Building a tech business from scratch can be a tricky task. Many entrepreneurs have a great idea but struggle to nurture it. You may have considered applying to a tech incubator, but can they really help get your business off the ground and give you valuable exposure to experts and facilities?
It is true that several tech incubators have been behind the success of some notable examples of digital or robotics business ideas, but that is not the case for everyone. Let’s explore tech incubators in more detail, to help you decide if applying to one might be the boost your business needs or not.
How do tech incubators work?
Growing ideas through collaboration is the essence of any incubator, not just the technology-based ones. At an incubator, you don’t even need to have set up a company, you just need an idea that others can see the potential in and help you build into a full-blown startup.
This is also what differentiates incubators from accelerators. Incubators foster new ideas at the very early stages. Accelerators take already formed startups and accelerate their growth to get them market ready.
Incubators are often set up as part of a larger organization. Here in the UAE, for example, startup ecosystems like the Dubai Technology Entrepreneur Campus run them, free zones offer them as part of their membership, and universities or the government entities frequently set them up.
This means two things. First, they often specialize in specific sectors, such as healthcare or technology – hence you get tech incubators that are aimed at technology and digital-based innovation. Second, their offerings vary. However, most provide access to a common set of core facilities, such as hot desks and collaboration rooms. They will set the entrepreneur up with an expert mentor, facilitate networking with like-minded people, and identify funding opportunities.
When to consider a tech incubator
If your business is far along in its development – you have a prototype product or service already set up, for example – then you may wish to look at an accelerator instead. If the core of your idea is not technology-based, then a tech incubator is not the right incubator for you, but do consider one if:
1. You need technology expertise
Sometimes you have the idea but not the knowledge to back it up. Maybe you’ve thought of an e-retail app because you know the market but don’t know that much about building apps. Maybe you can see where artificial intelligence could take an industry to the next level, but need a true expert in AI to guide the way.
If this is you, then a tech incubator will be the perfect fit. The mentors on hand will be able to show you how your idea can become reality, and even know who has the skills to help you do it.
2. You have a problem that needs solving
Maybe you have a lot of tech expertise but you’ve hit a roadblock anyway. You have started building a new type of robot, for example. It works fine but you’re conscious that some aspects of its design are not cost-effective, and you don’t have the equipment or knowledge required to test better options.
With a tech incubator, you will be able to explore which is the right option. You will be able to collaborate with like-minded people who may have overcome the same issues already and discuss the options in detail with tech experts.
You may even get lab space to work on the new designs and prototypes. In a 2019 survey of 428 UK startups, approximately 97% listed access to lab space as a key benefit of incubators and accelerators.
3. Your business plan is confusing
Writing business plans is difficult. There is a balance to be found between writing too much and too little. You need to know how to project finances and cash flow, to have fully researched the market, and to set realistic goals.
If you are finding your business plan is confusing or that key sections remain painfully blank, then an incubator can help. You will meet people who have written hundreds of these, who will know the market and will show you how to be realistic about business growth.
4. You struggle to access funding
Google’s 2019 Tech entrepreneurship ecosystem in the United Arab Emirates report estimated that the average tech startup needed approximately US$17,000 to get up and running. That is a considerable initial investment for practically everyone, and an early stumbling block for many budding entrepreneurs. However, if a funding crisis is holding you back, fear not. There is a wealth of funding opportunities out there, and sometimes all it takes is some guidance and knowledge to help you access it. Tech incubators are perfect for this, because they often know the investors, so will likely know who will and who won’t be interested in putting capital behind your idea. Some incubators even have their own investment fund to offer.
5. You could benefit from extra credibility
We all know the old saying that it is not what you know, it is who you know. For some entrepreneurs, especially those looking for funding, this is a stumbling block that can feel insurmountable.
A tech incubator can help you in two ways. Firstly, it will put you in contact with people who can open doors. Secondly, being a part of a big-name tech incubator can help simply because it gets your name out there. It makes others sit up and pay attention because other people have clearly seen the merits of the idea.
6. You are heading towards burnout
Considering that, according to MAGNiTT, there has been a 40% drop in startup funding deals across the MENA region between 2019 and 2021, it is easy to see why entrepreneurs are feeling the pressure. It can be emotionally draining and the continual long hours working to secure the future of the business can start to grind us down.
Some tech incubators will help you consider this wellness aspect of your business. They will show how you can build your company in a way that avoids burnout for you and your employees.
Looking for startup support? Consider Sandbox
Sandbox is a first of its kind startup program based at Dtec. It is designed to nurture the very best entrepreneurial talent through mentoring, subsidies, and a range of support services. But unlike other incubators it’s also fully transparent. Find out more at https://sandbox.dtec.ae/