Tuesday, October 16, 2012

What's Cooking in the Incubator?

At the State of the City address in 2012, Mike included as part of his speech the intention to form a "business incubator".

Sounds good on the surface.  With the business community paying the majority of taxes and fees to the City, and a high number of entrepreneurs creating their own jobs, who doesn't want to develop small businesses and help them reach their potential?

I wish I could say there has been progress on this, but the fact is no one knows for sure.   All inquiries into this project - including from people who have worked in these endeavors before and have experience - have gone unanswered.

No one has defined what this "incubator" is specifically going to accomplish, what business sectors are going to be targeted, what time frames are for goals, and especially - where is the money going to come from and how much.

The following commentary regarding business incubators is from a TechCrunch blog.  It specifically discusses IT business incubators but I believe the points can be expanded to any business field.

It's important because there is a perception that money is getting thrown around like confetti on non-priorities  with no reason or end in sight.  The last thing the City needs is an ultra-high-risk project with no definitions corralling it and no information distributed.

90% Of Incubators And Accelerators Will Fail And That’s Just Fine For America And The World

Key excerpts below.  Entire article in the link above.

I would like to present the claim that 90 percent of incubators will fail. By “failing,” I mean they don’t return (or don’t exceed) the money that was put into them. On what basis do I make my claim? Well, the hundreds of incubators are really startups, and the oft-cited rule of thumb is that 9 out of 10 startups fail.\ 
Is there any reason why incubators would be different from other startup spaces? Just as we’ve seen with daily deals, mobile apps and games, it’s clear only a few (maybe four or five) will become leaders in the category. The rest will absorb more capital than they can return, shut down, or pivot into something else. 
1. Too Many Companies, Too Little Mentorship
2. No Clear Funding Path After The “Program”
3.  Lack Of Business Development Resources

So - what exactly is the status of Dunwoody's proposed "incubator"?

No comments: