ROLE OF INCUBATION CENTRES IN STARTUP SEGMENT


With the commencement of technology, everything has turned digital. Starting from various courses to business everything is digitally transforming. Startups are basically joined ventures undertaken by a single individual which gradually multiplies and includes a bunch of people working towards achieving the same objective.


With the aim to promote innovation and entrepreneurship, the State government has collaborated with big institutions namely IIT-Kanpur, IIT-BHU, IIM Lucknow (Noida), KNIT Sultanpur in order to set up Incubators. The country’s biggest Incubator envisages being established in Uttar Pradesh. State Government promotes founding of Incubators across Uttar Pradesh. It is believed that every district in Uttar Pradesh should definitely build an incubator. Host Institutes like Government and Private Technical, Management, R&D institutes, organizations / non-profit organization/ corporate sectors/industry association or in PPP mode are encouraged to establish Incubators in Uttar Pradesh.


The most important role of an incubator is to help burgeoning companies - by aiding resources, access to industry mentors, interactions with other entrepreneurs and perhaps most importantly, patient capital, to get through the survival stage. Today, India presumably has the third-highest number of incubators and accelerators in the world with 140 entities. A noteworthy challenge faced by the startups understands the role that these people have within the Indian ecosystem - while terms like incubator and accelerator have become quite a common classification, there is still a lot of vagueness around the actual value that they bring with them. This uncertainty is assisted by the misuse of terms due to inappropriate practice, with every second organization defining them as an “incubator” or an “accelerator”.


The bunch of questions we receive from startups has therefore grown longer every year - for example, are incubators provider of “free” working space? Do they provide access to resources and mentors? Do they provide capital and help in generating returns? Incubators should, in fact, provide all these things and more. Startup incubators begin with companies (or even single entrepreneurs) that may be at a nascent stage of growth or development, sometimes even before the core team is fully established.


The resources provided by an incubator often include patient capital, office space & amenities, mentorship programs, networking, access to industry experts and third-party finance. While there are some independent incubators, they can also be sponsored or ruled by various firms, investors, government entities, and major corporations, to name a few. An incubator’s chief success metric is typically derived from the sustainability of its companies and not necessarily only by return on capital, as is with accelerators or VC firms. The founders want to build a product that solves problems than just creating a "startup" that can make money for them. Distinguishing the value proposition that incubators can provide – i.e. smart, patient capital in an ecosystem that is drenched with the opposite kind of investment. Large asymmetry created due to the problems created by founders and incubators to rightly price the “value add” at an early stage of the enterprise in a fair market, there’s a growing urge for investors and incubators to display their “value add, just like founders/entrepreneurs are held responsible for the performance of their companies.


However, it is important for founders to understand the different types of investment and program accessible to them, to make a sensible decision as to what suits them best at the stage that they are in. In a market where 90 per cent of startups fail, incubators and accelerators can play a key role in growing the number of sustainable businesses. While the journey for these investment programs has been relatively smooth sailing so far, the next few years will be significant. As the market matures and founders become even more astute, the responsibility will be on each incubator and accelerator to prove its value scheme and viability to build sustainable business models.


With approximately 50,000 startups, India has the third most startups in the world. Almost everyone at the rudder of these startups expects to imitate the success of businesses that went on to command multi-million dollar valuations. At an early stage of a venture, it is significant to centre on building a strong value proposition and validating that the venture is solving a problem worth solving for a customer base that is in need of the solution.


With greater exposure, many entrepreneurs leading startups can boost up the efficiency of their business model. In helping their businesses realize their full potential, a dynamic community comprising industry insiders can play a crucial role. Such experts can help entrepreneurs rationalize their business model and bring it to market at the right time. There is no shortage of talent in India. Thus, it is necessary to set up more and more Incubators with the assistance of the expertise so as to create a perfect startup.