Incubator models unfolding fresh scope of growth

Afthonia Lab
4 min readFeb 4, 2020

Incubator models have been developed since 1985 by various consultants and researchers, and according to an article, there are over 20 plus incubation models! Since incubation models are built to address the anticipated demands of struggling entrepreneurs in the market. As innovation picks up speed, new business challenges emerge in a dynamic market scenario. This makes it imperative for the incubation models to fluidly morph to be able to help businesses become financially viable and freestanding. This dynamism is understandable as incubators don’t exist in silos and integrate within their universe with multiple elements like their industry network, partners and government to create a value-driven model.

Finger on the pulse
Incubators bring with them seasoned experts and established leaders who are able to identify correctly the unique challenges faced by businesses. Challenges of each business entity may differ and are also affected by the stage at which a business stands in its lifecycle. For instance, the needs of someone in the proof-of-concept stage would be more product-focused and building a business model around it while that of a startup at a small transaction stage would be to get more business and bring scale to the business.

Evolving Incubator models
The incubator ecosystem has evolved in the previous few years to include stakeholders and participants covering the field of technology, legal, design and marketing, investors and mentors. No longer restricted to only pumping funds into startups, incubators of today bring a host of solutions in terms of operating facilities, infrastructure, capital equipments coupled with access to seed capital, training, industry partnerships and business planning. The thrust is on supporting entrepreneurs to put a steady foot forward and sustainably scale in an over-crowded and challenging market space. Incubators have moved beyond just fund-raising to ensuring through their wide-lens support, companies are trooping sustainably ahead towards onward growth.

The Incubator space is dynamically responding to the needs of the startup community and laying critical emphasis on mentoring. Great ideas and products may need iterations and processes and business models may need pivoting which might be beyond the comprehension or skill set of budding entrepreneurs. For ideas to grow into robust businesses, incubators are re-working the restrictive interpretation of ‘mentoring’ meaning a teaching model. Mentors provided in the incubator system are invested in the success of the venture and are also attempting to provide sufficient follow up mentorship. Not stopping at fine-tuning the model, product or service, they also help build the go-to market strategy, sometimes also opening access to global markets.

With greater collaboration within the ecosystem, incubators are acting more like a bridge between businesses and other stakeholders such as corporates and investors, helping them move into and integrate themselves with the institutional way of functioning.

Integrating functioning with the government bodies and regulators to promote innovation and entrepreneurship, incubators are creating benefit across regions and verticals. Given the ambitious target by the present government of a $5 trillion economy by 2024 which calls for a 9% GDP growth. The premium placed on their contribution is evident from the recent surge in state-backed startup incubators under the Atal Innovation Mission.13 Atal Incubation Centers (AICs) have been approved with a grant of Rs 10 crore each and the idea is that every one of the 110 named smart cities and the top educational and industrial institutions of every state should aspire to have a world class incubator which shall fuel further growth alongside generating employment.

Measurable Impact
More Fortune 500 companies are in the news every other day for launching some form of innovation lab or incubator. In order to build mature incubator models, incubators must create measurable impact, where businesses graduate from their programs financially viable and freestanding. Measuring will allow pivoting the ecosystem, leveraging the strengths and striving for excellence to create more robust and structured incubator models. The measure of the outcome for Incubators however could differ and could in fact be pegged against multiple parameters:

1. the number of stellar exits; whether getting POC, revenue growth, adding capability and more,

2. the sustainability of the startups nurtured,

3. the scalability of the model, and

4. the employment rate generated by Incubators needs to be viewed as a transformational set up for startups. In the sense that an incubator provides the startup with tools or resources that it may not have access to or at a value that it may not be able to provide at that stage.

As the Indian market space is evolving and maturing, the incubator space is upping its value proposition to build its viability and becoming of increasing consequence in this new landscape.

For them to play a more integral role in order to contribute to the economy and the startup universe, a simpler regulatory landscape is desirable.

DISCLAIMER: The views expressed are solely of the author and does not necessarily subscribe to it. shall not be responsible for any damage caused to any person/organisation directly or indirectly.



Afthonia Lab

Afthonia focuses on early stage startups in Fintech and provides them with a trusted ecosystem to grow and succeed. #incubator