Are Incubators Jumping the Shark – Have We Over-Hatched Innovation?

At the end of May, Silicon Florist announced that Portland had gained it’s 11th start-up incubator/accelerator. Really. Is this a positive for people looking to launch companies from products ideas? I’m not sure.

With 11 places in Portland, if each had 10 spots for companies, there would be 110. Are there 110 original product ideas here? (I highly doubt it). If roughly 90% of them will tank that leaves 11 companies with a fighting chance to rise to the top. Maybe one will be the next AirBnB, and which of these 11 accelerators will be holding the golden equity ticket.

The offerings these incubators dangle in front of applicants looking to join certainly can be appealing. Access to their network of mentors, industry contacts and an array of business skills for roughly 18 weeks your company will be there occupying office space.

Before you sign your company up I would investigate what you’re really going to get out of the experience. As part of the deal of entering an incubator, you’ll be giving them between 5-10% of an equity stake in your company so it’s worth your while to take the time. Do the incubator’s industry coverage and contacts align with what you’re looking for? The mentors they have associated with them aren’t going to be there every day – who is? and how will they benefit you?

My concern is that many people out there dreaming of being the next big thing, have the impression that the only way to get a foothold is through an incubator. Building businesses around products takes time, iterations and customer support. Some of the best innovation happens by extended iterations and/or sheer luck.

Personally, I’m not a big fan of giving away equity at an initial company stage. I think you run the risk of not being able to experiment with product iterations or sidelines – areas where true innovation could happen. As someone who is comfortable with risk, I’d rather bootstrap an idea along and see where it takes off rather than worry if my idea fits into an incubator mold.

I understand that incubators can offer valuable help and services to companies, but I think they need to be looked at as a “nice to have” as opposed to “need to have”.

What do you think? Would you launch a start-up with out going through an incubator?

One thought on “Are Incubators Jumping the Shark – Have We Over-Hatched Innovation?

  1. Pingback: Established Companies As StartUp Incubators. | Douglas E. CastleDouglas E. Castle

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