If only they had existed 15 years ago. I’m talking about tech incubators, in some places called innovation centres—organizations that provide professional guidance as well as bricks ‘n’ mortar infrastructure for tech entrepreneurs. Whatever the name, these public-private institutions are proving to be the lifeblood of many start-up firms around the world.
The reason? Organizations such as MaRS—the Toronto-based high-tech, science and social innovation centre we call home—offers us the support and insight we need to focus on our business goals. That means modest monthly office rent, face time with industry experts and the breathing room needed to do what we do best—build industry-leading application acceleration software for Microsoft servers.
When I started out as an entrepreneur many years ago, tech entrepreneurs were often left to their own devices when it came to setting up a business and commercializing their innovations. Need start-up capital? Hustle and find yourself a bank manager or angel investor willing to cut a cheque. Don’t know whether you’re on the right path with product development? Pay a hefty fee for a consultant’s advice, or take it to market and hope for the best.
Nowadays, business incubators are fostering innovative new ideas by providing those insights and more at little or no charge. They have truly changed the way tech entrepreneurs innovate and contribute to fast-growing knowledge economies around the world.
Canada isn’t alone in having leading innovation centres.
In the United Kingdom, Oxford Innovation serves as the parent organization for Britain’s innovation centres, providing office and lab space to more than 400 tech companies. The company also boasts three investment networks and provides a host of other business services
With its recent rich foray in technological innovation, it’s no surprise that the Chinese have taken a leading role in this area with the launch of the Shanghai Technology Innovation Centre, among others across their country. The government-funded incubator has six locations around Shanghai that help tech firms commercialize and export their products
Why have tech incubators taken off across the globe? Put simply, they provide tremendous value to the entrepreneurs who need it most. With that in mind, here are my top three reasons why tech start-ups should affiliate themselves with business incubators/innovation centres:
Critical cost savings: We estimate MaRS will save us $10,000-$20,000 per year. Where else can you obtain well-managed, prime downtown office space, Internet connectivity and telephone service as well as an array of business equipment such as photocopier, fax and scanner, for roughly half the cost of setting up a similar office in a major city? For a cash-strapped tech start-up, these painful but necessary monthly office expenses can bog down cash flow and derail a company’s development.
Access to key advisors and market insight: Innovation centres offer access to experienced, tech-savvy advisors who can help management teams navigate around any obstacles to their success while offering insight on important functions such as acquiring start-up capital, analyst reports and media training. In our case, MaRS offers free seminars on everything from elevator pitches to business plans, helping us refine our go-to-market strategy and providing timely, relevant insights.
Free access to research data: Many innovation centres offer free access to market research reports. We estimate that we will consume about $25,000-worth of these reports. The benefit of complimentary access is clear.