Every other week, On Small Business reaches out to a panel of young entrepreneurs for answers to some of the most pressing questions facing small business owners. The following responses are provided by members of the Young Entrepreneur Council (YEC).
Q: Coworking spaces, incubators, accelerators: How should entrepreneurs determine if one of them is right for their business?
Charlie Gilkey, principal of Productive Flourishing in Portland, Oregon:
Two questions can help you make this determination: 1) Do we have enough of a product developed or service history to start talking about it? and 2) how distractible are we?
While these environments can be great for helping you figure out how to communicate the problem you’re solving and what your business does, you’ll benefit more if you have enough of a product or history within your business to talk substantively about. What you might build rarely pays the bills, so it’s better to talk about what you have built.
These environments can also distract you from what matters for your business by providing too many bright and shiny objects to chase. Many young businesses already have this problem, and being in an environment with so many ideas flowing through it can be especially hard for easily distractible creative visionaries.
If you’ve got enough to talk about and think that you can stay focused on completing the core offerings you’re taking to market -- and you can afford it -- the rich environment of counsel, referrals, fun, and creative inspiration can be a true difference-maker for your business.
Brent Beshore, CEO and owner of AdVentures in Columbia, Missouri:
The big question is: What do you need? All startups require space, capital, talent, mentorship and influence. Incubators, accelerators, and co-working spaces provide different mixes of each.
Incubators are rent-based and, oftentimes, offer complementary or discounted services. You’ll work around other entrepreneurs, but not necessarily co-work with them. Incubators usually have a focus (biotech, for instance), which allows them to add more value in that particular niche. Capital, mentorship and influence will vary greatly, depending on the people associated, so make sure you research the people running the incubator.
Co-working spaces tweak the incubator idea. They’re also rent-based, but rather than gain your own workspace, you’ll often work alongside people from other companies. There is usually more peer-to-peer mentorship and greater access to talent. Good co-working spaces tend to attract investors and mentors.
Being program-based and time-specific, accelerators are fundamentally different. Once accepted, you’ll cycle through a system designed to deliver necessary elements in a defined period of time. There is far more organization than with incubators or co-working spaces, but once you’ve graduated, it’s scaled back dramatically. Be careful, because while the top accelerators clearly add value (Y Combinator and TechStars in particular), many have not been proven.
Pablo Palatnik, CEO of ShadesDaddy.com in Aventura, Florida.
You’re choosing between two very different things when determining if an accelerator/incubator is right for you, versus a co-working space. Incubators and accelerators give you funding (and sometimes take equity) as well as coaching, mentors, advising, connections and more. Co-working spaces give you none of the above -- just a place to work where you can network with people and maybe gather some ideas...if you can find a co-working space in your industry.
Sometimes, the best place to start a young business is grow it from your apartment, house or dorm room -- wherever you can go to keep that overhead cost down until you’re ready for the next step. However, if you’re sure about your business, it’s good to get out of the ‘home’ space and actively be somewhere while starting up. (Juan Dulanto of ShadesDaddy.com also contributed to this response).
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.