Are there too many incubators?

I was at the final ceremony of the Entrepreneurship for Society ceremony in the Hague when the head of the minor announced the creation of a new incubator at Leiden University to continue supporting  new ideas, a very exciting endeavor ..but then I thought to myself ” aren’t there are more people writing about, interviewing, thinking on and/or supporting entrepreneurs than entrepreneurs themselves? How do we know whether they are really helping?”. In short, are there too many incubators? A valid question, as it is becoming a sexy project to be around for everyone one (e.g “expert”).  Incubators are popping up everywhere, however you call them: accelerator, “labs”…  I do understand the seducing part of it ( as I am definitely seduced myself) : giving space, facilities and support for high potential “change-makers”, enabling them and “empowering” them to make their ideas happen, create jobs and attract capital.

It is very appealing also to donors and local authorities: decision makers LOVE to consider a concrete proposal on entrepreneurship and innovation. Measures to develop the “ecosystem” ( a contact at Endeavour confessed that he is fed-up with this word), e.g  better administration, infrastructure, bankruptcy laws and access to finance are, at the opposite, more complicated, longer term, less rewarding and hard to assess. Who does not prefer having an accelerator running within three months with some new (quasi)companies in the making already?
It is also much more fun for the promoter : connecting entrepreneurs, trainers, experts and helping mix up the sauce, while also taking partial credits for the success of the hosted start-ups. I am sure, however, that it should not be always easy to source solid entrepreneurs who are able to pay the fees, to work hard on their business, to show enhanced value AND to attract more investment out of their incubator or accelerator. The latter is definitely THE KPI for any serious incubator. A successful one should indeed be very selective, while also ensuring enough businesses are getting in to break-even: good businesses get investments, and bring better start-ups to the incubator, and so goes the virtual circle every decent promoter wants to reach…But I am getting sidetracked here, as the main questions remains: how successful are those incubators, especially in those low income countries that are hungry for jobs and successful businesses? How many are currently financially sustainable? Are they really helping get better and stronger businesses?
Although it is always hard to check (as there is no control group),  someone is looking at this issue already (of course..), as I learned after my meeting with Randell Kempner: a report is being finalized that gives a clearer picture on the impact of those incubators in developing countries. Keep tuned on the Entrepreneurship Acceleration Research Initiative here


Comments 1

  • Is this maybe not a chicken-and-egg problem? Can we ask “Are there too many startups?” and what are the implications of that question?

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