Pros and Cons of joining a start-up incubator
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Pros and Cons of joining a start-up incubator
1–9 of 9 posts
Re: Pros and Cons of joining a start-up incubator
#2"If you plan on signing up for an incubator try to get an idea of how much time there is allocated by the various partners in the incubator for this mentoring and maybe talk to some alumni to see how well that worked out in practice."
This is actually something I have been wondering about. Can anyone give feedback in regard to this? pre-emptive thanks
Re: Pros and Cons of joining a start-up incubator
#3"Incubators tend to focus on the ‘low hanging fruits’, the companies that are either very easy to make profitable or very easy to ‘flip’ to a larger party in a tech acquisition or a team acquisition. Various incubator operators are on the record stating that they are ‘in for the long haul’ but the statistics do not bear this out and incubators tend to stay away from companies that really intend to ‘change the world’."
I have no idea if this is true of the others, but for the record, it is certainly not true of us. It's one of our guiding principles that the ideas with the biggest potential usually seem borderline crazy, and we consciously seek them out.
Re: Pros and Cons of joining a start-up incubator
#4"The 'change the world' companies are typically not launched from incubators, though there is no reason why that should continue to be the case."
I wonder if this is simply because incubators of the YC variety are still such a new idea that we really don't know yet whether they'll produce a Google or Facebook yet. I doubt there's a deliberate focus on safe bets going on, since it seems to me it's in their best interest to take more risks if they're investing such a small amount at such an early stage.
Re: Pros and Cons of joining a start-up incubator
#5"The 'change the world' companies are typically not launched from incubators, though there is no reason why that should continue to be the case." I wonder if this is simply because incubators of the YC variety are still such a new idea that we really don't know yet whether they'll produce a Google or Facebook yet. I doubt there's a deliberate focus on safe bets going on, since it seems to me it's in their best intere…
Yes, that's exactly right. The way we invest (a large number of small bets) means that it makes less sense for us to be conservative than it does for any other investor. So either JM is writing about other "incubators" or he's been misled by the fact that it takes a while for the world-changing companies to emerge as such. At year 2, Microsoft or Google or Facebook would not have seemed world-changing.
Re: Pros and Cons of joining a start-up incubator
#6Having actually worked in an incubated start-up, I can say this article is overstating both the pros and cons of working in one.
Re: Pros and Cons of joining a start-up incubator
#7Does the author have any direct experience in an incubator, and if so which one(s)? Might be better written from an insider perspective.
Re: Pros and Cons of joining a start-up incubator
#8"If you plan on signing up for an incubator try to get an idea of how much time there is allocated by the various partners in the incubator for this mentoring and maybe talk to some alumni to see how well that worked out in practice." This is actually something I have been wondering about. Can anyone give feedback in regard to this? pre-emptive thanks
I can't help myself, I'm always extremely skeptical when incubators and YC-like startup programmes have long lists of mentors and/or when the mentors have no actual skin in the game. What are their motivations for mentoring, exactly, if they hold no equity? They usually hold a full time job elsewhere and do the mentoring on the side. Even if the motivations are purely selfless (yeah, right) I question the utility of the advice they give under the circumstances. Very few seem to have their ear quite so close to the startup ground as YC.
That said, talking to founders of portfolio companies seems to be an established (and sane) part of due diligence before accepting any kind of investment. I'd say you should apply it to seed/incubator stage as well. (after all, you're usually giving away equity at a fairly low valuation on paper - you can't measure advice, so you can hardly make the transfer of equity contingent on its quality)
Re: Pros and Cons of joining a start-up incubator
#9"If you plan on signing up for an incubator try to get an idea of how much time there is allocated by the various partners in the incubator for this mentoring and maybe talk to some alumni to see how well that worked out in practice." This is actually something I have been wondering about. Can anyone give feedback in regard to this? pre-emptive thanks
Let me put it to you this way - I haven't even done an incubator yet and I've already received tons of (very generous) help from YC alum. This network is tops and it already motivates me to give back.