How To Get The Most Value Out Of A Startup Incubator
I just came back from an intensive 5 week accelerator in Kampala with the Unreasonable Institute East Africa. The whole experience got me thinking about the role accelerators and incubators have served in the life of our startup and I thought I would share these musings.
Since incubators and accelerators happen at different stages and present different values, I am going to do a 2 part series on this — One reflecting on incubators, one reflecting on accelerator programs.
For our incubators, we participated in the eLab with Princeton, and the Nailab in Kenya. Here are my thoughts on what you should ask yourself when deciding if you should participate in a program or not, and if so, what value you should make sure to extract.
Princeton eLab — (2012) — Idea Stage
The Princeton eLab in an incubator program established by the Keller Center at Princeton in 2012, the same year we launched DUMA. The program was structured as a 2 months long intensive summer experience in jumpstart our company. They gave us seed capital ($4,000 per person, equity-free), a space with internet and air conditioning to work in, as well as connections to mentors and networking opportunities.
- Overview — Participating in the first year of any program is difficult because you are a guinea pig of sorts. There will be several challenges to iron out and while that is a necessity for the incubator program, it causes some difficulties on the “client” side. We’re all startup people, I think it’s fair to say that we “get” this challenge pretty strongly. Shout out to all our early stage clients for their patience with us!
- Mentor Network — In an idea stage company, getting ideal mentors is somewhat of a challenge because the type of people you will have the most productive conversations with will be the “brainstorming” type. The question then arises — if this person isn’t a “brainstorming” type, but you know they will be an amazing mentor for you later on, once you have solidified your product/service, when you’re raising money, when you’re building your board etc., how do you keep in touch with them? How can you make sure you are spending their time wisely and respectfully? What we did was put all these mentors on a newsletter list, and emailed them once a month. For the people who could become our immediate friends and champions, we made sure to ping them occasionally. Ultimately, this worked, and the mentor network from the eLab was incredible. Plus, we did make some solid friends who we still see whenever we can.
- Feedback/Insight — We had a challenge with the “fit” of the program to a certain degree, because we were building a product/service for the Kenyan market, but we were working out of Princeton NJ. Making sure the program is a good fit for your company is super important, and perhaps we should have just gone to Kenya sooner. That being said, we really needed to build our product and hone the business model. Overall, the feedback and insight we got from our mentors was valid — we talked about things like how we would engage our market to get feedback, what type of business models are more complicated and expensive that others eg. B2B vs. B2C. So yes, certain things were more difficult to discuss than others, but having a sounding board for our model and creating the skeleton for the company was very helpful.
Summary — The most important thing at an idea stage of a company is to get feedback and iterate. It would have been more helpful for us to have our market at our fingertips to test with, but the feedback and mentor network were incredibly helpful to us. All our mentors became our sounding boards and evangelists and kept our momentum high.
Nailab — (2012–2013) — Seed Stage
The Nailab is an incubator program in Nairobi that provides a working space with other startups, as well as mentor support, PR support, and networking support. They have also ventured into providing capital to their startups, however that program wasn’t fully functional while we were participants in the program.
- Overview — Again, participating in the first year of a program is the most challenging. The Nailab was also 0 years old when we joined. We were also running an office out of Nakuru at the time, and commuting to the Nailab in Nairobi. It was really challenging for us to be involved in all the programming.
- Fit — Going into the Nailab, our expectations were that we would get a foundational network in Kenya. Network was our #1 priority since we had already met lawyers, accountants, product strategy advisors, etc. through the Princeton eLab. Our challenge was coming out of one incubator and going to another. Our startup therefore was not quite in the early idea phase, and we were not starting from ground zero. The other startups in our program, however, were. Because of this, we found we were able to add a lot of value (I hope), but gain less initially.
- Alumni Network — That being said, we have been able to grow alongside the Nailab. As their structures became formalized, we were able to benefit from this and gain additional value. For example, the PR department grew at the Nailab, and we have been able to get multiple opportunities from this. The Nailab has also cultivated a larger name and network for themselves over time that we have been able to benefit from. I think this has been one of the biggest values from this program.
- Community — There are still members of the Nailab startup cohort that we are in direct communication with. In fact, we just hired our UX Designer from that community. Some of the startups in the Nailab that were at an early stage are now in a position where we can add value to each other. We also alert each other about opportunities that arise, such as funding and competitions.
Summary: Once an incubator program is over, it’s really just the beginning. Focus on programs that have strong alumni networks and will prioritize your growth down the line. Make sure other entrepreneurs in the program are in a similar stage as you, company-wise. Be humble and helpful to others, and it will come back to you. Use the community as a platform for your growth.
IN SHORT
Overall, our experience with incubators was positive. Even if we weren’t able to optimize value out of the program initially, we were able to benefit from the spill-over effects.
Most importantly, we got useful feedback on our startup and the momentum we needed to keep going.
At the end of the day, incubators are facilitators. They are not necessarily experts in your field, nor are they 100% familiar with your internal processes. Go into an incubator with some milestones for what you will get out of it.
There are a few theories about how to be selective with the programs you engage with. The truth is that at the beginning, you are probably unsure about everything. This article is written with a load of hindsight. The best thing to do is engage in every opportunity to brainstorm, meet new people, and gain momentum with your idea, but also make sure you are giving yourself enough time in between these events/competitions/pitches to actually get your head down and work. (I actually wrote a post about the awesomeness of pitch competitions here if you want to check it out :))
Cool! Those are my thoughts on incubators based on our experience. Please share your thoughts and questions in the comment section or by contacting me at arielle@dumaworks.com! And stay tuned for the follow up on accelerator programs next week.
