Do Startups Need a Programmatic Approach to Incubation?

It’s hard to imagine that Airbnb, currently a profitable unicorn valued at around $38 billion, was once a struggling startup on the verge of shutting down. This was, of course, before Y Combinator, Bay Area’s leading incubation programme, backed the online travel community and room-sharing platform in 2009. Besides financial gains, the biggest takeaway for Airbnb — and other Y Combinator alumni — has been the host of benefits the programme offers, that propels the startups on the path to success. Be it intuitively understanding the metrics startups need for sustained growth, the unparalleled networking opportunities with other founders and alums, or preparing founders to pitch their startups to potential investors, an incubation programme has much to offer.

A Global Trend

CNBC confirms an explosive growth in accelerator programmes in Asia, particularly in Singapore and Hong Kong. In the hugely diverse EU, too, startup programmes led by incubators and accelerators are fuelling innovation — from the Czech Republic to the Netherlands and Sweden.

India is also coming into its own as a startup hub. As per a NASSCOM-Zinnov report, over 210 active incubators and accelerators were added to the country’s startup ecosystem in 2018. Besides, the NDA government’s flagship Atal Innovation Mission has set up 101 incubators, of which 30 are operational. Even as India rises to the third spot in global startup ecosystem rankings, there is a critical need for the nation’s startups to participate in incubation programmes. Let’s examine why such initiatives have earned their place within the startup ecosystem.

Incubate, Ideate and Innovate

When an early-stage start-up enters an incubation programme, it aims to leverage value additions such as office space, expertise, mentoring, networking, potential funding and job creation, among other benefits. Such programmes help entrepreneurs jumpstart their business, identify problems, provide solutions and access new markets. Additionally, other service providers that help start-ups with finance, legalities, human resources and infrastructure are vital resources offered by the programme to aid fledgling businesses set off on the right foot.

Beyond short-term tangible gains, incubation programmes impact entrepreneurship by:

· Lending legitimacy to the startup and making it an attractive proposition to investors.

· Creating an environment conducive to growth and productivity.

· Serving as a reminder to startups that entrepreneurship is a level playing field where great ideas are moulded into lasting businesses.

· Demonstrating an enterprise’s power to transform lives and communities. Like in the case of Hyderabad-based Monitra, a budding healthtech startup, which was incubated at T-Hub, and that is in the business of providing innovative tech-enabled cardiac care to patients.

How Incubation Programmes are Making a Difference

The Telangana region has emerged as a hotbed for startups resulting in over 50 unique innovation-focused programmes in the state. For example, the Telangana government launched We-Hub, an incubation programme aimed at promoting entrepreneurship among women. Besides mentoring and knowledge sharing, the programme also offers its entrepreneurs affordable childcare and life coaching.

The Northeast is also fast catching up as a region for innovation and is home to several agri startups that are driving its economic growth. The AgriPulse Accelerate North-East Programme seeks to incubate agri startups by bringing together key stakeholders such as the government, investors and startups to accelerate growth in the areas of agriculture, horticulture, fishery and related activities. One of its most recognised startups, Intello Labs, uses AI-led solutions to measure the quality of crops and identify potential crop diseases. Another incubatee, New Leaf Dynamic Technologies, manufactures a refrigeration system powered by renewable energy using farm waste.

Across the world, governments are attempting incubation programmes with a difference. For instance, the Osaka Innovation Hub is a government-funded incubator that has upped Japan’s startup game. Similarly, Sting, Sweden’s leading accelerator and incubator, offers perks from office space and pitch training to job creation and coaching by experienced entrepreneurs.

Surviving Roadblocks

Despite the spectacular growth of incubation programmes, it’s been a smooth ride. There are multiple parameters that determine the success of incubators. Let’s look at some of them:

· A dearth of mentors with real industry knowledge and networking gravitas. Several incubation programmes also fail to keep the mentor-mentee relationship alive through a continuous churn of enriching interactions.

· The inability to support the needs of entrepreneurs in different domains. Be it inadequate infrastructure and the resources required for developing prototypes or the lack of tailormade coaching for niche business areas. Sensing this gap, the Kerala government set up small-scale workshops called FabLabs in collaboration with the Massachusetts Institute of Technology (MIT) to enable product designers to develop prototypes.

· A vibrant startup ecosystem. For instance, in some countries there could be lack of government and academic support to push for cutting edge innovation.

· Insufficient time invested in nurturing a community of like-minded founders, investors, mentors, and other players who will add long-term value to the startup landscape.

A Different Approach to Incubation

Despite such hurdles, global incubation programmes are attempting better outcomes for entrepreneurs. For instance, Moebio is a healthcare incubator in Barcelona that invites researchers in the medical technology field to participate in its incubation programme to ideate, develop and launch top-notch devices in patientcare.

Special mention should also be made of India’s academia that run some of the nation’s cutting-edge incubation programmes. For example, the incubation programme at Hyderabad-based International Institute of Information Technology (IIIT) is geared towards startups in the deeptech space. One of its alums, eBhasha Setu, has created a translation platform to remove language barriers among people by leveraging Machine Translation (MT) technology. Additionally, the Technology Entrepreneurship Programme is offered by the Indian School of Business in Hyderabad in partnership with the Telangana Academy for Skill and Knowledge, fostering entrepreneurship among engineering students by equipping them with the right tools.

Avoiding a Cookie-Cutter Approach

Critics of incubation programmes are quick to call out the dismal track record of incubators across the world. Yet, despite such criticism, incubation programmes have clearly become the mainstay of global startup ecosystems. While entrepreneurs evaluate if a programme meets their requirements, they must consider incubators as potential growth accelerators.

T-Hub’s incubation programme Lab32 was conceptualised for this very purpose and has nurtured several success stories. Startups chosen for the programme receive several benefits, including networking opportunities and mentoring, along with access to services from T-Hub’s premium partners like Amazon Web Services, DigitalOcean and Google Cloud.

Our experience has shown us that entrepreneurship is a two-way street. It needs both innovation by startups and a strong backbone mechanism from incubators and accelerators to aid in creating a new economy. In such an environment, a programmatic approach to incubation is essential for startup innovation.