Guest Author, Ryan Lilly, Shares 10 Mistakes on Business Incubation
One of the most important things I encourage entrepreneurs to do is to learn from their mistakes. After “doing” business incubation now for 7 years in 3 states and working with just over 600 startups… I’ve made a lot of mistakes. And I still make new mistakes every day.
In the process, I’ve been lucky to see incubation from different vantage points. I’ve served entrepreneurs in an accelerator program, a manufacturing incubator, a commercial kitchen, and an office-style incubator focused on technology and healthcare innovation. I’ve worked in incubators operating under the umbrellas of a university, a municipal government, a non-profit, and now a Chamber/EDC type organization. In all of these cases, I’ve enjoyed my share of successes. But I’ve also fallen flat on my face from time-to-time.
I want to share with you 10 of the mistakes which have hurt (and ultimately benefited) me the most so far in my business incubation career…
1. Incubating entrepreneurs who don’t want to be coached.
During my first few meetings with an incubator applicant, I ask myself three questions:
- Are they innovative?
- Are they scalable?
- Are they coachable?
The first two criterion are usually easier for me to judge than the third, which often comes-down to a gut decision. Incubating an entrepreneur who doesn’t want to be coached will not only waste your time, but worse, the time of the mentors, investors, and others you introduce them to. By association, it could hurt your own reputation as well.
One of the hardest lessons I’ve learned in incubation is: “You can lead a horse to water, but you can’t make him drink.”
Make sure the entrepreneurs you incubate are the ones thirsty for feedback.
2. Doing an entrepreneur’s work for them.
There’s a fine line between showing someone the way and doing the work for them. I’m guilty of occasionally doing too much work for clients – work they should be doing themselves. One day I realized that by “doing their homework” I was only hurting their chances of success long-term.
“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”
Now I just focus on helping entrepreneurs learn to fish.
3. Talking more than listening.
When I was new at incubation, I was so anxious to tell people all of the ways we could help them. I would begin every meeting by rattling-off a list of programs and services, while the entrepreneur’s eyes would slowly glaze-over. After listening to a YouTube talk by Ernesto Sirolli, I decided to take his advice: “Shut up and listen.”
Now I try to listen to the specific needs an entrepreneur is having, then respond with only the things that are most relevant to them based on those needs. Rule of thumb: Listen to entrepreneurs 80% of the time. Talk 20% of the time.
4. Not being confident in my ability to help.
I’ve made the mistake of feeling like a failure because I wasn’t always ready with an answer to the problems entrepreneurs were having. One day I realized I don’t, can’t, and shouldn’t know everything there is to know about the companies I help incubate. I’ve come to realize the greatest value I can have as an incubation manager is not in having all the answers – but in helping our companies make connections to the experts.
5. Trying to lead rather than feed.
While I don’t agree with the entire book, Startup Communities by Bred Feld is definitely worth the read. One of the biggest points he makes about startup ecosystems is the need to understand the roles of “leaders and feeders.” Feld essentially says that entrepreneurs themselves need to be the leaders of the ecosystem… while everyone else (educational institutions, government, etc.) really fill the role of “feeders”.
Several times I’ve tried to “lead” an initiative where we really needed a local entrepreneur to carry the flag. As an incubator manager I realize my role is to provide the space, tools, connections, and encouragement – to feed and facilitate – but the entrepreneurs are the ones who most determine where all of this goes.
6. Not staying in recruitment mode.
I’ve made the critical mistake of getting an incubator to near full occupancy and then slacking on the recruitment of new applicants. Then I inevitably had a space become available, and I had to go-out and recruit again. That mistake has taught me to always keep the pipeline full. Even if I don’t have any available space right now, I keep getting-out there. The best programs have wait lists.
“Always be selling.” = “Always be recruiting.”
7. Not balancing policies with culture.
I once came-into an incubator with an energetic and fun start-up culture – but hardly any policies or best practices in-place. Someone described it as a frat house. So what did I do? I put a bunch of rules in place.
And the culture almost died. The incubator became a sterile office environment where the older professionals in the community enjoyed visiting, but the younger innovative startups were left feeling boxed-in and uninspired. There is definitely a balance to be struck between setting an appropriate number of guidelines and still having fun, creative environment for entrepreneurs to enjoy.
8. Taking incubator issues home with me.
Once I had an advisory committee member say something unkind. The biggest mistake I made was taking that home with me. I’ve made the same mistake with client issues too. I’ve had client companies teetering on the brink of going out-of-business, and that night at dinner I found myself telling my wife how concerned I was about them.
Then another incubation manager told me: “Pick a bush or tree at the door of the incubator, and mentally leave your problems there when you leave each day.”
That may sound like odd advice, but it’s worked for me. (Full disclosure: There’s a palm tree outside our building that gets a lot of verbal abuse every day at 5pm.)
9. Working so much “in” incubation that I didn’t take time to work “on” incubation.
I’ve made the mistake of becoming so ingrained in the day-to-day operations of our incubator that I’ve failed to step-back and look at the big picture – to evaluate our business model. In order to best serve entrepreneurs, we have to think entrepreneurially ourselves.
So now I make the time at least once a week to look at what results we’re getting from our programs and ask questions like, “How could we do this differently to add even more value to the entrepreneurs we’re trying to serve?” and “How can we keep innovating?”
10. Not giving back.
If I’m honest with myself, up until now the business incubation community has been a place I’ve come to take, not to give. I have benefited from consuming all of the great trainings, books, conferences, and tools – but what value am I creating for others just like me?
As a fellow InBIA member, I would encourage you to write a guest blog article. Contribute to a new publication. Mentor someone new or young to the incubation industry. Find a way to give back!
I hope at least 1 of these 10 mistakes was of value to you. More importantly I hope you will share some of the biggest mistakes of your own in the comments below, in service to the other incubation managers who can benefit from reading them.
Because as we all know, mistakes can be incredibly valuable.
About the Author: Ryan Lilly
There he serves as a catalyst for the creation, attraction and growth of startup companies at the Power Plant Business Incubator. He also enjoys speaking and writing about new ideas in economic development and entrepreneur support.
Visit here for more information on Ryan and view his TED Talk below.