While the world pins its hope on an effective COVID-19 vaccine, many countries have already started exploring the next frontiers of their economic recovery and national development. Recently, India launched the Aatmanirbhar initiative to make in India, for India and the world.
Despite the lockdowns and depressed spirits, Uttar Pradesh and Delhi have announced ambitious plans to become favoured destinations for global startups. Programmes announced by ISRO and RBI, encouraging spacetech and fintech startups, look poised to strengthening India’s innovation ecosystem.
There is increased interest to provide more support to startups in key areas like health, education, agriculture, and energy, with incubators playing a critical catalytic role.
Events of 2020 are an opportunity for incubators to reflect on their mission and effectiveness in building successful startups. Incubators need to evolve themselves into viable institutions while they continue to help launch and scale successful startups.
A conversation with incubator management teams about their KPIs and outcomes often reveals metrics on the number of startups that have gone through their programmes, the number of mentor hours or even the number of workshops conducted. While these are legitimate indicators of an incubator’s operations, they do not throw adequate light on the impact that incubators are expected to produce, i.e. startup success.
A more useful set of measures will track the number of startups that meet business goals defined at the commencement of the incubation programme, and hence have “graduated” based on goal achievement rather than the fact that the last day of the programme has arrived.
In a typical incubation programme of three to four months, startups usually experience changes in their products, business model, and target customer segments, but few early-stage startups see a phenomenal jump in their revenues or funding.
Hence, incubators must track their graduates or alumni over time to see how many are still operational, and how well they are performing against market benchmarks of revenues, profits, institutional fundraise, and jobs created. Startup success measured through this lens is the ultimate statement on incubator effectiveness.
Customised startup support
To ensure startup success, an incubator’s core responsibility is to provide multi-dimensional and customised support to each venture in their cohort (if it is a cohort-based programme). But, without a reliable mirror to reflect each startup’s unique strengths and improvement areas, incubators often go astray in their support – offering mentoring or workshop inputs that may not be of interest or relevance to a startup’s needs.
Incubators also need an objective system to continuously evaluate how well startups are maturing. An underlying framework, like the Startup Maturity Model and allied assessment methods, must become important parts of the incubator’s solution set.
As the saying goes, “If you don’t know where you are, no map will help.” Incubators must ensure that during on-boarding, each startup goes through a baseline maturity assessment (a “you are here” pointer towards its overall health, along with relative strengths in areas like finance, team, and product). This becomes the basis for defining startup-specific goals and milestones of the programme.
The incubator must regularly ask each startup to conduct a self-assessment to receive feedback on their health. Such assessments may be moderated by mentors and incubator teams to ensure complete objectivity.
Results of ongoing assessment scores can be used to track the overall performance of the cohort, and also help identify startups that need expedited support/access to investors and customers. Leverage technology in conducting ongoing assessments and delivering stage and needs-specific solutions to startups is an opportunity not to be missed.
Personal coaching for founders
Entrepreneurship is a lonely journey – without adequate emotional and social support, founders often go off target on their missions. Incubators need to understand and address this need in their offerings. A typical startup mentor provides an outside-in view to a founder, and much-needed business advice and connects, but will rarely touch upon the personal side of the relationship.
Founders need not become just business advisors, but also leadership coaches as they take their ideas forward. It is a known fact that as a startup matures into an operating organisation, one of the biggest stumbling blocks is the founders’ mindset and organisational management skills – hence, the need to keep an eye on founders’ maturity as well.
As we start a new year, incubators must learn from the pandemic-induced upheavals and build their own resilience to support, launch, and grow robust startups.
Edited by Kanishk Singh
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)