From Kyle Palantzas & Luke Armstrong of Coburg Consultants
The recipe is pretty simple, really. Find a bunch of motivated entrepreneurs who are similar enough to get along but different enough to learn something from each other. Put them all in one place with the tools they’ll need. Stir, stand back, and watch the innovation bubble over.
Business incubators, also known as accelerators, are “group offices” where multiple companies work simultaneously. The companies that use incubators are small and generally in the start-up stage. The hallmark of an incubator office is a large, open workspace that promotes collaboration and the mixing of ideas between people and between companies. Beyond the physical space, incubators provide access to business equipment, legal resources, mentorship, and network assets.
Incubators are often profit earning companies themselves, and sometimes take the role of a venture capital firm in the companies they incubate. By bringing the companies they invest in literally within their walls, the incubator venture capitalist is able to provide mentorship support and funding while reducing risk. The entrepreneur, usually at the cost of some equity, gets guidance from experienced business people, access to other startup owners around them, and does not have to worry about conventional office administration.
Government organizations may also be involved in business incubation in some capacity, as policymakers see the potential for spurring entrepreneurship in their polity. The concept remains the same – bringing motivated and skilled entrepreneurs under one roof to speed up innovation and increase the likelihood of success.
Incubators get a lot of attention from the business press. It’s no wonder why, as the success stories seem to pour out of these entrepreneurial hubs. The Y-Combinator in Silicon Valley, probably the most esteemed tech incubator in the world, is responsible for nurturing the growth of Internet giants like Reddit, DropBox, Scribd, and Airbnb.
Not all incubators are for flashy Silicon Valley startups. Canada’s own MaRS Discovery District houses a number of young cleantech and biotech companies. The entrepreneurs at MaRS’s beautiful Toronto campus work on everything from new solar panel designs to high-throughput genetic testing equipment.
Halifax has an incubator too. Innovacorp is an early-stage venture capital firm that supports and invests in potential high-growth companies from Nova Scotia. Dalhousie CRMBA student Kimberte William worked with Innovacorp through 2013 while developing a social app. William sees the value of incubators for budding entrepreneurs:
“Incubators aid entrepreneurs in accelerating towards commercialization by being in an environment conducive to innovation. Perhaps the greatest benefit to the entrepreneur is being surrounded by their peers. Incubators help entrepreneurs develop meaningful relationships that can be leveraged in the future. Moreover, this environment is a support system for entrepreneurs going through the growing pains of building a business.”
Even if you’re not an entrepreneur and not in one of the typical incubator industries, you should still pay attention. Big companies like GE, IBM, and Microsoft are funding incubators and even creating internal innovation-accelerators, trying to harness the power of collaboration for their own product development. Although we may not all be founding a new biotech startup, one thing’s for sure – no matter where you work, cubicle walls are coming down.
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