Incubators that nurture early stage companies through their development represent a highly effective form, perhaps the best form, of economic development for a community. While not corroborated by personal research, I’ve been told that Gainesville has more incubation capacity per capita than any other community in the country. If that is even near correct, Gainesville’s incubation effort is impressive. I personally know of five formal incubators in Gainesville and I suspect there are more that are less formal.
Having served in the past on the advisory board of one of Gainesville’s key incubators, I’ve directly observed several incubator executive directors at work. Given that incubating early stage companies involves an investment by either a community or host organization, having the most effective manager in place — a Power Manager — to guide those companies is key to whether economic development occurs.
While there are many desirable capabilities of incubator managers, there are five that I feel define the Power Manager.
TRAINING:
Organizing effective and needed training for resident companies is a direct contributor to the subsequent success of those companies. There is a lot that most startups don’t know. They need help with things like negotiating skills; intellectual property protection and violation consequences; setting up strategic partnerships; valuation of early stage companies; and structuring an effective board of advisers. The Power Manager knows how to organize and provide that training through networking in the business community to find subject experts and then connecting with these experts to get them to conduct training gratis.
MENTORING:
Again, the managers of most early stage companies know little about running a business. They have inflated egos, unrealistic expectations and generally think they are invincible. They need careful, focused mentoring to nurture them and help guide their ways. Mentoring comes in many forms, but the type provided by the Power Manager is not dictatorial nor does it provide all the right answers. Rather, it is the type where resident company managers actually think they are coming up with the ideas themselves.
RECRUITING:
Over time, some of the resident companies in any incubator will implode and go away while others will graduate into the local business community, no longer in need of the nurturing of the incubator. These spots will need to be repopulated with new residents. So, the Power Manager will pre-recruit prospects by networking within the local entrepreneurial ecosystem to be closely familiar with local startups popping up that have merit.
DRIVING DIVERSIFICATION:
The best incubators have a diverse resident population. One incubator I know has mostly companies with web apps and general aggregate information site ideas. They’re all pursuing the same business models. Therefore, the incubator environment is rather incestuous. There’s no diversity. They’re all doing the same thing, so the companies aren’t really able to help each other. An environment that features diversity embodies companies and managers who have different experiences, different capabilities and strengths and, therefore, a more robust capability to help each other. A Power Manager will force diversification through targeted recruitment.
PERFORMANCE AWARENESS:
Power Managers stay on top of how each resident company is progressing. The performance measurement metrics are not the same as those used for more established companies, like sales growth or profitability. Rather, the metrics might be more like the weekly number of prospective customer interviews, securing that first luminary customer, establishing a strategic partnership, completing a minimum viable product or establishing a working prototype. The incubator’s advisory board wants resident companies that are aggressive, learning and moving forward. A Power Manager recognizes this reality and keeps them closely informed with the right measures, which will impress the board.
So, if you are an executive director of an incubator, make certain to focus on these capabilities in conducting your job. If you are on an advisory board for an incubator or are contemplating starting another incubator, use these as metrics for evaluating your incubator manager or hiring a manager.
BILL ROSSI is Professor Emeritus of Entrepreneurship at the University of Florida, having taught in the graduate and undergraduate Entrepreneurship Program there for 15 years. Prior to teaching, Bill initially held several senior-level positions with Ford, Goodrich and Picker International. After relocating to Florida in 1986, Bill worked in executive management positions in smaller entrepreneurial companies and was a principal in several. Bill holds a Master of Science degree in operations research from the University of Massachusetts and an undergraduate degree in mechanical and industrial and systems engineering from Ohio University.