During the past year or so, I have studied the role of incubators and accelerators in startup business development. The concept of these startup assistors, which are springing up throughout the U.S. and the rest of the world, is fairly simple: provide new organizations with assistance to grow their products and plans. With respect to incubators, this can simply mean providing inexpensive workspace and perhaps some mentorship. For accelerators, this usually means a hectic environment in which a program is enacted to push new businesses rapidly into viability.
As technology became more accessible during the turn of the 21st century, smaller tech businesses began popping up throughout the U.S. In a comparable vein, accelerators like TechStars began forming at entrepreneurial hubs. Boulder, Colorado, is one such hub, and the original TechStars office hosts tens of new companies there every year. Right here in Fargo, NDSU is home to a technology incubator, and Lake Asgassiz Development Group maintains a general business incubator as well.
Similar concepts for other types of startups are transpiring on the other side of the world in Bangalore, India. This mammoth urban environment is now home to many multinational corporations, including brand names like Microsoft and Target Corporation. Seeing the potential benefits of startup mentorship, the former created its own accelerator on its Bangalore campus in 2012. Attempting to capitalize on the community’s entrepreneurial spirit, the latter will be developing its own incubator in the upcoming year.
These startup assistors play an integral role in the development of new businesses, and many now-famous organizations are spawns of these entities (think of the Scribds and, yes, even the Reddits of our interconnected world). Putting aside the fact that studies have shown 84 percent of incubator graduates – pure startups – remain in the incubator’s community for ten years or more, startup assistors have positive effects on the communities within which they reside. The following are descriptions of the top three benefits I believe startup assistors pose for budding entrepreneurial communities.
1. Mapping the Entrepreneurial Scene
Startup assistors often act as connectors for new businesses and investors. Graduates of startup assistor programs are usually scrutinized by investors for their future cash flow viabilities. This creates obvious benefits for startups – what startup doesn’t want to be sought after by deep-pocketed partners? – but this process is actually part of a management system for entrepreneurial communities. Startup assistors effectively map the players of entrepreneurship, from funders to the actual entrepreneurs in the area, in order to serve as the premiere connector for new companies. Having this management system in a community allows for more productive interactions between investors and startups.
2. No Press is Bad Press
As startups continue to play a public role in American life, the publicity for communities acting as homes for startup assistors will continue to receive external dividends. Many prominent media outlets, including Inc. Magazine, Forbes, and UBI Index publish the establishment of innovative startup assistors. This publicity in turn makes the community more visible on a national scale, which can either add to its entrepreneurial prestige or, at the very least, turn the heads of individuals interested in creating new businesses. Both of these possible outcomes add to the entrepreneurship vibe constructed by a community.
3. Participation for All
One of the more recent implementations in this sphere has been the designing of startup assistors in conjunction with colleges and universities. Administration of these incubators and accelerators can utilize an inexpensive and energetic workforce – students – for the startups they house. This extra labor is beneficial for the startups, which oftentimes have few funds, and it provides students with legitimate applied experience in tandem with standard textbook education.
As a continuously developing city, Fargo has the opportunity to expand its startup mindset into this realm. As noted, the city already has an incubator and an accelerator, but more can be done in this sector to fully exploit its benefits. Members of this community should encourage its entrepreneurial leaders to continue a formalized mapping of startup players, willing students from any one of the nearby colleges should be easily partnered with new businesses, and the incubators should be molded into unique, innovative entities to encourage positive recognition. Following these admittedly vague steps, the city of Fargo may be able to continue its current trend in a diversified manner, with a broader base of potential contributors.
Startup assistors have proven to be excellent growers of new businesses over the past decade, but it is important to note the potential they have for benefiting communities as well. For communities attempting to maintain an air of entrepreneurship, startup assistors of some kind are a crucial consideration. As the community grows, management of entrepreneurial players becomes even more difficult and necessary. And as new businesses become more established in the area, the community must still foster a welcoming startup environment. Startup assistors, if maintained properly, can successfully navigate startup communities and promote the correct collective mindset as the region matures into a true entrepreneurial hub.
