Why is the Incubation Centre failing? Why we are not able to remove Bottlenecks of Startups?

Well a few days back, Prabhakar Alok founded a very good post from Sanjeev Srivastwa’s Facebook wall. So, He Decided to merge these answers and people can read easily.

well..!! People came up with different opinions when the question arises.

Why there is a fall in the number of Incubation Centres?

Some of the opinions were as follows:-

•  Lack of Vision from founders ( Maybe not innovating/ adding value), Access to market, Ecosystem, Apathy of VCs, Infrastructure, and support from Govt/ Institution…
  Reason for failure may be many to succeed you just need determination and resilience.
• Institutions have failed to induct a scientific approach in people. In-fact present govt is spreading superstitions in society.
•  In Incubation centre capitalism at a high level. They treated startup-like beggars. When you go to the incubation centre they show all are very busy and no time for you.
• Greatest Solution is ‘ Lean Start-Up Model’.

• An Incubator should train a Startup entrepreneur to focus on early customers and early markets only and all the capital investments should be focused on this only. One can always scale up once the market expands and demands to pick up.
• In 95% of cases, one needs considerable time to stabilize. So why one should spend big till the right time comes. It always leaves one to have enough spare money in self-funded cases and least borrowed amounts thereby least debt servicing pressure in financed cases to go for corrective measures if anything goes wrong. Thereby resulting in lesser psychological pressure Startup entrepreneurs usually face during teething times.
• Due to financial inclusion and financial assistance. Startup needs a loan without collateral but your centre is not providing.

•  Poor Ecosystem for business is core bottleneck for startups.

1. Lack of adequate land or the cost of land rate is too high
2. The reluctant behaviour of banks in sanctioning loan.
3. Every vendor/supplier cheat entrepreneurs.
4. Red-tapism
5. Social Barriers

• Incubation centre must also focus to build community and create a bridge around another startup ecosystem.
• For any growing startup ecosystem aspirations and connectivity is mandatorily required.
  Community help to grow this exponentially. Currently, Bihar Startup Ecosystem is isolated from the other parts of the country & world. It needs to be brought together to learn to connect and grow together.

• When we talk about startups then two words come to mind. One is Scalability and the other is disruption. Basically, the term is associated with a single factor called Technology. This is where we are lacking. We don’t have the aspirations and network to think over disruptive technological solutions either in IoT (Internet of Things), Machine Learning, Data Sciences, Artificial Intelligence, blockchain etc. We also don’t have such startups here. Connectivity with another startup ecosystem can help to get aspired by the current demands and simultaneously learn with the smooth flow of the ecosystem across the world.
• There are no firm and good evaluation criteria for the Incubation Centre and Incubate. Selection is based on an arbitrary basis. Mostly, Incubate and Incubation centres are run by management person, very less involvement of technical expert( domain expert). How management person will evaluate the feasibility of technology-based startup?

• Firstly the most important reason for failing an Incubation centre is failing of startups. Now the big question is what is the connection between failing a startup with failing Incubation!? I have met many Incubators in and out of Bihar. The biggest problem with Incubation centres in Bihar is they don’t know what they are. What are their roles? How they can be helpful to startups. The reason behind it is the facilitators itself doesn’t understand the meaning of Startup or Entrepreneurship. Because they just got the authorization to be an Incubator so they are. And unable to support any startup as per their best of commitments.
  Another reason is Incubators are not having good access to skilled, required and proper resources. So once they don’t have resources they are helpless. If they are helpless to how they will help a startup.
  An Incubation should support and nurture a startup like a child. Mentoring, training, management and many more are the roles of any Incubation towards startups. They should help startups in every aspect of their journey. From the ideation phase to the maturity phase. But their resources are not enough to make an impact.
  Lastly, Incubation Centres are a startup as well. So they should think like a startup. What are the major factors Incubation is looking for to develop itself, they should provide all to startups.
  Networking is the key to success. Can make a great team together.
  In addition to the fact giving office space, electricity bill, tax benefits, and having a few networking sessions are not the only role of any Incubation which is currently happening in Town. I would suggest to all the Incubation as well as the government and the council focus more on the ground level. The child should study how to attend the class, in fact, I would say the child should know where he is going. Why he is going? what will be the future ifs and buts.!! The child should know all the challenges and benefits of school and that should be taught by parents. So here the child is a startup and their founders and parents are Incubation Centres.
• Actually, Incubation centres should be like the Gurukul education system. All the startups should be there for 24 hr without any disturbance. Why did all the successful startups start from a garage, a lab, a flat or a small dedicated space or store? It is because all the founders stay there for the day n night. They work, eat, drink, sleep and repeat. Great minds need space To Think | innovate | To Struct.
  So if the lodging system comes with Incubation then it will be great. (which I see a daydream in near future)
  Talking about gurus. They are out of the system. The actual GuruDronas are invisible and out of the system because of not have an interest in the conspiracy.

