14 Comments

Summary:

A new crop of incubators, labs, and training programs are cropping up to teach tech entrepreneurs the skills they need to turn their idea into a business plan, prototype, and company. These e-schools – entrepreneur schools – are designed to create the founders of tomorrow’s successful startups.

TechStars marquee

Traditionally, business school gave young businesspeople the “chops” to get ahead in corporate America. But even though the tech startup has become an almost everyday part of modern business, B-schools are still highly focused on issues that large corporations face. And while many do now offer entrepreneurship classes, today’s smaller, more nimble, and highly iterative businesses need a place that’s specifically dedicated to their unique needs. Where’s a person with an idea to learn how to make their own job or company? Enter incubators.

Think of them as e-schools — entrepreneurship schools, to use a term from entrepreneur Steve Blank — of varying lengths and formats that help businesses launch by providing hands-on startup skills, space and mentorship (and often taking equity in return).

As the number of incubator and accelerator programs increases (to the point that TechStars’ co-founder David Cohen warned recently of an “implosion”), there are more options for entrepreneurs to work with co-founders and test ideas in safe spaces. Choosing the best programs to apply to depends on your readiness and idea phase.

Phase 1: Get smart
A great source of new founder education is the Founders Institute, a four-month program that is regularly hosted around the country to promote the business of technology startups and “avoid common mistakes that lead to the failure of a business.” Its “semesters” are heavily focused on classroom-style learning to provide company setup recommendations, networking, and expert advice. The program’s founder equity exchange requires that participating startups give 3.5 percent, an amount of equity that is split between other founders, mentors and the Institute.
Phase 2: Validate and prototype
After you’ve identified a need but before you’ve validated your idea, a pre-incubator like Founder Labs (hosted by our organization, Women 2.0) can help you overcome what’s arguably the toughest phase in launching a company: building a co-founding team and validating your idea. Over the course of five weeks, a group of 20 people (50 percent female, 50 percent male, and half with technical backgrounds) spend their nights and weekends meeting with potential customers “pitching their solution” through customer development practices and rapidly prototyping their product with  lean startup principles to be nimble and high-cadence. Weekly the teams present a “product release” — demoing a product and sharing learnings from customer development to gain guidance from founders and angels who have been there (and lived to tell). (The costs for the next Labs are still being determined.)
Phase 3: Prepare to share your idea with the world
After rounding up the team and testing your product or service, an incubator or accelerator is a good idea when funding and space become necessary. These programs offer a full ecosystem of services that you’d be unlikely to access on your own, like discounts for services that new companies need.

The fabled TechStars accelerator offers between $8,000 and $16,000 in seed funding (the earliest stage of venture funding), mentorship and three months of company development time in its Boston, Boulder, Colorado, Seattle, and New York programs.. TechStars wants to be “thought of as an experienced and well connected co-founder” and takes six percent of founders stock, which may be a risk worth taking depending on your setup.

The Mountain View, California, seed fund Y Combinator receives more than 1,000 applications for its biannual classes and accepts between 2.5 and 3.5 percent of the two- and three-person teams that apply (if the five to 10 percent acceptance rate scared you away from B-schools like Stanford’s Graduate School of Business, YC may not be your best option). YC was started with the idea that the actual monetary amount needed to get started is tiny. While YC gives companies about $20,000 in seed funding in exchange for two to 10 percent of equity, the organization believes that it’s not money that founders need but the opportunity to take a leap of faith to work on their ideas.

With a few applications still coming in, about 40 companies have been selected to join the upcoming round for January through March 2011, which will have the YC trademark of weekly working sessions and founder dinners. This meetup schedule is different from the Unreasonable Institute, another great Boulder incubator, which insists that founders are most productive when they live and work together–in a vacant sorority house no less.

And in Women 2.0’s stomping grounds of San Francisco, the new i/o Ventures focuses heavily on mentorship with the companies it provides $25,000 with to cover expenses during the four-month incubation process. With partners from the likes of MySpace and BitTorrent and mentors from companies including Yelp, Digg, Mint, and MochiMedia, you just might believe them when they say they know how hard it is to build something.

Depending on your needs and location, additional recommended programs include AngelPad, an amalgamation of Google alumni, with a similar mentor-heavy approach. Astia is a global program to expand funding for female entrepreneurs. But those are just a few among dozens of helpful programs.

Shaherose Charania is the CEO and co-founder of Women 2.0, a San Francisco-based organization dedicated to increasing the number of women starting high-growth tech companies. Emily Goligoski produces a video interview series with CEOs and co-founders for the organization. Women 2.0’s pre-incubator program, Founder Labs is currently accepting applications for the spring 2011 Labs program. The deadline is December 5.

