Over the last few years, we’ve seen the rise of the tech hub. These are spaces that new businesses can rent in order to tinker with their new products and get prototypes built quickly. In the past, the majority of tech hubs were focused in university campuses. But over the last few years or so, thanks to the rise of the sharing economy, we’ve seen businesses offer these services too.
So what does it take to turn your business into a tech hub?
Offer Mentorship As Well As Capital
The primary focus of tech incubators at the moment is understandably on providing their members with the capital, ducting systems, and tools that they need to create their first prototypes and designs. But the problem is that the vast majority of startups who come to your hub will be very inexperienced. Most won’t know for sure whether their product will sell, and even if they do, they probably won’t go about selling it in the right way.
We’ve seen plenty of startups fail because their incubators didn’t provide them with the mentoring support that they needed. Take Goko for instance. Its launch was well publicized, but only two days into the selling cycle the company had already run into problems with their product. It turned out that they were having serious issues with the backend of their product and they weren’t able to scale alongside user demand. It was this inexperience that led the company to eventually fail.
If Goko had been in a tech incubator that had offered support beyond technical expertise, things might not have worked out so bad. The company experienced a PR disaster at launch, and it was all because of its relative inexperience in handling angry customers.
Develop A Funding Path After Incubation
During the incubation stage, or even during a demo event, companies can expect to generate a lot of interest among investors. But after this initial excitement phase wears off, it can be hard to produce sustained interest in what the business is doing. Too many firms that have been through the incubation process wind up having to sell off parts of their business to stay afloat, simply because they didn’t develop a long-term funding strategy.
If you want to attract the best talent to your business and be a hub in your community, then you need to help the businesses that come to you attract funding. Often they won’t be professional fundraisers themselves, so to garner an excellent reputation, part of your work should be to approach venture capitalists and other people in your contact network and ask them if they’d be willing to invest in the companies you’re currently hosting.
It’s also a good idea, to be honest early on in the incubation process with companies that are unlikely to make it. The performance of an incubator is defined by the successes that it generates, so you don’t want yours to be tarnished by companies who promised a lot and delivered very little.
Finally, try to do some business development on behalf of those businesses that you host in return for some of the royalties. Startups don’t usually know much about gathering partners, but as an experienced business owner, you do.