It's a truism of entrepreneurship that the road to riches is full of at least as many lows as highs. That’s why many entrepreneurs don’t take the leap until they meet the right partner to jump into business with. This isn’t just about co-founders having complementary skills; the support of a business partner can be invaluable. For better or worse, it is often the difference between giving up and persevering.
This need for support goes beyond picking the right partner, however. Like hippies congregating in communes, entrepreneurs often have a natural affinity with each other. And as hippies are drawn to ashrams, entrepreneurs can increasingly find like-minded risk-takers in workspaces, incubators and accelerators — potentially benefiting from being part of a community of individuals with similar ambitions.
Over recent years, business centres have been given a serious upgrade, with spaces consciously constructed to encourage the mixture of people and ideas. With modern workspaces, you’re not just paying for the square footage and amenities, but also the connections you’ll form with other entrepreneurs. Club Workspace, for example, runs targeted events designed to inform and educate its communities alongside all the usual support you would expect.
The term incubator dates back to 1956 when American Joseph Mancuso opened up the Batavia Industrial Center to a number of businesses. The companies in residence included a chicken processor, with the newly-hatched chicks running about the place inspiring Mancuso to come up with the term. The line between a workspace (particularly the better ones) and an incubator is tough to draw, but they are distinct propositions. Crucially, incubators are more explicitly focused on the growth of their resident businesses.
The line between incubators and accelerators is equally hard to define. A good working distinction is that accelerators tend to be more competitive to enter, offer investment in exchange for equity, have a cohort of businesses with a shorter timeframe of residency, and feature a demo day where entrepreneurs can pitch for further investment. Beyond these core features, every accelerator has a bespoke format and varying levels of support.
As with many of the best innovations, accelerators come from the US, with YCombinator and TechStars generally accepted as the gold standards. Seedcamp came to London in 2007 but since then accelerators have proliferated. Besides Seedcamp, Springboard and Accelerator Academy are the best known.
Although most accelerators have a heavy tech bias given the potential for speed and scalability, many are now focusing on a niche sectors of the economy. For example, Level39 is all about fintech entrepreneurs; Distill Ventures focuses on alcohol startups; Front Row I/O looks for fashion tech businesses; The Bakery welcomes advertising startups; and Healthbox is for entrepreneurs who want to disrupt healthcare.
NO FREE LUNCH
There is no such thing as a free lunch – someone has to pay for the space, network, mentorship and capital. This price normally comes by giving equity away. There is no hard and fast rule on whether and when this is the right decision, so it is worth entrepreneurs digging as deep as possible into the specific accelerator before applying. Despite the potential benefits, it’s not always the right decision.
But this doesn’t mean entrepreneurs should ever go it completely alone. Although a powerful image, the hardened, lone entrepreneur fiercely battling competitors is the exception rather than the rule. With workspaces, incubators and accelerators, there is a growing market for advice, mentoring and collaboration. The entrepreneur working out of a shed at the bottom of the garden should be a thing of the past.
Philip Salter is director of The Entrepreneurs Network. tenentrepreneurs.org