Incubators in the new economy

Abstract

In recent years, and especially during the past six to nine months, the number of new for-profit high-technology incubators has increased dramatically. Incubators in the New Economy are seen as organizations that can address the unique demands required to create today's successful new ventures: speed-to-market, synergy and network, talent cultivation, and strategic cohesiveness. This study looks at this phenomenon and explores the incubator's operating models and organizational forms, focusing specifically on the value-proposition, sustainability, and scalability factor, with a side analysis of vertically- focused incubators in the wireless-telecommunications space. The analysis consists of business articles and a total of more than 80 in-depth interviews with incubator founders, venture capitalists, New Economy analysts, New Economy visionaries, entrepreneurs, investors both public and private, and telecommunications executives. Overall, the industry is new and "hot." A handful of incubators provide obvious value while many others may not provide as much value but are changing to meet the needs of the market. Investors should watch for the effects of Darwinian Theory of Entrepreneurs and plan measures to counter them. As with any type of new industry or business, there are numerous pitfalis. NOTE: I'm now working on an extended version of this study that will cover more incubators, more venture capitalists' comments, as well as those from others in the industry, and provide my comments on other related and topical business issues. Please signup on the email list at the http://chin.mmhoon.comlinc11hator website to be notified when this new extended version is available.