There are many incubator/accelerator/academy/early stage investment “program” in the world. To understand them, I try to categorise them into 3 key components:
1. The investment piece – this piece right now is usually provided by the program itself – either because it’s getting funding from some forms of government grants or land use (or in social enterprise, from philanthropic sources) or it’s really an investment company in hope of that some of its huge number of startups it invests in will get some further interests from VC or other bigger investors.
2. The education piece – by helping startups find the mentors, networks, training, get them in right direction, etc.
3. The infrastructure piece – right now this is mostly tackled by co-working place which they provide some form of working space, networking opportunities among peers and basic admin such as postal address, mail/call handling, etc.
For 1 – I think it demands a drastic change in model. Right now, unless the program underwrites the entire risk (most of US programs are and some argue whether it’s sustainable), it’s hard to operate in long term using grants and worse, it’s not scalable using grants. Also, there will always be a gap between what the program can get these startups to and where the VCs are interested in. This is why I think it’s crucial to convince a group of investment companies (called them alliance?) to allow the program to be their collective ‘scout’, ‘start-up agent’, or simply outsourcing x% of their current budget on deal sourcing. This alliance needs some shared interest and should probably be board members of this program. It is also this alliance that will attract startups to join the program (because they know the money is there if they are ready).
For 2 – apart from helping the startups, there is another huge opportunity that no one talks about – what should we do with the ‘fail’ start-ups? This group of people is actually ideal for many companies – from startups to large corporations.
For 3 – apart from those basic infrastructure, the market demands the program to provide more ‘shared services’. Imagine there is an internal team that serves the startups on their book keeping, intermediate IT (web site setup, digital marketing tools and techniques), distribution network (say they want to put something on sale in a supermarket) so the startups can actually focus on their actual business/product?