28 October 2018
You’ve probably heard the buzzword ‘incubator’ bounced around for a while now. Often in conjunction with terms like ‘startup, ‘entrepreneurship’ or ‘venture capitalist’. Yet, you’re still not quite sure what it entails. If that’s you, then you’ve come to the right place. Fortunately, we’re here to break down what exactly a business incubator is and how you can benefit from the many ways it can add value.
Traditionally speaking, an incubator is a device used to culture organisms, mostly commonly eggs. Yes, eggs – the kind you eat for breakfast. An incubator provides the optimal conditions (temperature, atmosphere and environment) to successfully cultivate living entities, allowing them to successfully grow and thrive.
A business incubator functions the same way. It is, in essence, an organization that aids in the establishment and initial running of new business ventures, providing them with the right environment, resources and opportunities to succeed. Just like a living thing, a business too requires the proper conditions to flourish.
So how exactly do business incubators do this? Essentially, incubators are tasked to aid early-stage companies in their developmental phases until such company is ready to run independently without further support. An incubator fast-tracks this whole process by providing these fledging companies with a diverse range of integrated support services.
One way to look at a business incubator is as a ‘one-stop-shop’ for startups. They can provide a wide range of resources for entrepreneurs, including but not limited to:
- A Physical Work Space: New business ventures often lack the capital to invest in an office space. Fledgling startups vary in size, but tend to be small. At inception they are sometimes even a one-man-operation. Incubators can allow you to save the money and hassle it takes to acquire an office and instead provide you with a dynamic and creative ‘hub’, full of other entrepreneurs and like-minded individuals. Incubators seek to create an environment that fosters innovation and allows companies involved to learn from each other and share resources.
- Shared Services: Incubators also help by providing basic business services, such as administrative services, production equipment expenses, supplies and general office services (internet, Wi-Fi, printing, telephone services, etc.). The beginning of a business venture is a critical period and seed capital is a resource that needs to be used wisely and prudently, shared services help reduce overhead and operational costs for all businesses involved during this time.
- Information: A strong foundation is necessary for any business to succeed. Access to research and industry information can be costly and require significant time and manpower. Incubators have these resources readily available through strategic partnerships with government agencies, local universities, and a well-established and wide-reaching business network. Having the right resources can be pivotal in the initial stages of business development.
- Funding: Having a great idea is one thing, but having the necessary funding to execute that idea is a whole other story. Coming up with the money independently or finding investors are both extremely stressful and time consuming. Incubators can connect businesses with a network of reputable Venture Capitalists. In fact, many incubators even offer seed funding. Many household name companies we know today such as Dropbox, ClassPass and Reddit, would not have been as successful if it were not for the funding support received from incubator programs in their initial stages.
The bottom line is that business incubators can be extremely beneficial for new businesses. They can make or break a startup’s success. Incubators are growing increasingly popular around the world, with the GCC being no exception. The growing popularity of startups in the Dubai has helped to foster a greater culture of innovation and creativity. Unbox Inc. hopes to contribute to the ecosystem and provide entrepreneurs and startups with the right kind of support to succeed.