If I had a dollar for every time someone in the past three months has said to me that they want to start an Aussie version of Y Combinator, I’d have at least ten dollars and there are no shortage of incubator models I’ve been presented, both formal and informal. Now a new concept is being shopped around by two veteran entrepreneurs aims to bypass all the problems of the many other Australian incubators that have failed before them.
Australians are keen to ape Silicon Valley and find new solutions to what’s holding back the nation’s startups, but before we begin coming up with more answers, perhaps we should make sure we’re clear on the questions. Beta, as they are tentatively calling the incubator, will offer startups a low-cost office space with a group of on-site mentors, still active in business, to answer the questions of fledgling startups. The incubator will be free of private and government interests and plans to draw funding from sponsors and keep overhead low with most of the fees to startups going to pay mentors and keep up with office costs.
The trouble is that Australian incubators aren’t just trying to answer one problem, they are trying to answer many. Finding desks, hooking up a wifi connection and hiring mentors are at least tangible things that can be attacked, but what about the intangible. It isn’t quite so easy to cultivate a climate of tech entrepreneurship in a nation where it isn’t exactly native, nor is it easy to make that intimate relationship between a mentor and a business person happen. Incubators themselves are difficult to sustain, it is a path littered with corpses, and many took hard hits in the economic downturn as people decided that things like in-house mentors and assistance were a luxury that they could save on in a cheaper office space. Beta does not plan to take cuts from investments the businesses receive, the way private groups like Pollenizer or Geeksville might do, and so their financial model and investment could be particularly tough.
So as these entrepreneurs continue to shape this new incubator concept, what role does an incubator serve in aiding the Australian tech startup community and what new elements can it provide. In addition, what price are you, the business owners and entrepreneurs, willing to pay for these benefits?
Other Aussie incubators to look at:
*indicates edits, email ipitch with questions
I think ATP Innovations is doing a pretty good job at addressing the issues you raise. There is particular emphasis on the close relationship between entrepreneur and mentor. When I was running the show a few years back we emphasised that physical infrastructure whilst important and sometime critical was secondary to the business development and mentoring function. ATP innovations has developed its own Australian Model and has never tried to mimic other centres overseas. I understand current management continue to support these philosophies and the constant >90% of success rate for graduates and annual investment in companies averaging close to $40M per year indicates the model is doing something right for both early stage and growth companies.
You and me both, Rachel - perhaps if we pool our $10 we could launch our own incubator.
Seriously though, I’d really like to see a few incubators at play in Australia as I don’t believe there is a one size fits all model to assisting startups make it onto and, eventually, off the runway.
My key messages to those who are looking at tilting at the incubator windmill are:
1. Find a core value proposition for your incubator.
What is the rocket fuel that you and your team can bring to the startups who you work with that they cannot get elsewhere. And this is not office space or commoditised services like accounting or sysadmin.
2. Start early.
Don’t wait until you’ve perfected your perceived model before getting things going — you are a startup too, which means you have room to test what works. However, bear in mind that this should never be at the expense of the companies you work with.
3. Think karma.
You are playing in a small market. One that has its fair share of sharks trying to screw cash out of startups. Rise above the snake oil salesman. Work to add value rather than working to extract value - you’ll be surprised at what a difference this can make. Downtrack you’ll have a bunch of successful entrepreneurs not only singing your praises but investing in and acquiring your subsequent portfolio companies.
The other flaw I see is the aim of aping silicon valley, that makes no sense to me.
If you mimic something, you will also inherit all the faults and downsides. What’s the sense of that. The advantage of starting later is that you’re not hindered by the weight that incumbents carry with them, while being able to use their lessons.
I also think that some of what Silicon Valley companies regard as fundamental have actually been proven false, but they won’t have put those items on their list of lessons.
Their definition of success pretty much equates it with growth and/or revenue. I think that’s a total fail. That’s actually a pretty big problem/discussion space, but I hope the brief mention here at least makes the point.