As entrepreneurs continue to gain popularity, a question is raised as to the quality of different support services and programs that are being offered. Every day seems to reveal a new incubator, accelerator, co-working space or boot camp. Are these really helping? Are they worth the price that is being charged?
Most of the programs offer the entrepreneur a space to work. This certainly beats working out of the garage or the basement. In some programs, the entrepreneur gains no more than the opportunity to work in close (and sometimes very close) proximity to another entrepreneur. This is like buying a house and being told that because it is so small that it is easier to clean. Some programs claim that proximity will result in “serendipitous” interactions that will speed success. If this metric is true, I should have better luck standing on the 16th Street Mall of Denver and simply talking to everyone that goes by.
Many programs offer consultation. Some of these program formalize the giving of advice through a mentorship program, where an entrepreneur (the mentee) is matched with a person who is supposedly older and wiser. This usually is a form of free advice that competes with service providers that charge a fee for the same service. However, just because a person is older does not necessarily make them wiser. This is particularly true with regard to entrepreneurship. Too many programs match an entrepreneur with an individual who comes from a larger business and who has never started a business of their own. The scarce resource world of an entrepreneur is very unlike that of a large business. In addition, many mentor programs are stretched for volunteers to help, thus reducing the human resource pool and contributing to secondary problems such as personality conflicts. The state of Colorado would benefit from the creation of a high-quality mentoring program in which all organizations could share mentors and track their performance.
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Some programs offer “access to capital”. This usually is translated to mean that someone with money may pass through the building at some time in the future. This carrot is too often dangled as a reason to pay higher-than-normal rents for no more than the use of a cubicle and Wi-Fi access to the Internet.
Some programs focus on capital. Entrepreneurs are given an opportunity to pitch their opportunities. The focus is almost always on angel investors without consideration to any of the other sources of capital that may be easier to obtain at a lower price of money. These programs seldom publish the success rate of their entrepreneurs in raising money. When information is made available, too often the program claims the success of the entrepreneur as their own work whether they made any real contribution. An entrepreneur would probably be more excited if the programs were more about “receiving capital” and less about “pitching” for capital.
New entrepreneurs are particularly susceptible to programs that charge fees with little or no certainty of value. Not having the experience of being scammed, rookie entrepreneurs may dive into a program and pay fees for little more than an inspirational speech. Although every entrepreneur can use a kind word, paying someone to tell them that success is inevitable borders or even crosses over to fraud.
There are a number of programs out there that are a demonstration of high quality. These include the virtual program of the Cleantech Open — a yearly boot-camp competition for innovators seeking to improve the environment — and the bricks and mortar of the Innosphere in Fort Collins, which continues to successfully convert ideas into products and services. Both of these programs have identified a segment of the entrepreneur marketplace and work to provide those entrepreneurs with the tools needed for success. These programs are holistic, providing a comprehensive variety of services and facilities with lots of one-on-one and one-on-many educational presentations.
Starting a business is hard work, and programs that seek to support entrepreneurs must work even harder.
Contact Karl Dakin of Dakin Capital Services LLC at 720-296-0372 or email@example.com.