Incubators - a rising trend

Y-combinator, TechStars, 500startups, and Seedcamp have been generating the most publicity, but there are many hundreds of incubators - and they range from the 'shared office space, power, network and telephones' model to the full on 'platform' , where the startup teams build the product, while sharing access to everything else a company requires to operate.

This is one of those topics where every time I look at Twitter or my RSS feed another worthwhile link appears - so post, and update later.

Incubators, or accelerators, have been around for a long time. Y-combinator and TechStars, in particular, have demonstrated repeated success as measured by 'graduation' from the program - companies which get have used their initial funding to demonstrate traction, and which have been acquired for useful multiples of their initial valuation. These two, like Seedcamp in Europe, are focussed on high volume consumer services delivered using the Web or as a mobile phone app. In the networking business we call these 'eyeball companies' - part of their value is their reach to many millions of consumers, some fraction of whom pay for their use of the service, and most of whom will consume advertising along with the service - often the advertising is the primary revenue generator.

Many necessary products, including the infrastructure over which these services run, are not amenable to this model - they require more investment, building hardware, and sales through channels with some degree of customization. I've been pursuing the question of whether an incubator would be a useful model for bringing together small companies with lower volume but high value markets who could usefully collaborate, while sharing a 'platform'. One example of this platform implementation is Innovation Works, in Beijing.

The Accelerator Group describes the operation

" Innovation Works houses 400 young people working away at building a wide range of companies. About 30 of these are directly employed by Innovation Works and are called the ‘platform team’. These folks (average age I guess about 27/28) are business, finance and marketing graduates whose job it is to attend to the formation, funding, administrating, recruiting for the start-up companies and helping them with their ‘go to market’ plans. In fact, they do everything other than build the product itself."

16 June 2011 Updating (again) to add YouWeb to the incubator list.
21 June 2011 Updating to add TechCrunch article on Kaufman Fellows Research study on European incubators, and Mark Littlewood's discussion of the same topic at NESTA today.
28 June Updating to add links for the newly launched Appsterdam community for apps developers to self organize in Amsterdam.
12 July - Three additions - AngelPad (Xooglers, in San Francisco), Tandem (not the computer company) Entrepreneurs in Burlingame, CA, and PwC's accelerator for Luxemburg, using Plug and Play as the Silicon Valley base.

Other commentary on incubators and accelerators

Canadian viewpoint on incubators everywhere

SRI, the original incubator, 65 years old this year - Gigaom

A very recent accelerator out of Stanford - blackbox
Steve Blank on the blackbox startup genome project

Seedcamp on the last three and a half years - status

Taxonomy- types of incubator

Incubator Chinese style - Innovation Works
TAG description

Academic incubator in Canada - Waterloo

More background on Y-combinator and 500startups
Y-combinator numbers (June 2011) by Paul Graham
21 more companies from 500 startups TechCrunch

A manufacturing incubator,in Newburyport,MA (North East from Boston)

A Cleantech incubator in San Francisco Greenstart

Another different incubator model - YouWeb , in Mountain View, Burlingame and Manhattan

Discussion of Kaufman Fellows Research study
Mark Littlewood blog post

Appsterdam site
Venture Beat article describing Appsterdam motivation, people, background

AngelPad http://www.angelpad.org/

Tandem Entrepreneurs http://www.tandementrepreneurs.com/

PwC's accelerator

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