Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Incubators are a Ghetto

stochasticresonance.wordpress.com

Post reply on HN
Print view View original

21–30 of 40 posts

Re: Incubators are a Ghetto

#21

Post by j45 »

crcsmnky wrote: post #9

Funding doesn't equal success, it's simply a longer runway to failure. That said, what would be more telling is data about how many companies last and are able to build something compelling or sustain any kind of growth, compared to how much money they raised (if any). Just because a program doesn't have successful entrepreneurs running it doesn't mean they're companies are doomed to fail. It all comes down to pickin…

>Funding doesn't equal success, it's simply a longer runway to failure.

In those cases (too many), funding is also a distraction and putting off todays problems (profit for sustainability) until the future.

VC funding has often struck me as a wonderful way for those who have been successful (many vc's are entrepreneurs) to give others a chance, and from a financial standpoint, likely a reasonable way to have some tax write-offs while doing good in the world to help give something a chance.

In that way, I like funding. At the same time, funding is about founders more than the idea.

Re: Incubators are a Ghetto

#22

Post by littleidea »

nirvana wrote: post #16

There is an emphasis on hacker news and in the startup scene on VC funding. But I think this is a mistake. The mission of a startup is not to get VC funding. The mission of a startup is to get product-market fit. Angel funding or some other solution is necessary to sustain you until you get that product-market fit. But until you do, I think you're going be in a worse position for getting VC funding. You might not be…

Sounds like a great opportunity. Rock out.

If the incubator is specifically trying to develop lifestyle business in Chile, win and win.

With the possible reservation that if you truly get to product-market fit and it's a lifestyle business, then maybe you should consider a bigger market, as it is almost always as much work to solve a small problem as it would be to solve a bigger one.

Good luck, and I'd love to hear your story as you make progress

Re: Incubators are a Ghetto

#23

Post by littleidea »

j45 wrote: post #20

Chasing funding can be a major distraction from finding a product-market fit. Good advisors, be it in an incubator or a mentor, help you make sure you can make money with your business before adding money to make it grow. There are lots of problems out there to solve and for those looking for their first hit it's quite reasonable to find one that can provide enough value early on that customers will pay for it. OTOH…

That is sort of the point, chasing funding can be a huge distraction. If an incubator can't provide significant advantages to doing so, what are they helping with? In some circumstances, maybe something else significant.

I disagree with your second point. There are many opportunities that will not be profitable initially. Google, Amazon, Facebook, Twitter, these are the easy examples to point out, but there is a spectrum. A good advisor will understand the landscape and consider your options and leverage.

I agree there are a lot of problems. Every inefficiency is an opportunity. Insurmountable Opportunity...

I'm pro-profit and pro using every appropriate tool. I'm also pro thinking big and long term.

Re: Incubators are a Ghetto

#24

Post by yesimahuman »

One thing I've heard about other incubators is that they demand a large amount of your attention, in a way that is more like working for them rather than as your own boss. This is interesting because it would seem to challenge the entrepreneurs' drive for independence, which could be harmful to their success. Contrast this with YC which gives you more independence and simply offers "office hours" and weekly meals, where it's up to you to make the most of them.

Has anyone else experienced this?

Re: Incubators are a Ghetto

#25

Post by peregrine »

I have an experience with one of those "Bad Incubators" the analysis is spot on.

- We all met weekly for presentations, half the advisors knew what was going on the other half did not. Right before demo day the other half of the advisors were shocked that we had pivoted and planned on selling our OLD idea. Those same people then pitched our OLD idea to the few investors as a possible pivot, which was a huge WTF.

- They brought more politicians then investors to the demo day presentation.

- The investors they did bring focused on healthcare companies and companies further along(profitable, paying customers, large user bases etc)

- The entire operation was paid for by a single guy, who subsequently was the only investor in most of the companies in their "Accelerator" round.

- Most of the companies accepted had non-technical founders/co-founders. Most of the companies could not even launch a product, yet alone MPV, in 3 months because of this, and some had trouble launching a product after 1 year.

Overall we turned down money from their "Accelerator" which ended up being a great decision. If you are going to use an incubator make sure to heed the advice this article gives.

Re: Incubators are a Ghetto

#26

Post by nl »

nirvana wrote: post #16

There is an emphasis on hacker news and in the startup scene on VC funding. But I think this is a mistake. The mission of a startup is not to get VC funding. The mission of a startup is to get product-market fit. Angel funding or some other solution is necessary to sustain you until you get that product-market fit. But until you do, I think you're going be in a worse position for getting VC funding. You might not be…

We're about to enter an incubator program (Startup Chile) and I have no idea what their funding rate is. I'm guessing that less than %50 of the startups get funded, certainly by VCs, within 6 months, mainly because Startup Chile supports very early stage companies.

I think the number funded is much, much less than that, and not just because they are funding early stage companies: http://hervalicio.us/post/14915671294/on-startup-chile

Good luck - I hope your experience is better than that.

Re: Incubators are a Ghetto

#27

Post by GC1 »

Before accepting money from an incubator ask the program directors for 3 to 4 references of founders that have gone through the program and 3 to 4 references of advisors to the program.

Then call the references the program directors didn't give you. Do due diligence! Find out where the money comes from which founders, VCs, and Angels support the program and the reason for their support.

As someone who's gone through a "Ghetto Incubator" I'd suggest you do as much Due Diligence as possible before accepting money from a program because you're accepting their terms too!

Re: Incubators are a Ghetto

#28

Post by esalazar »

GC1 wrote: post #27

Before accepting money from an incubator ask the program directors for 3 to 4 references of founders that have gone through the program and 3 to 4 references of advisors to the program. Then call the references the program directors didn't give you. Do due diligence! Find out where the money comes from which founders, VCs, and Angels support the program and the reason for their support. As someone who's gone through…

Totally agree! I think it is also very important to get a real feel for the people that you will be working with. I think that a lot of people forget that these will be your "partners" for the life of the company. A poorly run incubator will have incompetent people running it. Ask yourself if you think these people could potentially be a pain in the ass in the future. As GCI mentioned: DO YOUR DUE DILIGENCE!!!!

Re: Incubators are a Ghetto

#29

Post by wiradikusuma »

peregrine wrote: post #25

I have an experience with one of those "Bad Incubators" the analysis is spot on. - We all met weekly for presentations, half the advisors knew what was going on the other half did not. Right before demo day the other half of the advisors were shocked that we had pivoted and planned on selling our OLD idea. Those same people then pitched our OLD idea to the few investors as a possible pivot, which was a huge WTF. - Th…

tl;dr blind people mentoring blind people?

EDIT: the second "blind" means lack of technical skill

Re: Incubators are a Ghetto

#30

Post by littleidea »

jsavimbi wrote: post #17
littleidea wrote: post #12

Earlier quoted context omitted.

There are some things my discretion says should not be made publicly specific. While everyone is entitled to have different sensibilities, I don't understand why you would refuse to discuss this in the abstract. I'm not sure what you actually read, but at the end there is a link to this google doc which appears to be the closest thing to publicly available data. https://docs.google.com/spreadsheet/ccc?pli=1&key=0Akkh…

> I don't understand why you would refuse to discuss this in the abstract. Because it's just gossip and opinion. There's nothing to discuss.

I couldn't disagree more. In this case, being more specific is only going to multiply the gossip and opinion.

There is more than enough data in the google doc to support a discussion.

Furthermore, you now have comments from people who have had the first hand experiences I described. I'm willing to wager they didn't go through the programs I would specifically identify.

I'm not sure what else one could need to have a discussion, but suit yourself.

Post reply on HN