Incubator and Accelerator: What are the Differences?
In the entrepreneurial universe, the term business incubators is already well known. However, there are different solutions beyond incubation to support new businesses. After all, companies with different stages and goals need support in different ways. Accelerators offer support based on a different model of need, focused, as the name implies, on the potential for speed growth.
FoodFutureCo is a perfect example of a scale-up accelerator focusing on small but established companies offering food of the future solutions. This article will look at the main differences between the business support models:
|They support small businesses according to some governmental or regional need. They can help, for example, a telecommunications business in a state that needs expansion in this area.||They are not focused on a prior need but on companies that have the potential to grow very fast. Precisely for this reason, accelerators look for scalable startups (and not just a promising small company)|
|Need a more structured business plan to gain public support||They bet more on a good idea without the need for so much bureaucracy|
|Led by managers with experience in mediating public authorities, universities, and companies||Are managed by experienced entrepreneurs or investors
|They are based on the traditional model of consultation||They are organized with mentoring sessions (either in lectures or conversations between entrepreneur and mentor).|
Which model is suitable for your company?
To choose the ideal model for your company, start by evaluating your business goals. In general, if your startup is looking for radical innovation or a scalable and repeatable business model, look for an accelerator. But if your business model is more based on traditional economics, it is likely that the ideal is to look for an incubator. Companies with different stages and goals need support in different ways.
Regardless of which of the two you choose, the important thing is to know that this type of support can bring significant insights to your business, as well as investments and expansion possibilities.
Business incubator: Be surrounded by successful entrepreneurs
The real strength of an incubator is the coaches who are made available to help. When you start entrepreneurship, making mistakes or having a certain fear of taking risks is easy. This is why an incubator offers mentoring or coaching workshops to help young entrepreneurs better understand their future market.
Some incubators have successful entrepreneurs who will support young shoots. With this process, those who have already succeeded in entrepreneurship will help those who are starting out by telling them what to do and what not to do.
The feedback from the entrepreneurs of the incubator will provide the incubatee or future entrepreneur with a better understanding of this environment to succeed more easily. Connecting with coaches specializing in business creation and investors remains the most important point.
Accelerator: Increase your growth exponentially
In reality, unless the accelerator is made up of bad coaches or entrepreneurs, it’s almost impossible not to profit from it. A start-up that is accompanied by accelerator benefits from the experience of entrepreneurs who have already worked with former companies to reach the stage or the amount of turnover that the start-up wishes to reach.
The advice disclosed by the members of the accelerator will naturally increase the capacities of young entrepreneurs. In particular, to increase margins thanks to marketing techniques but also to reduce production costs, for example. Using an accelerator also allows you to aim further to develop your offer, access international markets, and increase your turnover.
Obviously, an accelerator will help a young start-up develop its ability to face future challenges and better identify customer needs. This ecosystem is clearly a huge benefit for a start-up that seeks to develop rapidly while continuing to seek financing.