Incubation


1. What is a Technology Business Incubator?

A Technology Business Incubator (TBI) is a place and network that provides support for a technology start-up business, usually started by young promoters, college students or fresh graduates.

In our context, the word Incubator is defined as a place, especially with support staff and equipment, made available at low rent to new small business.

Good incubated TBI companies should apply a new technology with an innovative business model.

The Ventures normally promoted in a TBI have the following characteristics:

The foundational business idea is based on a specific technology or a direct application of that technology.

The venture must develop a specific technology or convert an idea into usable technology

It uses new and unproven technologies

The venture has a relatively high risk

The venture should not be using a proven business model with established technology, high customer availability and financially viable. That is not to say that a TBI start-up may not enter into a traditional industry. If the business leverages technology with a completely new approach, it would be a good candidate for a TBI.

2. Types of Business Incubators

There are several types of TBIs. Although all of them offer start-up assistance to ventures, they vary in scope and approach. Generally, Startup ventures need assistance in the following areas:

SNo. Types of Assistance or Facilities Examples
1 Information and Knowledge Books and Information Bulletins, Subscription to Magazines, Frequent Interaction with experts
2 Training and Orientation Courses on Entrepreneurship, Product Development, Pitching for Venture Capital, Development of a Business Plan, Valuation and Recruitment and Management of People.
3 Mentors and Coaches Experts who can guide and mentor Founders
4 Legal Assistance Creating an initial Partner Agreement, Statutory Compliance, etc.,
5 Technology Development Assistance Equipment, Machinery, Lab, Computing Facility, Assistance from Professors and Research Scholars
6 Financial Assistance Angel Funding, Grants, Subsidy services
7 Marketing Assistance Connections to potential customers

A comprehensive TBI will offer all these services. TBIs are economical because they can share many of the common facilities among all the members. Universities are a very good platform for setting up a TBI because they can provide most of these services just by leveraging many of their existing facilities, without much additional investment or effort compared to a commercially created TBI. Most importantly, young, talented people with great ideas are available on University campuses, as well as Professors and Research Scholars.

A simple TBI can start with offering only information and mentor assistance along with some basic training to potential entrepreneurs. They may continue to add more services as they grow.

3. Stages of Creating a TBI

Here are some typical steps in starting a TBI at a University.

  • 1. Making the decision to start a TBI
  • Thrust Area identification
  • 3. Identifying champions (a full-time head and sponsors)
  • 4. Identifying funding sources
  • 5. Applying for outside funding and following up (completion time can vary greatly)
  • 6. Finding an internal location or planning for a new building
  • 7. Acquiring specific special equipment and machinery to suit your thrust area
  • 8. Designing layout of the incubation facility
  • 9. Installing the equipment and machinery
  • 10. Creating venture evaluation and incubation policies
  • 11. Creating venture service list and tariff
  • 12. Forming a Governing Board
  • 13. Commencing operations
  • 14. Marketing and promotion of incubation services

 

4. Identifying Thrust Areas

Successful incubators, like successful businesses, identify their focus or thrust area and specialize in specific fields. A thrust area may be a specific technology or business areas. Examples of TBI thrust areas are domains like mobile, healthcare, renewable energy, telecommunication, Internet of Things or biotechnology.

5. Starting Up and Planning

After identifying the thrust area, a university should create a plan for creating the TBI and making it attractive for potential entrepreneurs and the investor community. A well-conceived TBI will have the following:

  • 1. Common use facilities such as office equipment, meeting rooms, a front office and high quality internet / telecom access
  • 2. Suitable work space for the startup team
  • 3. Key facilities based on the thrust area
  • 4. A network of advisers like auditors, legal officers and experienced entrepreneurs who can mentor the startup
  • 5. Support staff
  • 6. Libraries and other knowledge resources

 

A university can estimate the space needed for the TBI based on the scale and number of ventures. A typical startup venture may require anywhere from 3-7 seats for its team. Here is an illustrative example:

  • a) Number of Ventures at full capacity: 7
  • b) Average team size of venture: 5
  • c) A 2000 sq.ft Common area for reception, one or two small meeting rooms, a larger board room, and space for the TBI management team
  • d) Seating for 35 people will require about 100 sq.ft. per person, or about 3500 sq.ft.
  • e) Pantry area and rest rooms (might be shared with existing facilities based on the proximity)
  • f) Space for special facilities depending on the thrust area
  • g) Workshop area if the thrust area includes hardware product /fabrication based projects.