Startups are hard.
When you’re tempted by the possibility of a fail-proof way to accelerate your company’s growth, be wary. There are simply no shortcuts to success.
For too many entrepreneurs, this is what the idea of a startup incubator has become.
Globally, the business of incubators and accelerators has exploded. Billion dollar Silicon Valley success stories about notable incubator and accelerator alum have given rise to a false sense of guaranteed prosperity. Startups are tripping over themselves to join. “What’s a little equity, when my company will become the next Facebook?”, founders ask. Convinced that by simply signing up, they’ll ride a wave to funding, customers and a massive exit.
So, let’s dispel the incubator myth. There is nothing magical about startup incubators.
What is magical, is the opportunity for a crash-course in running a company. Learning the ins and outs of the unglamorous jobs founders must master – fundraising, recruiting, product marketing, competitive intelligence and P&L management – to name a few.
You want an incubator to make all your dreams come true? Sign up, show up and work like your future depends on it. When battle-tested mentors tell you that your business model is flawed, will you pull all nighters to prove them wrong, then just as passionately pivot when you learn they’re right?
Realize this: future success, future funding and future customers don’t care that you were in an incubator. Use the experience to build a bulletproof business with a clearly addressable market and a leading product to serve that market.
IF you believe an incubator experience is right for your company, here are four key things to consider before you join –
1. If you want to be the best, join the best.
Incubators are only as valuable as the mentorship and peer community they offer. What is the track record of alumni startups? Ask to speak to former members. How successful have mentors and advisors been personally? Consider their funding, go-to-market and investment track records. How rigorous are application standards? What are the qualifications of participants? Passion and success feed off each other. Do everything you can to work alongside people that demonstrate these.
2. Work like hell.
Success is not a guaranteed byproduct of incubator. But if you work everyday like the future of your business depends on it (because, actually, it does…) the perks of incubator life can accelerate your growth. When paired with a ridiculous work ethic, office space, mentorship, classes, networking, accountability and collaborative opportunities with potential future employees, partners or investors can become catalysts to your success. But they’ll never guarantee your success.
3. Learn from everything.
The right incubator will give you an opportunity to validate your business and market before you’ve wasted months or years. It will provide unbiased, brutally honest mentors to give you new perspective. Different viewpoints will help, but the greatest opportunities for learning come to those who are looking for them. Ask questions. Be curious. Take notes on peer companies and other co-founders – what do they do well, poorly? Is there something from their product’s user experience, their leadership methodology or sales pitch that can translate to your business?
The right incubator will give you thousands of opportunities to learn, they just might not come from a book.
4. Weigh the cost(s)
Everytime you say yes to doing something in your business, you’re effectively saying no to something else. When you give up equity and commit hours to the incubator, you are trading time, energy and potentially valuable ownership for the experience. There better be a compelling business case for it. If your defense of the decision to join begins with, “they have free office space and decent coffee…”, tear up your application.
The illusion of VCs drooling to fund a business on incubator graduation day has proven a tempting hook to startup entrepreneurs. Be realistic. Startups live and die by their ability to acquire customers, not paper diplomas on incubator-graduation-day.
Rigorously consider the best next step in your startup’s pursuit of sales traction. If a particular incubator is what is right for you, join and give it your all. If it isn’t, trust your instinct and keep building.
Thanks for reading! Look out for the next post in the funding advice series next Thursday.
