In recent years, the Indian start-up ecosystem has evolved exponentially ushering in an age of innovative start-up ecosystem that has revolutionized the business industries around the world. A study made by NASSCOM has reported India to be the third largest start-up ecosystem in the world which is expanding rapidly day by day. Therefore, burgeoning entrepreneurship and start-ups in the country have also realized the importance of incubation centers or incubators to match the needs of the ever-evolving start-up ecosystem.
Start-ups in India have played a crucial role in the economic development of the country along with the creation of wealth & job opportunities which ultimately improve the standard of living of its population. Despite this, most of the start-ups fail within five years of their launch in absence of adequate resources and proper guidance. However, incubation centers offer a unique and flexible combination of business development processes, expert guidance, required infrastructure, etc. helping start-ups to nurture and grow by extending their support through the early stages of development.
But what are incubation centers/business incubators? Incubation centers are organizations that offer necessary facilities & resources to budding start-ups to nurture them in their early stages of development until & unless they reach a specified stage of growth. Such facilities may include access to temporary working space, mentorship support, administrative support, necessary pieces of training, and access to potential partners or investors. Since business incubators always come with a great deal of experience in either business or tech industry or sometimes both, they also help entrepreneurs for solving specific issues through an array of business & related services, initial seed funds, lab facilities, advisory, network, and linkages.
The handbook for non-profit incubation managers authored by the IIMA’s Centre for Innovation Incubation and Entrepreneurship (CIIE) states “Incubation should be observed as a process of de-risking an idea or a start-up and helping them to improve the chances of success”. In a nutshell, the primary goals &objectives of the incubation center include extending assistance and support to the start-ups in order success rate of emerging businesses and start-ups, creating employment opportunities in the country, and commercializing innovative technologies
In the year 2016, the Government launched the Atal Innovation Mission in coordination with the Niti Aayog, under which Atal Incubation centers have been started in different parts of the country with the primary objective of nurturing small-scale businesses and start-ups to become established & sustainable businesses in future.
Incubation centers run incubation programs for multiple start-ups who are part of a team with the expectation that the participants will move out once they reach an established business stage while some decide that their business isn’t viable enough and shut down their businesses.. In recent years, multiple business incubation centers have been established due to increasing entrepreneurship, the advent of newer technologies, technology transfers, and corporate downsizing. Read further to find out more about the concept of incubation centers and business incubators, their role for start-ups, types of incubation services, and how they could be helpful for your start-up-
Role of incubation centers for Start-ups
For a better understanding, try to imagine a sole space focused on providing a healthy ecosystem for entrepreneurs to develop their ideas and build successful start-up businesses, which is exactly what an incubation center does. It acts as a safe space for young entrepreneurs coming with little experience allowing them to enhance their creative ideas into successful business propositions.
Along with this, the start-up founders also have multiple benefits in consulting an incubation center with minimal costs and much-needed expertise in the industry. Since most start-ups struggle with financial resources, incubation centers offer co-working spaces, administrative & technical assistance, business networking assistance, financing assistance, building a business plan, and advice related to the protection of intellectual property rights, etc. among others for the participant start-ups. Most of the participant start-ups spend around 2-3 years under an incubation program while contributing to each other’s business which results in lowered costs and overhead charges.
Other than these, here are some of the functions of incubation centers/incubators for start-ups-
- Provide mentorship to start-ups to deal with their market competition & other established industry players.
- Help to expand their knowledge of the basics of business.
- Create job opportunities for people of different ages & experiences be it any fresher or any veteran business executives.
- Offer access to financial resources through various private funding and government schemes & programs.
- Bring higher credibility & trustworthiness which makes it easier for start-ups to seek loans & credit facilities from the bank or financial institutions.
- With a vast network of veteran experts and industry leaders which could help start-ups for funding or entering strategic partnerships.
- They organize higher education programs including comprehensive business training programs.
- Incubators also act as advisory boards and mentors.
- They also offer marketing and PR assistance to new companies for brand establishment.
- Help with regulatory compliance & intellectual property management.
How Incubation Centre Could Help Start-Up?
Provided below are some of how an incubation center could help your start-up-
Validation of Idea
Every entrepreneur believes that his idea is the best, most innovative & revolutionary in its approach. But, it is not always the case. Every idea needs to be validated by someone who has vast knowledge and experience in the industry to know whether it can work or not. For instance, there may be chances when an innovative idea may not have many chances of commercial success or even doesn’t address a compelling problem. For early-stage entrepreneurs, business incubators offer assistance to carry out market research and access to strategic mentors & investors who could offer useful insights for the same.
Mentorship support
Usually, start-up founders are either college dropouts or young graduates who have an innovative business idea, but little experience in managing & growing a business. Thus, incubation centers offer mentorship support to entrepreneurs helping them to understand the intricacies of running a business successfully. Sometimes start-ups might have to change their recourse to another direction and mentors with their expertise may help entrepreneurs to see the right direction.
