustainable. If you are a manager who has just spun off a new department or a new venture, this model can provide the structure you lack. It is particularly useful when you need to prove a concept before hiring a full team or committing to a long term commercial lease. It gives you the breathing room to be a better leader because you are not constantly fighting the fires of basic office management.

• Use one when you need a physical space but cannot afford a long lease.
• Consider it when you feel isolated and need a community of peers to bounce ideas off.
• Look for one when you require specific technical equipment or labs that are too costly for a small team.
• Join one when you need a mentor to look at your business plan with fresh and objective eyes.

The unknowns of the incubator model

While the benefits are documented, there are questions that remain for every business owner. There is a risk that the culture of the incubator might bleed too much into your own company. You have to wonder if you will start to look and act exactly like every other startup in the building. We also do not always know if the success of a business is because of the incubator or if the business was simply destined to succeed anyway. These are the variables that a manager must weigh carefully.

• How much does the specific location of the incubator influence your future growth?
• Is the mentorship provided always relevant to your specific industry niche?
• Does the safety of an incubator delay the hard lessons you need to learn from the open market?
• Can you maintain your unique vision while being surrounded by outside advisors daily?