The image of the strong, silent, go-it-alone entrepreneurial hero is rampant in the media right now. But don’t believe it. Almost every budding entrepreneur needs a wide variety of help to get a company properly launched and set on a path toward growth and profits.
The smart question isn’t “Should I get help?” It’s “Where’s the best place to get the help I need?” Three potential answers immediately come to mind: incubators, accelerators, and co-working spaces.
“If you’re starting a small business, the choice of whether to hook up with an incubator, an accelerator, or just a co-working space would depend upon the resources that you need, the time to market of your product/service, and the experience you have in business and startups,” says Alan Lish, a clinical assistant professor at the University of Houston who works to commercialize the school’s technological advances and also consults with outside inventors.
Wondering which support system may best suit your small business? Here’s a primer on each one to help you decide.
An incubator is an entrepreneurial support system designed to help small businesses get on their feet and become self-sufficient. To that end, it tries to weed out entrepreneurs who for some reason — their idea is lame, they resist coaching, etc. — are not ready for prime time.
Entrepreneurs accepted into an incubator gain ready access to important resources, including an entrepreneurial milieu, a wide range of support services, instruction in business skills and know-how, time to solve problems, and opportunities to present themselves to potential investors.
Every incubator has strengths and weaknesses, so it’s important that you qualify the incubator as much the incubator will seek to qualify you and your business idea.
If an incubator is all about nurturing a young business toward self-sufficiency, an accelerator is more about putting a new business through an intensive training camp to prime it for rapid growth.
Accelerators accept entrepreneurs with potential and force-feed them specific information, exercises, and requirements on a relatively fixed schedule. If you’re not ready for the next phase when they think you should be, you may be dropped from the program.
After “graduation” from an accelerator program, you may be given some seed funding in return for a chunk of equity — and sent out the door to pretty much sink or swim as best you can. Some accelerators have seen their fledgling new businesses produce remarkable results. Others have not.
Co-working spaces are far less interested than incubators or accelerators in nurturing your entrepreneurial spirit and skills. They’re more like roommate or sub-lease situations.
rented premises basically evolved from business centers that successfully found individuals to lease single offices within a whole floor of an office building, where everyone shared access to conference rooms, secretarial support, office equipment, telephone systems — and, in the case of lawyers, law libraries.
Co-working spaces gained tremendous popularity when programmers and other technology-intensive professionals found they could be more productive (and less lonely) banging on keyboards in the same rooms with others of their kind. The trend was strengthened when writers, artists, and hobbyists began taking space in co-working centers as an alternative to laboring solo at home.
You may get lucky and find talented people to team up with at your neighborhood co-working space, but don’t count on it. You’re more likely to find a cost-effective support center for your company’s physical, practical needs than a brain trust for the thinking and planning required to give your business viable form.