Image courtesy of Flickr user Andrew-Hyde

You’re subscribed! If you like, you can update your settings

  1. I think incubators like these are really going to help benefit entrepreneurs who, even with falling overhead costs, struggle to attract the talent and gain the traction necessary to make a really fantastic idea take off. I think a common misconception is that all an entrepreneur needs is a good idea; really, all an entrepreneur needs is a good idea, and the skills to execute that idea. Both are rare resources, and they are found more often apart than together.

  2. Great article – I love the increase of options for Entrepreneurs interested in learning. I think another resource to consider is Udemy (http://udemy.com/), which is starting to offer many different “courses” on entrepreneurship. Udemy is different from an incubator in that the courses can be taken on one’s own time, whenever you want, and there’s no application process. Furthermore, most courses are free and you can do them on your own time, wherever you are in the world.
    Disclosure: I’m the co-founder of Udemy.

  3. don’t forget raise money at the Open Angel Forum! :-)

  4. David Ambrose Sunday, December 5, 2010

    I’ve spoken with a half dozen bschool students over the past three months and it seems that class coursework is shifting to learning about tech startups. One such class, from an interview that I was on with Stanford GSB students covered early stage ideation, financing, hiring, etc. as well as all the basic building blocks less execution.

    Execution is the only part I’ve seen missing from the curriculumnwith the exception of starting a company yourself.

  5. Wondering if you could also share any data of their success rate of these incubator companies ?
    They are staying in business, so I am guessing, whatever start-up they decide to mentor and invest in, is becoming successful..

  6. Great advice for getting started. One step that wasn’t mentioned is how to find a compelling idea. Even though ideas are “a dime a dozen,” it helps not to start with a bad idea. Innovation and Entrepreneurship by Peter Drucker is a good read for this. The Blue Ocean Strategy is another.

  7. Shaherose Charania Monday, December 6, 2010

    One more incubator to mention, a friend, partner and advisor to Women 2.0’s Founder Labs is Dave McClure’s 500Startups — part of Phase 3 noted above. Teams with a functional prototype can be referred into the 500Startups incubator program which leans emphasis on design/UX, lean startup metrics, and customer acquisition via online distribution platforms. Investment is between $25-75k for 5-7% equity. The first session get’s kicked off in January http://www.500startups.com

  8. For those interested in stats and information about the companies that come out all of these accelerators, take a look at this amazing spreadsheet created by Jed Christiansen

    https://spreadsheets0.google.com/ccc?key=t_toYuVyy6fci0MAiIaZ30A&hl=en#gid=20

  9. GigaOm >> Training for Next-Generation Tech Entrepreneurs | The San Franista Monday, December 6, 2010

    [...] recently of an “implosion”). Shaherose Charania and I collaborated on the piece you can read here, and the graphic is [...]

  10. I Wish there would be more programs like these in Europe… Or is it just that They’re not that talked about? The key thing is to Find à mentor that understand your market. Business schools often talks generally. 2 years ago, during à business course, my teacher simply Find it difficult to understand My business plan about a community website. Web start-ups are only recently being understood by government and in education system…and still not enough.

    1. Nice piece Shaherose, thanks for writing it!

      I/O is accepting applications for our 2011 class right now. We are very pleased with how the first class (of 6 companies) went this year and we will grow our class size in the coming year.

  11. David – I’ve seen at least one “entrepreneurship” b-school degree (at Cambridge, I think) that did include running a company. The thing is that the more successful you are at running a company, the less time you have for the rest of it…

    I also have no idea how well you would do in a framework like that when you inevitably realise what you’re doing has flaws, and pivot. Such things aren’t rewarded in academia or certain business cultures!

    Having done Founder Labs earlier this year, being able to change what we were doing with constant feedback was super valuable. In a way the other incubators offer this too, though since an incubator like YC is predicated on having a fantastic set of people to begin with, doing something like Founder Labs to meet like-minded and extremely crazy, capable people is a good first step (in my opinion).

  12. Having participated in the Women 2.0 labs previously, I want to emphasize how valuable programs like these are. It was here that I learned it’s ok to fail among other things. Fail and fail again we did, but by doing so we learned how and why to pivot from people like Eric Ries and Dave McClure.

  13. Tech Wildcatters is a great program and is located in Dallas. Applications are open until January 15, 2010.

    For a more extensive list of incubators go to this May 2010 Inc magazine article on the subject.

    http://www.inc.com/magazine/20100501/the-best-business-incubators.html

Comments have been disabled for this post