A regular college guy going through the rigours of engineering was travelling, when he stumbled upon a word he did not know the meaning of. He had a basic phone with no Internet connectivity, and then it struck him: why can’t there be an SMS based search engine? He got together with his friends, discussed, deliberated and they were convinced that an SMS based search engine indeed made sense. Elsewhere, as a part of their college project during the placement season, two friends got together to set up a forum to conduct mock interviews, which made it easier to filter right candidates. Its effectiveness got them thinking and they realised that it had a potential of being used by big companies to select right candidates.
The former went on to become the extremely successful startup SMSGyan, launched by Innoz and co-founded by four students from LBS College of Engineering, Kerala – Deepak Ravindran, Abhinav Sree, Ashwin Nath and Mohd. Hisamuddin. Today, it answers more than 2 million queries a day and more than 10 million users have availed of the service across India. While the latter is none other than InterviewStreet.com co-founded by engineers Vivek Ravisankar and Harishankaran K. Its roster includes companies like Zynga, Facebook, Amazon and even NASA. Earlier this year, the services of InterviewStreet.com were also sought by the US Government.
While both undoubtedly are great business ideas, their founders believe they wouldn’t have achieved half of what they have, if it were not for belief, support and mentorship that they received from the respective business accelerator they were a part of. So what exactly are these accelerators and incubators? What’s at stake and how do they help? We find out.
Centre for Innovation Incubation and Entrepreneurship, IIM, Ahmedabad, is one of the premiere incubation centres in the country
Incubator or Accelerator?
Since both Incubators and Accelerators offer almost the similar eco-system for startups to encourage business ideas with potential, they are often confused together. There is, however, a subtle difference between the two. Incubators are more traditional, usually funded by government, hosted by educational institutions and offer long term support. They incubate all kinds of startups be it technological, engineering or even scientific; they also encourage social entrepreneurial projects and each may have an area of focus. On the other hand, accelerators are relatively newer phenomenon and are usually run by people who have been through the rigmarole of startup and thus, offer mentorship to budding entrepreneurs. Accelerator programs are usually of a shorter duration and may not offer physical incubation space. They tend to favour technological startup that leverages Internet, cloud and mobile. However, many of the traditional incubators have also started offering short-term accelerator programs.
Why to incubate?
Many times, you have an excellent business idea. You may even start working on it and create a prototype, but you run into some problem and then you just give up on it all together. Or at times, it’s possible that you lose interest. Then probably few years down the line, you may come across a successful business that was just what you had thought about. How you wish then that had you pursued your idea a little longer, it could have been you. Well, that’s just what an incubation centre or an accelerator will help you do – focus and hone your idea into a successful startup. If they see that your idea has potential, then they will offer you work space, initial funds and technical support. They will connect you with a mentor and also help you raise funds by connecting you with VCs, angel investors, private investors etc. Once you find space in their program, then you can focus on fine-tuning and developing your idea, as you discuss and get insights from other teams as well as mentors. And if you stumble along the way, then rest assured that you will have a lot of helping hands. They will also offer you help with things like business model, marketing, IP issues etc. However, in return for all the support and mentoring that they offer, they will claim an equity stake in your business.
One of the benefits is the mentorship sessions, which will immensely add to your knowledge. A session under way at The Startup Centre
Are they necessary? There is no rule that says you have to be a part of an incubator or an accelerator in order to be a successful entrepreneur. And there are enough startups out there that have made a mark on their own. However, the eco-system that they provide is something that will ensure your idea finds its full potential. As Vivek Ravisankar co-founder of InterviewStreet.com says, the biggest way in which being a part of the program at The Morpheus helped them was in making decisions. He says, “It was a fantastic experience. When we started, we had no idea what a startup was all about and Morpheus helped us in understanding the business side of startups. I don’t think we would have achieved the same success, had it not been for the support we received there.” InterviewStreet also went on to become the first Indian startup to be incubated by US based accelerator Y Combinator, which is no mean feat.