Incubators need to reflect, pivot and re-strategise if they intend to remain relevant in the new post-Covid digital world
The recent Prarambh event brought together several stakeholders to develop a shared vision of a vibrant regional startup and innovation ecosystem. During the event, the government also announced the Rs 1,000 crore fund to fuel the launch of new startups and to support their growth prospects.
Incubators will continue to play a vital role in translating this vision into reality by nurturing even more startups to their success.
However, much like the advice offered to startups in the new pandemic-ridden world, incubators must re-invent themselves. Policymakers and grant-making organisations are concerned about the high incubator mortality rates and/or the low success rates of their graduating startups.
As public funds become scarce, incubators are being asked to re-evaluate their business models to help them generate revenues and become self-sustainable organisations.
Personalised and Digital Incubation
Each startup is unique in its vision, team skills, and execution capabilities. Yet, we paint them all with the same brushstroke when we combine them into a monolithic cohort at an incubator. The decades-old model of cohort-based incubation is being questioned and disrupted. Incubators are waking up to the reality that the deviation between founders' maturity has increased, as has the variation in stages of startups and their specific needs. The same-size-fits-all synchronised support system is not working for many startups.
Enabled by cloud computing, data analytics, and AI, the exciting promise of personalised support is not a complete reality yet. But armed with new-age toolkits and assessment methods, digital mentoring is knocking on our doors to create a more personal experience for founders of all shapes and sizes. Lest it implies a mechanical approach, such customised incubation will require even deeper skills of empathy for the incubation team - delivering hyper-relevant, right-moment learning, mentoring, and connects that move the needle for each startup.
Virtual Startup Support
Selling co-working space as a core offering was always a doubtful business model for incubators. The current pandemic has shaken this pillar of incubation ecosystem - after an initial period of shock and inaction, startups picked themselves up and resumed their journey - remotely.
They learnt how to develop products, connect with their customers, and raise funds - all virtually. They expected their incubators to partner with them in this new reality by offering virtual mentoring and workshops, and most incubators have stepped up to the plate to do just that. No longer are startups expected to have 'face time' in a co-working space, no longer are they expected to pay monthly seat fees - startup incubation has truly become a virtual phenomenon.
In the process, incubators have discovered new ways of reaching out to a larger number of startups, engaging with a global pool of mentors, and plugging into the trans-national startup ecosystems. The world of startups, incubators, mentors, and investors is now more connected than ever before - thanks to digital technologies of communication and collaboration.
Deep Domain Focus
As the world recognises the need for greater innovation in areas like public health and education and countries strive for self-reliance in their priority areas, there is a greater push for developing deep competencies in select areas.
To support such deep-tech startups, incubators are realising that, in addition to the wrappers of business models, investor preparations, and ecosystem connections, they need to hand-hold startups through their core products/services by providing deep industry (e.g., agriculture, health, finance) and technology expertise (e.g., Blockchain, AI, robotics).
Looking ahead, generic incubators will face uphill challenges in attracting and supporting great startups. They will need to develop intrinsic strengths in select areas and/or have deep partnerships to cover the vast terrain of industry/technology capabilities. We are likely to see more incubators that emulate the models of ALEAP WE-Hub, AIC CCMB, and NEATeHub.
COVID-19 has brought the need for inclusive growth into sharp focus. Bringing thousands of small towns and villages into the mainstream economic pathway is a national priority, and inclusive entrepreneurship and local job creation is the solution.
Incubators must steep themselves in this reality to support startups from rural areas, with a special focus on supporting social enterprises that address deep-rooted challenges.
Incubators must invest in building awareness about entrepreneurship amongst the youth and go all out in bringing women entrepreneurs into the folds of this movement. Enterprises across geographies, founders' economic status, and life-stages need access to affordable and high-quality mentoring that our diverse incubators are well suited to provide.
In the coming years, the hallmark of the nation's startup success will be determined by widespread and inclusive access to incubators in far-flung areas.
Virtual incubation, digital mentoring, inclusive entrepreneurship, and global connectedness are here to stay. Incubators need to reflect, pivot and re-strategise if they intend to remain relevant in the new post-Covid digital world.
(The author is Executive Vice President, Venture Fastrack at Wadhwani Foundation.)