New, small businesses sharing desk space and supplies, mentoring, and educational opportunities and programs, are thought to have notably contributed to the United States’ recent economic rebound. Business Incubators and the facilities and programs designed to assist these early stage companies, are thought to be a big part of it.
By lightning everyday business costs and resource burdens, incubators are yielding high economic return. NYU’s School of Engineering incubator program, for example, is said to have generated $251.2 million (projected to be $719.8 million in 2015)in direct and indirect job creation, taxes and spending, in just five years alone.
Those organizations who regularly perform well, like Y-Combinator, have seen over 300 of their startups (with names like Scribd, WePay, and Reddit) receive funding and achieve success. These success-focused, shared-knowledge arrangements are making launching a business easier for entrepreneurs, and providing opportunities for those who might otherwise never have had them.
In fact, a 2010 study by National Business Incubation Assn. (NBIA), found the survival rate for incubated companies, after five years, is 87 percent, compared with 44 percent for companies that didn’t launch from incubators. “Working alongside people who are also trying to build a business can be a huge advantage to incubator tenants,” according to Investopedia. “This gives them a group of peers who understand the challenges and can share good and bad. In the incubator environment, opportunities exist for beneficial exchanges of ideas and concepts.”
Here’s five creative ways they’re succeeding.
1. Marketing Software
Most entrepreneurs are masters at developing products, but lack the sales and marketing resources needed to win customers and generate revenue. Because of this deficit in sales and marketing, 8 out of 10 entrepreneurs fail within their first year. It is important to adopt creative marketing strategies to succeed in an ever competitive market arena.
With the Hatchbuck Incubator Program, businesses receive a proprietary sales and marketing software suite, designed to help them quickly launch. More importantly, companies receive a Hatchbuck Marketing Consultant who works with them one-on-one to help them create and implement a sales and marketing strategy. And this is what startups need to get up and running to begin with.
The user-simplified CRM-marketing automation product, built to be high in function and low in subscription cost, was designed for SMBs and SMEs anyway. Think a lighter version of HubSpot, at a fraction of the cost.
So instead of evaluating, integrating, and ramping up on a variety of database, email marketing, and form building systems, Hatchbuck gets business pioneers quickly up and running on the software, while also helping them navigate sales and marketing. “We know how difficult it can be for small businesses with limited time and limited resources to put modern sales and marketing strategies into place. Our mission is to give small businesses everything they need to scale and grow,” explains Don Breckenridge, Hatchbuck Co-Founder and CEO.
2. Free CEO
Hybrid venture fund/incubator, WayFounder, believes good ideas come from everywhere. But so often, they never go beyond concept or fantasy. WayFounder solves that by providing a platform and resources for ideas that have the potential to become legitimate businesses, despite a concept-holder’s lack of time or experience.
The organization sources ideas for consumer solutions from “nontrepreneur,” or entrepreneurs that have great ideas, but no time to execute them. These may only begin as one-off product ideas, but have the potential to evolve into a full-fledged business. WayFounder commits a minimum of $50,000 to bring that product to market, and the idea conceiver receives a 5 percent royalty on all product sales.
But here’s the kicker, if it turns out to be a wildly successful product with the potential for an entire product line, WayFounder will invest another $250,000 to hire an experienced CEO to grow it. The nontrepreneur then receives 5 percent founder equity in the newly formed company.
3. All-in-One Customer Service
In San Francisco’s East Bay, hot, new startup co-working space TopLine is offering its incubated small businesses a competitive leg-up in the form of customer service solutions. Through the program, TopLine resident companies get access to ServicePattern, Bright Pattern’s next generation cloud contact center solution.
Because customer experience is the lifeblood to a successful startup, the cloud-based product suite gets TopLine startups a direct line to clients. Much in the same way famed instant messaging app for smartphone users, WhatsApp, offers an alternative way for people to communicate, who already had ability to call and text each other, Bright Pattern identifies customers and their intentions in advance, enabling faster lead capture and customer service cycles.
The Bright Pattern app provides a Rich Contact that allows customers to quickly switch from call to text, from text to email, or even have a video call. In early stages, accommodating to your client base on their terms, provides a firm advantage for businesses who quickly need to impress new users. “We all communicate with each other using up to seven different channels a day, and new companies that allow customers to communicate with them the same way, are the ones retaining customers and making them happy,” explains Konstantin Kishinsky, CEO of Bright Pattern.
4. 3D Printing (and other cool gadgets)
In Austin, Texas, incubator, Capital Factory, gives startups a competitive advantage attracting talent by hosting well-attended tech meetups and hack-a-thons. But it’s the organization’s Device Lab, replete with a 3D printer, that uniquely helps startups test and build concepts with physical, not virtual tools. The lab provides access to a small army of tablets, phones, and other devices for use in QA, R&D, prototyping, and customer support.
Capital Factory’s large format Gigabot 3D Printer from re:3d is available for use by members at just the cost of printing materials. Texans help each other out, and Austin-based re:3d is committed to inspiring local, new ideas through 3D printing. For every 100 Gigabot Printers delivered, in fact, the company donates one to an organization dedicated community improvement.
5. Really Exceptional Mentoring
Because of their pedigree, top programs like Y Combinator are able to attract accomplished investors and entrepreneurs like Peter Theil, Andrew Mason, andMark Zuckerberg to volunteer their time each year to come meet with the startup entrepreneurs in the program.
And we’re talking mentoring spanning from high-level, down to crafting the perfect sales pitch. After all, as Forbes writer Natalie Burg points out, how an entrepreneur approaches their incubator experience can “speak volumes about how they’ll handle the adventure of business ownership.”