By Sunil Shekhawat
The advent of incubation centres, where ideas are nurtured into minimum viable products (MVPs) and prototypes, witnessed a significant turn with the 2010 governmental shift in India, drawing inspiration from Western models. This paved the way for the ‘Startup India’ initiative. The government, besides offering grants to technical universities and institutes for establishing incubators, also envisaged a financial backbone for startups with promising prospects. This approach was geared towards translating ideas and research into commercialisable entities through expert mentorship and financial backing.
Fast forward to the present, India boasts the third largest startup ecosystem globally. The emphasis now veers towards evolving the grant model to instill more financial accountability amongst stakeholders. The transition entails reducing grant dependency and urging incubators to adopt sustainable, entrepreneurial models, much akin to a startup’s operational blueprint.
The idea, although seemingly daunting to many incubation centres, is not without precedent. A handful of established incubators have already showcased the potential of profitability or significant grant independence.
The discourse now leans towards viewing incubation from a business lens — where the university board is the startup, the management and incubator board are the founders, and the government plays the role of the angel investor. The overarching aim is to foster a self-sustainable incubation landscape that can thrive even with delayed revenue streams, a notion somewhat at odds with the growing lobby against self-funded incubation centers.
Several pragmatic alterations can be made to bolster the existing incubation framework:
Retaining startups post their initial growth phase within the incubation premises could be a win-win. As startups evolve, their ability to pay for services improves, and incubators can extend their service portfolio to cater to these enterprises.
Striking a balance in financial expectations is crucial to avoid alienating startups. Overcharging fledgling entities could backfire, tarnishing the incubator’s reputation.
Encouraging partnerships between thriving alumni startups and academic entities for joint research & development could unveil new revenue streams for incubation centres.
Leveraging promotional tech credits and services offered by tech giants could also benefit the incubator, establishing a long-term revenue model.
Implementing these strategies necessitates a robust technological infrastructure to manage and execute complex processes. The writing is on the wall; incubation centres lacking a solid business model are likely to fade away. Now is the opportune moment for incubator management to experiment with proven or near-successful models to ensure long-term sustainability and contribute effectively to the startup ecosystem’s vitality.
The writer is CEO and founder, SanchiConnect (a fund-raising platform for deeptech startups)