Across India, many incubators have been bringing innovation under one roof. For many entrepreneurs, being part of something larger has helped them to get their business off the ground more quickly. Incubation centres have been acting as a perfect bridge to make the base step from idea to execution. Achieving results with the incubation model of innovation, however, depends upon the geography, environment, and access to informed industry resources.
The discussion panel for this session on the importance of incubators included-
A series of questions were asked by Shashank Randev, Founder VC at 100X.VC, to the panelists. Let us have a look at the various questions and the answers given by the panelists.
How is the AIC supporting startup entrepreneurs?
Dr Abha, CEO of AIC, BIMTECH answered this question. According to her, incubators are the underdogs of the entrepreneurship ecosystem in many ways and provide one of the most nurturing ecosystems for startups. AIC, BIMTECH is based in Greater Noida. This incubation centre was started on 20th January 2018. Since its beginning, they have incubated around 63 incubatees or of an application base of more than 1000 applications. There is a three-phased program for the incubatees.
They start with people who have ideas and have not registered with ventures. They come under the first phase, which is known as KHOJ or ideation level. AIC helps these people, BIMTECH to have a prototype ready for going into the market. It takes around 3 to 6 months. Once they are through with that, they are put into the next level, i.e. GURUKUL or the incubation phase. This lasts for about 9 to 12 months.
In this time, their prototype is refined, and it is made market-ready. They are also helped to get the first level of customers by getting them into pilot projects where they can test their prototypes. When they finally have a revenue matrix or the customer matrix, they are put into the third phase known as the UDAAN phase or the acceleration phase. Here, these ventures are made investment-ready. So, they are prepared in such a way that ensures that they have all the things that an investor would look for.
Uday agrees with Dr Abha that incubators are not so within the ecosystem at this particular moment. He thinks that incubators are not meant for everyone. Because when we say incubators, we need to have a certain set of people within the ecosystem. Many entrepreneurs are working on their own, and they are fine with that. But some people would require an incubator at the validation level or at a level where they would need credibility within the ecosystem as well. At AIC, RMP, they believe in one philosophy which is that the incubator is for new-age entrepreneurs to build new-age India.
The sectors that they cater to are agriculture, communication and technology, education and health care, social impact. Moreover, incubators play a very important role in the ecosystem. AIC RMP has launched a foundation program for budding entrepreneurs. It helps the people at an ideal level to go through a structured learning approach. They partner with academic institutions because a lot of raw talent, innovators are there on academic campuses as well, including technology campuses. They have also rolled out a faculty development program on entrepreneurship for faculty members.
On asking the same question to Alok, he says that IIITD incubation is an academic incubator. Their focus area is more into technology. Whenever a startup comes in, their first question is what benefits they want to leverage from IIITD, Delhi? If there is any benefit they can leverage, they can utilise the technology expertise, labs, on then they are recommended to come. This is the vision and the moral value with which this incubation centre was started in 2017. The startups that are coming to IIITD are based on three categories - student startups, faculty-based startups and faculty-mentored startups.
Why are incubators more important now than ever?
According to Dr Abha, this is not something that was not visible. If we consider trends based on employment statistics and the way the industrial sector is growing, this is something which people would have realised much earlier. Talking about the incubatees of AIC, BIMTECH, these have created more than 300 jobs. So, incubators are the ladders for the ventures to create jobs. This is because when an incubator helps the ventures to overcome the challenges they are facing, they become job creators. So, the incubators are needed in our ecosystem.
Uday thinks job creation is a very important element of incubators. There are three key elements of any incubation centre - innovation, technology and job creation. If these three elements are there, that is where a startup would succeed. So, an incubator is more like a sounding board at the idea level. A lot of innovators would need that. In addition to this, they would need a lot to connect with the right ecosystem and the right players or stakeholders. He also believes that countries like Israel and Japan have thrived based on innovation in entrepreneurship. So India needs incubators to rank up in the innovation category.
Alok mentioned a very strong key point that with all the incubators, co-innovation is one of the most important aspects that has merged over time. Many of the big companies have tied up with the incubators to support themselves and their products. Even, some of the government organisations from different countries are approaching the incubators. Moreover, incubators provide the style of the environment. And this cross-pollination of the ideas is something that can be built on a strong base with the help of incubators.
How critical is the need for conversion from an incubator to a focused accelerator to provide a more close-knit mentorship and progress for startups?
Incubators and accelerators play two different roles. Think about incubators as schools and accelerators as colleges. The kind of need which a school student has is the understanding of certain things, knowing how to grow, etc. so the handholding and mentoring which is there in the schools is very different from that in colleges. The same is the difference between an incubator and an accelerator. So when you go to an accelerator, you are much more mature, you have an understanding of what is going on in the market, and you have reached a certain level of traction. Hence, there is no need for conversion from an incubator to an accelerator. Both of these are different steps of the ladder and have a different role.
Do incubated startups have the upper hand while raising early-stage funds?
Yes, incubated startups have the upper hand while raising early-stage funds. This is because once they are with any incubator, it adds credibility as that has a selection process. And that selection process is not just taking space. After verification and identification of the product, they are into the incubation centre, and that credibility is added. That does not mean that a startup without an incubator cannot raise funds. It can be successful, but the incubator is an add on for them. They can improve their product or get good mentorship or different opportunities to collaborate. This gives them an added benefit of getting early-stage funds.
Advice to the founders on the landscape post COVID-19
Many of the startups can look at it as an opportunity. Some of the startups are utilising the kind of resources that they have, and they have come up with things that can generate their sales revenue. For example, a 3D printing manufacturing space has started creating ventilator devices that can change from a ventilator to multi-ventilator utilisation. This device was in demand in many of the hospitals. So instead of staying focused on what they already had, they tried to utilise all the resources. Hence, it all depends on your thinking. If you think about it as a problem, it will be a problem. But if you think about it as a challenge that you have to overcome, you will find solutions. It depends on how you look at this as a founder.
In addition to this, this is a great opportunity for upcoming entrepreneurs who have to start their entrepreneurship. They can come up with innovation concerning the problems around them. They should carefully choose the theme to work on. Agriculture and education are the two sectors that have a lot of opportunity post-COVID-19. Moreover, they should adapt to the remote working style.
There are a lot of challenges post-COVID-19. But the number of opportunities is more than that.
Published on: June 13, 2020