Offering Temporary workspaces
Since most start-ups struggle with adequate financial resources sometimes they may not have adequate funds to rent a workspace. Thus, incubation centers also offer shared workspaces to participant start-ups where they could work and support each other during tough times. In this way incubation centers often help entrepreneurs to build long-lasting friendships.
Fundraising assistance
Since incubation centers/incubators are well-entrenched & well-networked within the start-up ecosystem, they could help start-ups and entrepreneurs to meet potential investors or strategic partners. They help entrepreneurs to find suitable business investors within their expanded network and even help entrepreneurs to prepare themselves for the funding process by helping them to learn business etiquette, prepare pitch decks and effectively present their business idea. Thus, incubation centers assist start-ups with viable business ideas to raise funds for their business.
Shared Resources
Since multiple start-ups are participating in a business process around the same time, all such start-ups benefit from the shares resources offered by the incubation centers such as workspace, administrative & technical assistance or business costs, etc. which helps start-ups to contribute to each other’s business and reduce operational costs ultimately helping start-ups to faster realize their ideas. For instance, a group of participant start-ups might share common administrative personnel leading to reduced business costs. Likewise, a group of start-ups participating in any trade show might share the expenses of setting up a booth, etc.
Entering New Markets–
Once you gain commercial success in the country, you wish to expand your start-up business globally. However, it is not as easy as it seems as you are unfamiliar with the foreign landscape and the market situations. The incubation center/ incubator offers guidance and additional support for negotiating terms or managing business affairs when expanding into overseas markets where the local landscape is unfamiliar
Expanded Network–
Apart from the support & guidance offered by the incubation centers/incubators or start-ups, they support entrepreneurs to locate potential investors and partnerships within the established entrepreneurs in the area, which could either be in the form of mentorships or mere introductions ultimately leading to lucrative deals. Not only this, but start-ups also help established entrepreneurs allowing them to meet with a key partner/investor leading to greater opportunities.
Top Incubation center in India
Now that you have known how an incubation center or incubator could be helpful to your start-up, there are the top ten incubation centers in India that you can apply to-
CIIE IIMA
The Centre for Innovation Incubation & Entrepreneurship (CIIE) is the incubation center situated at the heart of IIM Ahmedabad is a pioneer in the field of entrepreneurship and has given birth to various well-known today. It was registered as a not-for-profit company governed by a board comprising government, industries, and IIMA representatives in 2007.
It helps start-ups in cultivating a rare breed of entrepreneurs through incubation, acceleration, mentorship, and offering funding assistance to them. The CIIE IIMA has engaged itself across various tech and impact areas like energy, environment, agriculture, healthcare, and affordable technology.EzySolare, Glowship, Glass, etc. are some of the start-ups incubated by the CIIE IIMA.
IAN Incubator
Started in the year 2006, the Indian Angel Network (IAN) incubator is a start-up incubator established by the largest group of angel investors in India established with the support of DST. Since the members of this incubator institution are prime leaders in the field of entrepreneurship, they offer high-quality mentoring, vast networks, inputs on strategy as well as execution apart from financing resources in fields such as agriculture, e-commerce, gaming, internet, mobiles, etc. FarMart & NativeSpecial are some of the start-ups incubated by the IAN incubator.
SINE
The Society for Innovation & Entrepreneurship (SINE) incubation center was established in the year 2004 and is hosted by the IIT-Bombay as an umbrella to promote entrepreneurship. This incubation center receives financial assistance from DST and hasa technology development board to offer financial support in the form of soft loans, seed support, or equity participation over five years. It offers help to start-ups in the impact areas of tech-based start-ups Aqua, Bhugol, ideaForge, etc. are some of the notable start-ups incubated by SINE.
ICreate Start-up Incubator in India
ICreate is the acronym for the International Center for Entrepreneurship and Technology, which is an incubation center located in the peripheries of Ahmedabad, Gujarat. It is an independent center founded with the key objective to encourage entrepreneurship and innovation. It is primarily focused on varied fields such as Information technology, electronics, Biotechnology, Nanotechnology, Robotics, Non-conventional green energy generation, bio medics, food processing technologies, etc.
DLabs Start-up Incubator
DLabs is a unique pre-incubation program that is funded & supported by the Department of Science and Technology. It is located on the campus of the Indian School of Business and works closely with the alumni of ISB helping participant start-ups to get their requisite business connections. DLabs has played a key role in the success of around 120+ start-ups while getting mentorship support from 400+ expert mentors and has run 12+ accelerator programs. Envirofit, Chakr Innovation, Millet Bowl, Ecolibrium, etc. are some well-known start-ups incubated by DLabs.
Therefore, young entrepreneurs who come with innovative ideas yet no experience or connections in the business industry need resourceful sources like incubation centers that support them in the early stages of business with various crucial business functions from business development, raising funds, or even helping them to meet potential investors at times when there are lesser chances of their survival. Incubation centers also provide mentorship to start-ups so that they could build unique products and survive among their established market competitors. For instance, a biotechnology start-up could benefit from the experience of a retired pharmaceutical executive having a first-hand experience in the development & clinical approval process of a drug.
