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What are the main drawbacks and main benefits with incubators?
Hello! Thanks for your question about benefits and drawbacks of incubators. In short, the benefits are: business strategy planning support, business plan development, pitch day or similar showcase event, access to peer mentoring, business etiquette & presentation skills training and the drawbacks are: balancing incubator offerings and start-up execution, predetermined duration, competitive environment, single mindedness, and restricted number of team members allowed at the incubator. Below you will find a deep dive of my findings.
RANKED SUMMARY: BENEFITS
In a 2014 survey conducted by Aspen Network of Development Entrepreneurs, start-ups ranked the value of typical accelerator services before and after the program. Below is a list of the highest ranking attributes as seen after the completion of the program.
1. Business strategy planning support
2. Business plan development
3. Pitch day or similar showcase event
4. Access to peer mentoring
5. Business etiquette & presentation skills training
RANKED SUMMARY: DRAWBACKS
Although I could not find a predetermined ranking of drawbacks below is a list of drawbacks mentioned throughout multiple sources.
ADDRESSING THE DRAWBACKS
In his article, Jacques Mattheij says “Almost every ‘pro’ for an incubator translates in to a ‘con’ as well”.
1. Balancing incubator offerings and start-up execution- It was stated, that unless the incubator is industry specific it can be distracting. Incubators that provide a “light touch” for the start-up give them the benefit of supporting goals but allowing them to fulfill their mission.
2. Predetermined duration- Every business is different, so having a predetermined time frame can hinder the success of the start-up. The research based optimum time frame is 3 months but some business models require more time. The best way to address this issue is with needs-based duration.
3. Competitive environment — Multiple start-ups with similar goals and pursuits can produce a multitude of challenges, including competition for resources. Placing complementary or non-competitive cohorts allows for each start-up to build “long-lasting, sustainable businesses”.
4. Single mindedness- Blended benefits of a multitude of incubators provides the participating start-ups to receive the best services thus increasing their odds of success.
5. Restricted number of team members allowed at the incubator — Communication and re-evaluation should be addressed as each milestone is reached, including structure and what works best for each start-up allowing services to be tailored to specific needs.
CONCLUSION
To wrap it up, the benefits of incubators are: business strategy planning support, business plan development, pitch day or similar showcase event, access to peer mentoring, business etiquette & presentation skills training and the drawbacks are: balancing incubator offerings and start-up execution, predetermined duration, competitive environment, single mindedness, and restricted number of team members allowed at the incubator. Thanks for using Wonder! Please let us know if we can help with anything else!