• Payment Services touched regulatory requirements and multiple permissions. It cannot be a play of StartUps. It requires huge investments over multiple crores of rupees and a lot of infrastructure to begin.
  BHIM and Paytm are not Startups. BHIM is one service belonging to NCPI which is a Joint Venture of the Reserve Bank of India and Indian Bankers Association (IBA) whereas Paytm is JV between an Indian entrepreneur and Jack Ma of Alibaba (China).
• One of the main reasons for most incubators to fail- They only concentrate on getting funding from investors rather than making startups Self Sustainability. If you wish, I have plans that could work out well. I m launching my own accelerator which would help startups acquire more clients rather than showcasing to Investors.

• Lack of Proper channels and information to reach the locals and young entrepreneurs, lack of faith, hustle way and long steps, lots of laws, no fast track system, lack of advertisement, more faith on other sources. Lack of social support because of unawareness among people.
• The solution can be from my point of view:-  Camps in colleges as the involvement of youth is important, advertisement preferably mouth to mouth and social channels, banks should promote and advertise in their area that creates faith among people that banks can help in their journey. A showcase of available markets and expansion of business inside and outside of the local community creates enthusiasm in an entrepreneur and in investors.
• Interesting – Actually half of the incubators don’t know why they exist. Why they started and what they are going to do with startups. it’s a mushrooming culture that kills the core interest of startups. Any incubation fails because of the hidden purpose. Also, the incubators fail because it is not run by successful entrepreneur and are opened by jerks who are seeing the government funds
• Centres are being run by people without desirable experience of the ecosystem, they are not failing, but it will take time before many of them turn profitable. Incubation is a serious business, right now it is being viewed as some sort of CSR activity.

• I really liked the way Nexus, and Delhi run incubation. They have a very intensive training of around 3 months, before offering long-term incubation. This helps start-ups understand the business better and help the incubation centre to weed out not-so-serious startups. Then, they provide a complete ecosystem of marketing, sales and as well as financial support.
  The problem with many incubation centres is Multi-fold. IIT is made an incubation centre for technology companies. Now think about, how a professor from IIT, who is already overburdened with technical know-how will help a business with finance and marketing. IIMs are good in later and not in former.
  Only when an incubation centre provides a complete ecosystem, they will be successful in producing awesome startups.
• These incubation centres are in all good sense a startup company ( venture) itself, they have their own bottleneck. First of all, they need to identify their own expertise rather than to handle all approaches. That would not only help them to establish in a particular sector, but it would be easier for any startup to approach or be incubated by the appropriate incubation centre. Only then these incubation centres can solve the purpose of resolving bottleneck hindrances faced by the startup in a particular sector.

• I had seen many incubation centres in the other state like Delhi, Uttar Pradesh, Andhra Pradesh, Karnataka, Kerala. They providing complete resource under one roof which is creating a real impact on the Entrepreneurs & Venture. In Bihar most of the Incubators they don’t care about Entrepreneurs. they only focus on how they can make money from that. If anyone asks them how many entrepreneurs have they created, they have no answer on this
• First of all, an Incubator should be in the role of Capacity Building and it should not have any fee. True or Untrue but I have reports, some incubator charges commission on the project value. One of the Startups who patented his innovation but not successful at a Patna based Incubator. One Startup from Alwar having two patented inventions applied to IIT, Kanpur for Incubators Certificate and paid Fee Rs.10000/-but failed. A game Rs.10000/- for a Start-up is not at all small.
• A few pointers:
  1. Incubators themselves have created goals which ask them to fail.
  2. Incubators think that they are “Ahsaan” by facilitating a startup.
  3. Moreover, Incubators themselves have zero experience in the industry they are selecting startups from.
  Tough is to solve this problem, the biggest point would be:
  – Incubators select startups based on the current buzzwords and not based on their own ecosystem n capabilities.
  – They shy away from their responsibility towards the startup they choose. Also, there is no association of Failure with their KPI (Key Performance Indicator)

Thanks, and please comment your thoughts on this topic ” Why are Incubation Centre failing? Why we are not able to remove the Bottlenecks of Startups? “

Prabhakar Alok