Startups, 3 reasons to skip that Incubator
Startup incubators make sense some of the time, but make sure they actually have what you need before committing the time & effort to join.
If you’re here it’s likely because you either are have been invited to join an incubator or are seeking one out for your start-up. Either way, you’re going for it and that is amazing.
With all that said, you are going to want to take a quick breath and make sure that you are putting yourself in the right situation early on. “Right” in that by joining one of the potential incubators you will actually be better off as a person and/or as a company.
I’ve personally been through two incubators and one accelerator while I was growing my company early on.
Looking back, I wish I would have had someone provide this guidance for me at the time. Here are my big three reasons that you should pass on an incubator and go at it alone until you find a better fit.
1) They do not have the mentors you need
It is absolutely vital to your success that you have a great mentor early on. “Great” is a shitty word so let me unpack.
You need a mentor that has either A) started a company from scratch as well (preferably in your business space) or B) both has a ton of amazing industry connections and will actually make those intros/connections for you.
I’ve been in the game for a long time and I cannot say this adamantly enough — if your mentor (potential mentor) has never started a company, they are going to be of zero help to you early on.
I don’t give a damn if they have been an executive as XYZ megafirm and made millions of dollars of sales, blah, blah, blah. None of that is going to help you because they have no idea how to build a company or how to do the tasks needed to be successful (or not die) early on.
Here’s the best way to tell if the potential mentor has no fucking idea what they are talking about — while you are putting together a unique Beta product and possibly have a brief landing page published, they are advising about all the CRM software that you should start paying for and regurgitating cliche phrases from various start-a-company books (Steve Jobs and Henry Ford quotes are a classic tell).
Yea, no thanks.
Early on, every day is a crisis. If this person has never fought the good fight, then they have no business telling you how to do it.
The second side of incubator mentors to look out for are those that name-drop all day, but actually make zero connections for you. This happens all of the time and it is more often than not because that person is full of shit.
They will make the argument that “it’s too early”, “you only get one shot so we should wait”, or, even better, claim that they will make the connection every time you talk and then “forget” every time as well.
Let me give you some advice — it’s never too early, you get as many shots as you want as long as you actually make something valuable, and if someone “forgets” a lot, they aren’t forgetting.
So your first absolutely crucial due diligence piece before joining the incubator in question is to look into what mentors they have affiliated and active with the program. If they have no mentors, pass. If they have mentors, but they all are old retired executives who never started a company, pass. If none of them are in your space (the exception being legal and possibly B2C marketing mentors), pass.
This should save you from an ongoing headache.
2) They call it an incubator, but it’s really just you paying for co-working space
I’ll lead with a very factual counter-argument and then hop into my case. Office space is expensive as hell and, in certain scenarios, joining an incubator that gives you an office/desk/stool for a below-market price could be a good decision (if you actually use the space and don’t just end up working from home).
OK, back to the bashing.
Many incubators will charge you anywhere between $100-$500 per month for access to their co-working space and other “amazing” bundled offerings.
These amazing features include:
The mentors (reference point 1 to figure out if that’s worth it)
Access to investors/connections which they swear they have but rarely do,
The chance that you may be featured in a print media outlet [that no ones reads]
Access to shared coffee (or, in a very real scenario I encountered, access to a shared coffee pot but you have to bring your own coffee)
And your logo is shown in their marketing content (ultimately used to pull in more bozos who didn’t read this article)
Amazing is certainly a word.
Be sure to not sign anything when you first go and tour the space and talk to the program managers. It is very easy to get caught up in the moment (especially if it’s your first time doing this) and it is in your best interest to go home honestly review the benefits offered at the established cost.
If the benefits of the incubator are questionable at best (likely resembling the points above), then you should really be looking at the offering as an office space rental agreement.
Examining the reality of the office space is also important. Co-working space is a cool idea and I won’t argue that it can generate a certain “energy” that is hard to find on your couch.
Do you know what is also hard to find on your couch?
That asshole who talks on Bluetooth so loud you are convinced he must have developed some sort of voice amplifying software. Also, that other guy who insists on sitting your right next to you despite the thousand open tables around you. Or that other, other guy who reserves 1 of the 2 shared conference rooms every minute of every day, as he apparently operates under the belief that that room, in fact, is his private office.
I personally am of the opinion that you can get infinitely more work done from the comfort of your home than at a crowded co-working space where you get 1/3 of an oddly shaped table. That being said, if you cannot avoid the million distractions evident around your home than 1) this may be a sign that you don’t even love your own company and 2) you may need to pay up otherwise zero work will ever get done, other than binging Netflix.
Think it through and pass if it doesn’t make sense.
3) The “educational program” component is a series of sales pitches
This one is a bit trickier to figure out from the get-go than the other two but can be equally as painful/brutal/incredible waste of time.
Let me explain.
Most programs hold weekly “classes” for founders to teach them various aspects of starting a new company. In premise, great idea.
There is a lot that we (all of us) don’t know and, most importantly, by not knowing will end up costing us money. The “trial by fire” that comes with starting a company is unavoidable for the most part, but any pieces of advice early on in areas you may be weak in such as legal, marketing, and HR can be of incredible benefit.
So these programs, theoretically, slap together the best knowledge from the best experts who have all been in our shoes and now are passing along great wisdom. The keyword here is theoretically.
What really happens, and what you need to avoid, is that these programs bring in “experts” from various local firms that then slap together a 40-slide PowerPoint and then attempt to sell you on their services for 2 hours. It’s fucking brutal to sit through.
Classic industries that do this are legal, accounting, and hiring agencies. The give away is that the class is called something that would only take one word to answer/teach, “How to protect yourself from a lawsuit” [lawyer] or “How to hire great employees” [agency]. I know this may sound harsh and it took me a few of these to get the nerve to start doing it, but if you joined an incubator, are at your first class, and feel that this is about to happen, get up and walk out.
This may look and feel rude. But I promise you will never regret the 2 extra hours of your life you have back because you toughened up and stop worrying about this asshole’s feelings.
I am currently 2 for 3 on this occurrence (the 1 outlier incubator didn’t even offer classes, so possibly even worse?) so trust me, this happens.
Although this may be difficult to decipher early on, you may simply want to ask the program manager a bit about the classes (who teaches them, are they former founders, are they going to try to sell me something for 2 hours or until I leap out of the window, you know, the basics).
If they hesitate to respond, skip that incubator.
Hope this helps you avoid a very unneeded headache.