Coverage by Bhat Dittakavi of Variance.AI on “Incubation hubs” by Jay, Josh, Aliza and Deepa at GES on 30th November 2017
Aliza Inbal, Pears Program, Israel
Deepanwitha Chattopadhyay, IKP
Josh Mandell, Halcyon
Moderated by Jay Krishnan, T-HUBJay: Entrepreneurship is about grit. Rising the working capital means you need collateral. Keep in mind you got to go all in. This is a tough task on hand to work so hard and then when your cash runs low after funding, you have to reach and knock on many doors to stay afloat. That is precisely entrepreneurship.
Aliza: Do you fund an individual and not a team? No. You need people committed to an idea. You need lot of different types of people who make startup succeed. Unrealistic to expect one does it all. I look for a package.
Josh Mandell: Do you see this person as the one that takes advice and also knows to dispel an advice. We are in Washingtonm. Here thry fight the wars in day to join the rebellion at night. This is like a real world for needs that work together and founders collaborate daily.
At Halcyon we see lot of incubatees collaborate.
Deepanwita: How do you define success at Incubator? We have to encourage those with no business background but all science background. We have a lower bar at incubators where we have a look at really early stage ideas. Accelerators have higher bar rightfully so. Shatter the widespread notion that “Since there aren’t enough jobs in the market, you can become an entrepreneur”.
If you are into entrepreneurship, it is a 24×7 job. It is not a job where you have free time.
Josh: YCombinator is a fund. We made a conscious decision not to be for profit and we don’t take any equity. We don’t look at these incubatees on pure play ROI. We don’t want to miss out on that impact startup.
Jay: As an Incubator, we have evolved at our business model. Challenge of an Incubator is to find who are our stakeholders? Founders, government, donors and corporates and so on. We at THUB are not for profit. We are profitable but the money goes back to the system. We don’t take money from the government. If we take money from the government, we have to stick to their dictat. Goverment provides the capital for our infrastructure.
Deepa: We are not for profit. We are profitable as we have to practice what we preach. We really have to understand what makes an Incubator profitable. There are many goverment-funded academic incubators that may not be profitable. We know how to leverage on donor’s money. We run a large number of grant challenges. We select and scout for good ideas and get money from the government to fund them.
John: We work with city of Washington. I do think corporate partnerships are very critical for incubator’s success. I don’t care why an Amazon wants to partner with us. No startup can afford oversee research market analysis by a Delloite. We get them exactly that. Even support on patents. We really value corporate partnerships that don’t in any way create the business model for Halcyon or influence the kind of incubatees we bring in. We got a 230 year old mansion as a facility by a donor. Hence we don’t have infrastructure issues. We pipe all the donations for supporting the Startups. Founders collaborate with artists and creators as we have also art incubation. This is a great connect. I also see this being a model of future incubations.
Aliza: We don’t take any money. If we think like investors, we wouldn’t leave anything for the incubatees. I did Hackathon with Jay at four locations at the same time. Someone in Tel Aviv can Skype with someone in Bangalore and seek support. We had a 1000 people register and 4 locations and we announced a 5 lakh rupee prize. We are good at getting a lot of people to give free stuff for the sake of incubatees. We are communicating a vision for ecosystem we believe in. It enables us to do in away it makes it possible for Startup founders to succeed without taking a part of their flesh.
It is one thing that breaks the boundaries and walls then it is “Startup Nation”.
Q) When the relationship between entrepreneur and Incubator shall end?
Josh: They live at our facility at out facility and they get additional 15 months of space. We give them all kinds of facility with access to investor pool. The valve to go out to the world.
Q) Is it your duty to give the market know how to the entrepreneur? Is it right thing to tell them it is not the right timing?
Incubator can’t give that kind of support. We give advice on what kind of team they need to have. We give advice like you need a CFO. We don’t advise them on pivots.
We even perhaps forcibly, like a duckling, push a founder out. We don’t advise them on pivots.
Deepa: Monkey is on the back of entrepreneur and she has to make that decision of pivot. We are not even on their board.
Aliza: Yes it gets over. Truth is I feel like I am the mom of these dates up founders. I tend to think it is my startup. Our program caters to lower income markers and hence we see people constantly coming back. I see them as my children. I don’t say they have to stand on their own. This is in my Israeli world where we have a community where we have every Startup that knows everyone. We try to connect them with others. This could be similar in Iraq for different reason. The best startup in an island can’t succeed. You need that village where people say yes I know there is someone who can help you. This is a major part of what we do.
Josh: Active incubation a company versus building a community. We do both. We got a three member staff. We lack the capacity to provide services. Ww are looking for expanding from Washington to Hyderabad.
Einstein said “Everybody is a genius. Don’t try to reach a fish to climb a tree. Else, it thinks it is a stupid.”.
Q) How do you ensure incubators are diverse and accessible? People with disability.
Josh: Accessibility of a very old building is not in our hand. We designed such that incubatees are of different colors and many women. Social entrepreneurs have an edge it may represent women. 80% of the founders start something because they had a terrible experience.
We have an exceptionally diverse set of founders.
Jay: We have 1000 people and 156 Startups with a team of 40. 37% of our team are women. 15% are from rural. 30% are women CEOs.
Q) Where is the relation between established industries, educational institutes and incubators?
Jay: Did you RTFM when you walk in? RTFM: Read the fun loving manual. This is what my manager asked me once when I walked in years ago.