Success for a startup is often based on who they connect with and what they can learn from them, and an incubator is a great option to consider for where your startup can make connections. Over the past 10 years shared workspaces, incubators, and accelerators have had incredible growth. The challenge now is not whether to join one of these communities, but how to join the right one.
Evaluating a workspace should start with the startup looking at itself first. Asking questions such as:
– What stage am I at; idea, concept, pilot, or production?
– Who am I working with and what will the ownership structure be?
– Have I formed the legal entity?
– How will I get funding and what will I give in return for it?
Often using a tool like the Business Model Canvas can help sort out these questions. Once an individual/s has determined where they are in the process they can look to see what is out there in terms of workspaces to support their efforts.
There are the bare bones shared office spaces which don’t offer much other than low cost space. If a company is in production and does not need development or support this could be an option. Finding one with other companies in a similar stage where if nothing else there are common sections for lunch and Friday afternoon beers could work. These type spaces allow you to keep your head down and focus on the work at hand that is needed to grow a business. Need for expertise can be supplemented by joining networking groups and going to events at other incubators and university events.
Looking at incubators is another option. Some are on the quieter side, but others offer a wide range of workshops and access to mentors. The key here is to find the right people at the right time. Beware some of these spaces charge what look like potential mentors to come into the space. Often giving more of a sales pitch on what they can do, for a fee, rather than contributing to the community. One point I make to those that come into my spaces to do mentoring and workshops is that they are solely for information exchange and education. If business comes out of it as a result it is fine, but in my space the time is to be used on development. I’d suggest checking on this before signing up on with any incubator.
Speaking of signing up, another thing to keep in mind is what is included in the membership. To start can you pay month-to-month or is some type long term lease required. Depending on your stage you may not want to commit to a long term. If you run out of money you’re stuck will financial obligations. Should you grow quickly you may need a larger space that is not accommodated by the current facility. While looking at the space see who else is there. What other companies have things in common with what you need. Most incubators will let you talk to members, if not look them up on the web site and reach out to a few to find out what their experiences are and how they could help you determine if the incubator is the right space for you.
Other things to keep in mind are the mentor pool. Who are the mentors, can they help with your needs, and how often are they available. Also, look to see who else is in or comes to the space. If you are in fund raising model do angel investors come by, do they have pitch events, is the staff knowledgeable and are they willing to connect you to those that can help.
You see more and more about accelerator programs as well. Often these are highly selective and require giving up equity in exchange for getting access to expertise. Depending on the stage your company is in these could be a way to get to the next level. There is usually a major time commitment which makes it difficult for a company working full-time to support existing customers. Once this is figured out the founders, and I say founders since most accelerator programs do not accept single individuals, determine what they want to do they can move forward. These programs are usually about three months in length and culminate with a graduation that is a pitch day to potential investors.
In the past there were no workspaces that could help. Today there are a number. The key is finding what is right for your company and the stage you’re at.
George Vukotich, Ph.D.
George is the Managing Director of FinTank, a Chicago based specialty incubator focusing on the convergence of finance and technological innovation. www.fintank.org More about George can be found on his LinkedIn: https://www.linkedin.com/in/georgevukotich/