Did you know the first business incubator opened in the U.S. in 1959? Now flash forward to today and there are more than 7,000 incubators worldwide (including Paul Graham’s Y Combinator). For decades, they have been helping startups with everything from technology training, crafting pitches, gaining knowledge from advisors, networking, office space and obtaining seed money.
It’s also been found that “the survival rate of incubated firms can be more than three times higher than non-incubated firms.”
But what happens after you’ve made it through your incubator? Remember, 90 percent of startups will fail, so here are nine things to help you reduce those odds and grow your business.
1. Choose wisely
Let’s start at the very beginning to make sure you chose your incubator wisely. Entrepreneur recommends you ask the following questions when selecting, or deciding if you need, an incubator:
- What can you do and what should others handle?
- Do you need the help of a specialist?
- Are their current startups on your wavelength?
- How much are you willing to spend?
- What else are you looking for?
2. Be sure your business can disrupt, substitute or complement
Kendall Wouters, CEO of Reach Ventures in Cleveland, says “most incubators are cultivating a garden of startups that are dead on arrival.” That’s because incubators are sold on a “gut feeling” instead of understanding whether the business is actually sustainable.
“If you’re going into a market and you don’t have a fundamental way to disrupt, substitute or complement existing innovation enough for the customer’s behavior to change, you are wasting time,” Wouters says.
3. Get your name out there
The most effective way in getting your name out there is through content marketing. Whether it’s frequent blog posts, videos, graphs or eBooks, generating quality content can help your startup gain traction by generating a little buzz — even if you aren’t currently selling a product.
4. Keep it lean
Just because you’ve graduated from an accelerator, doesn’t mean you can act like a big company. Bubba Page, founder of Outro, a referral automation platform for B2B companies, went through Techstars Boulder accelerator in 2014. He says:
In an accelerator, you are going to learn how to work faster and more efficiently than you have ever worked before. Remember, that staying lean in your software development, marketing, travel and everywhere you can, will give you more runway to prove out your idea.
Take advantage of the perks that come with accelerators, some provide free credits for web hosting or web services, legal help and tons of software ‘starter’ packages from top brands from around the world. These perks help you to keep your costs to a minimum, while you are finding product market fit both during and after the program. Don’t scale pre-maturely, or you will burn through the cash you have too quickly and not have enough time to reach breakeven or your next funding milestone.
5. Network, network, network
Despite all the connections that you can make through social media or blogging, nothing beats getting out of the office and networking in person.
Think about the people you want to meet and where you can meet them. Will they be at an upcoming industry event? Can you schedule a business lunch with them? You will want to offer them something of value, such as advice on improving their business or an interesting article that they might find informative.
In my experience, this is much more effective than just handing out business cards. Are you an introvert? If so, here are a few networking tips that may be helpful.
6. Focus on customer acquisition, not just financing
Sramana Mitra says in the Harvard Business Review, “Most incubators use funding as a success metric, which is a somewhat flawed criterion. Over 99 percent of companies should operate as organically grown, self-sustaining businesses — bootstrapped, without external financing.” Mitra adds, “For them the goal is to achieve customer validation, not financing. Yet if the incubator uses financing as its success metric, it will try to force inexperienced entrepreneurs into an unnecessary financing round. And more often than not, they will fail.”
Instead, keep acquiring customers through content marketing, networking and most importantly, talk to your potential customers whenever you have a chance. Find out how you can help them by discussing their wants, needs, pain points, fears, objections and goals.
7. Find mentors
There’s a chance that after you made it through the incubator that you no longer have a mentor. But, as George Deeb says in Forbes, “Mentors or business coaches are one of the most valuable resources an entrepreneur should tap into.”
Deeb further suggests to “search for the mentors who are experts on your specific business size, your specific industry or your specific business problem (e.g., marketing issue vs. technology issue) on a case-by-case basis.”
8. Secure funding after the ‘program’
Peter Relan explains this perfectly on TechCrunch: “During the incubator program or at demo day, startups can expect a flood of funding. However after this initial phase, I see too many companies struggle with continuing the flow of funds.”
Fortunately, there are still ways for you to secure funding for you startups. Examples include:
Getting a loan from a bank or credit-card line of card.
Trading equity or services for help.
Finding customers or partners who will purchase your product or service in advance.
Launching a crowdfunding campaign.
Seeking a business grant.
Borrowing money from friends or family.
Bootstrapping your startup on your own.
9. Have the right tools and resources
Just because you no longer have the tools or resources that were offered at your incubator program doesn’t mean you don’t have access to additional tools or resources. In fact, there are hundreds, if not thousands, of tools and resources ranging from analytics to wireframing and mockups that are at your fingertips.
A great starting point would be this From A to Z: 200 Essential Resources for Entrepreneurs Building Business.
Here’s to growing your business!
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