For many years, Canadian entrepreneurs looked longingly to the United States, where a growing number of incubators supported and financed startups, including many that came into the fold as nothing more than ideas.
These incubators providef little or no money but plenty of non-financial support, such as office space, desks, education, mentorship, networking opportunities and help from a variety of advisers.
In recent months, however, a growing number of incubators have started to establish themselves in Canada. In a recent blog post, StartupNorth compiled a list of Toronto-based incubators, as well as co-working space that has been created.
Given the immaturity of many startups that participate in an incubator, they tend to be high-risk propositions. Since there isn’t a lot of money invested, incubators can boost their chances at success by running a lot of startups through the process.
The ones that show promise have a chance to get more support and/or capital. The incubators benefit from having equity stakes in a variety of startups.
One of the newest incubators is INcubes, which will soon launch with its first group of eight startups, which will go through a 12-week boot camp to prepare them for a demo day before investors.
I recently sat down with INcubes co-founder Traviss Corry to talk about why and how the Toronto-based incubator got started.
Q: What are the origins of INcubes? Why did you and your partner decide to start an incubator?
A: INcubes came from a realization by Ben Zlotnick that Toronto was without help for a certain kind of entrepreneurial team that does not fit into the moulds required by the existing institutionalized incubators. These entrepreneurs were outside the mould required to gain assistance. The need for a new kind of incubator in Toronto was obvious, and the startup community here is constantly complaining about it.
Ben and [I]were luckily working together on launching another startup when Ben came up with the idea for INcubes. We knew we could create a business model for a new kind of expertly run, private incubator that would give Canadian entrepreneurs the full toolkit they need to gain essential support. Ben worked some magic and gathered all the support we'd need for INcubes, and, within less than two months after the original discussion, we had a space in the heart of Canada's business district.
From all the applications we received, we narrowed it down to 40 face-to-face interviews. We have chosen only the most promising. We will announce eight startups for INtake 01.
Q: There seem to be a lot of incubators being launched. How is INcubes different?
A: Incubators are being started all over the world because they work to fulfill a need in the new economy. The new economy demands innovation, extreme flexibility and adaptability. The new economy needs a constant infusion of fast-growing businesses to answer constantly arising opportunities and new niches created by the intense pace of digital innovation.
Internet business is like no market that has ever existed in that it crosses borders so easily, and that its rate of change is at a speed that no industry has ever experienced.
That, in a nutshell, is the startup phenomena, and this is what incubators create. INcubes is a factory that intakes the resource of talented entrepreneurs, and produces innovative startup businesses.
INcubes is different than other incubators by the social sphere in which we work, and in the kind of companies we are capable of launching.
INcubes companies are of a unique personality. INcubes startups are headed by wild visionaries but backed, guided, mentored and qualified by orthodox and respected planning and research bodies, as well as individual third-party and impartial expert analysts.
Q: How does the INcubes model work? What do you provide entrepreneurs and startups that participate in the program?
A: INcubes provides a structured but open and collaborative three-month curriculum to its startups. This curriculum's major elements are custom-designed for every startup by experts who have successfully completed related efforts.
The curriculum starts with the custom creation of a “road map”. Two major points on the road map exist.
The first is demo day at the end of the three months, when the startups pitch their completed plans to investors.
The second is the companies' long-term goal, which exists years in the future.
Along this road map, milestones are created, which are tasks needed to complete before reaching the next milestone. Each milestone is then assessed by INcubes business mentorship, and the optimum experts are brought in to assist the startup plan how to complete each milestone.
Each milestone can also include in-depth research, or third-party qualification. It's this qualification that is INcubes’ trademark process. All these qualifying steps, applied to the plans of creative and experimental Internet entrepreneurs, create a road map in which otherwise dangerous ventures, become quite safe, even low-risk.
Q: What's the business model? Do you charge your portfolio companies fees?
A: The INcubes business model is quite simple really. INcubes does not turn a profit at its startups’ expense. INcubes covers all the costs of incubation and fronts the capital for many services from legal, to office space. INcubes becomes a minor but supportive partner on a long-term basis through sharing equity in each of its startups. INcubes’ business model is a long-term partnership with each of its companies.
Q: How do you select the companies to join the portfolio? How many companies will be accepted? Is there a particular sector focus?
A: The startup is put through a grinder by many experts, who evaluate success of a planned venture. For INtake 01, we are accepting eight startups. INcubes’ sector focus is on startups that have their business model tightly integrated with a digital application. The company must be based on the technology application itself. These companies can have their business models integrated into things like mobile apps, business-to-business platforms, information systems, data visualization, etc.
Special to The Globe and Mail
Mark Evans is the principal with ME Consulting, a communications and marketing strategic consultancy that works with startups and fast-growing companies to create compelling and effective messaging to drive their sales and marketing activities. Mark has worked with four startups – Blanketware, b5Media, PlanetEye and Sysomos. He was a technology reporter for more than a decade with The Globe and Mail, Bloomberg News and the Financial Post. Mark is also one of the co-organizers of the mesh, meshmarketing and meshwest conferences.
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