Business Incubation supporting Startups – What makes a successful model?

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Business Incubation programs are widely considered an effective tool that contributes to the development of a countries’ economy. These programs have seen exponential growth since the first program was launched in New York State in 1959. It is estimated there are more than 10,000 programs across the globe today.

 

Over this time, new concepts, models and types of business incubation have emerged as well as new names such as, technology incubators, seed and growth accelerators, innovation and entrepreneurship centers in addition to co- working spaces, makers spaces, innovation hubs etc. Each incubation program has its own method of implementation, its own field of focus, its own model, processes and period of support.

 

Where some only focus on supporting high-tech startups like the Houston Technology Center (HTC), others focus on startups with solutions targeting customer segments, like the Disney Accelerator. With such a range of successful, working models, certain questions are bound to arise:

How do we implement the perfect working model?

Will copying a successful model and implementing under different social and cultural conditions still guarantee success?

Will implementing best practices created in another ecosystem guarantee success?

 

So many factors can determine the success or failure of a program, notably how mature the ecosystem is, critical is the knowledge and skill of the business incubation management, and more importantly, how flexible is the model to meet the needs of your local entrepreneurial client base.

Adaptability and the ability to respond to rapid changes are key to the success of any incubation model, and this is true whatever the industry focus or its model, ownership and governance.

 

For example, the model of 500 startups, considered one of the more successful models and ranked as one of the best accelerators in the world by Forbes magazine and SARP, with years of success from 16 batches are still constantly developing their model and adapting it to the changes around them.

 

500 Start-ups have enhanced processes and methods pertaining to training and mentorship, they constantly review their size of investments, the type of startups they support and their geographic reach.

 

From a local perspective, the success of King Abdulaziz City for Science and Technology, BADIR incubator initiative can also be attributed to its flexibility and ability to quickly respond and adapt to the changes around it. At the start of the program in 2008, it had one ICT incubator and 7 companies incubated. To date it has incubated over 200 startups and established a network of five incubators in three differing technology sectors each having built on the learning of the previous incubators.

 

It has seen it’s support in ICT sector in the beginning limited to ventures and entrepreneurs focused on online forums and e-commerce solutions through to the hype of mobile applications. It has expanded into supporting biotechnology and manufacturing sectors with a range of innovative products and services.

 

BADIR has adapted by, reducing its incubation period, where necessary; raising its standards of selection and thereby its client quality; the nature of its client pipeline; developing and continuously improving its incubator management systems; continuously upskilling its incubator management and staff; creating an independent incubator monitoring and evaluation process;  installing a system for business development; and reducing reliability on external resources.

 

Changes have also touched on mentorship, coaching and training services to be more practical and together with adapting facilities to meet clients support needs, the program has become more client focused.

 

We see from the above, that incubation programs must enjoy a high level of flexibility as well as being highly adaptable, below are some tools that can help in this regard:

 

  • Review others experiences and practices

 

Keeping the program within the limits of its designed model, no matter how successful it is, won’t guarantee continuity or the development you hope to reach. Therefore, getting acquainted with other successful and even failed experiences is a very effective tool in broadening your understanding, coming up with innovative ideas and applying correctly to suit the local environment.

 

  • the model must align with the goals

 

Programs can’t just have a goal of graduating the highest number of startups and achieving quick success stories. If a program focuses on developing startups in the medical and biomedical fields, these startups take a relatively longer time to develop. It may be the program has social goals (increased employment) so it may not be reasonable to focus on potential investment value as a criterion for accepting startups into the program. The goal may be to increase entrepreneurial knowledge and skill and broaden the ecosystem which may not align with simply creating jobs.  Therefore, goals must be well defined before adopting or developing any specific model.

 

  • Bureaucracy is not just an obstacle, it can kill the program

 

Incubation programs support emerging businesses, which are characterized by rapid development and high flexibility, and keeping up with them is very important, otherwise leave the race, it will be much cheaper. Keeping to highly centralized authority matrices, and continuing with inflexible strategies, policies and procedures can lead to the failure of the program.

 

  • Give the entrepreneurs a role in development

 

Incubators are setup to serve entrepreneurs, so there really is no better way than to ask your incubated entrepreneurs what services and support they want, you then develop the best program based on their needs. Involving them in development and change of your program will reflect positively on the performance of the program. This can be done through periodic surveys that take their feedback on a continuous form as well as coaches and mentors continually checking with clients if they are delivering to their current needs.

 

  • Managing the program innovatively and like a startup

 

Startups are always operated with a high level of flexibility and adaptability to cope with the changes around them. Keeping the program in a startup mindset will ultimately help achieve the continuous success the program needs. Innovation is vital to incubation; it is what brings about change that is client focused.

 

 

So in short, the success of any incubation program will never solely be the result of the copying and the implementation of other models, types or styles of support. Rather, it depends on the level of flexibility that the program enjoys in its development and continuity whilst being client focussed.

 

Abdullah bin Abdulaziz Alzaid

Incubator Support and Development Director – BADIR

Twitter: @AbdullahAlzaid7

Tuesday 18 April 2017

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