Many people spend their lives hoping for that “IT” moment, that light bulb moment when they conceive a groundbreaking business idea of portentous magnitude. Some are lucky enough to come up with a scalable business idea but upon entering the startup arena, they end up being overwhelmed by the various processes involved in turning new startup ventures into successful businesses.
For new entrepreneurs looking to successfully launch their tech startups, treading the startup arena is a little daunting. They find themselves exposed to completely new business jargons as different people try to give advice on how best to go about it. Words like Angel investors, Accelerators, crowdsourcing, venture capital and business incubators are very likely to be used.
So, after years of waiting, you finally come up with a viable business idea, formulated a business plan, you are fairly confident you have covered the basics and want to introduce it to the world. There is however one problem, you have insufficient capital. What do you do next?
New entrepreneurs with substantial savings stowed away usually take a leap of faith and finance their startups with their savings while the rest embark vigorously on the grueling task of getting financial assistance to get their startups up and running. This usually entails soliciting funding from Angel investors, venture capitalists, banks, relatives and friends or through crowd funding.
Unfortunately, these bold actions almost always end up being fruitless endeavors as many of the entrepreneurs lack a proper understanding of their business landscape or the inner workings of their startups, enough to impress potential investors – as in the case with some of the entrepreneurs on the KCB LIons Den program. So how do you ensure your startup business model is full-proof and well groomed to become valuable in the eyes of investors? Simple, you join a business incubator.
A business incubator is typically an organization designed to accelerate the growth and success of new entrepreneurial companies through an array of business support resources and services that could include physical space, capital, coaching, mentorship and networking connections.
Some entrepreneurs may use ‘business accelerator’ and ‘business incubator’ interchangeably as synonyms but that’s just a common misconception. Both programs may provide guidance to startups, as well as advance their business models and strategies, however key differences exist in their selection and investment processes.
Why a business incubator program is ideal for your new startup venture
- A business incubator supports the startups entering the beginning stages of building their company. Usually startup ventures possess new ideas to bring to the marketplace, but no business model and direction to transition from an innovative idea to reality. Incubators help entrepreneurs formulate viable models capable of growing into profitable businesses.
- Unlike accelerators which operate on a set timeframe -usually three to four months, a business Incubator operates on an open-ended timeline allowing entrepreneurs more time to work on their startups. Generally incubators focus more on the longevity of a startup and less concerned with how quickly a company grows. Incubators can mentor startups for more than a year and a half.
- One of the main responsibilities of a business incubator is to create jobs or find ways to license new intellectual property. This is why they invest their time and resources into advancing local startups because new startups are a conduit to accomplish both objectives. They have less pressure to deliver startups that can grow fast making unlike accelerators, which them ideal for even a slow growing or less scalable startup businesses.
Tech business incubators you can choose from in Kenya
The Kenyan startup ecosystem is one of the most established on the continent. It is a generally acknowledged fact that Kenya is still the epicenter of East Africa’s tech startup scene. The five top tech business incubators for new startups in Kenya are;
Nailab: Nailab is a business incubator that provides tech entrepreneurs with business advice, technical training and support, professional mentoring and coaching, access to market and strategic partnerships as well as investors.
iHub: Founded in 2010 by Erik Hersman. iHub is an innovation hub, hacker space and technological collaboration facility in Nairobi that aims to bring together entrepreneurs, mobile software programmers, and tech designers.
The Entrepreneurs Hub: The Entrepreneurs hub is a knowledge hub supporting entrepreneurs with know-how on how to start and grow a sustainable business.
Business Incubation Association of Kenya: This membership organization supports micro, small and medium businesses. It also promotes advancement of entrepreneurship through business incubation as well as providing partnership, sharing, and mentoring among its members. It also enhances enterprises in rural and urban areas through workshops organized to champion and enhance business practices.
iBiz Africa: Is a Kenyan based business incubator that aims to provide a nurturing environment for the youth, to enhance their involvement in developing ICT solutions and business. iBiz Africa provides access to facilities such space, incubation, financial support, mentorship, business coaching and opportunity to pitch business ideas.