Bootstrapping an Incubation Program
Before you can build an incubation program within your company, in addition to great ideas, you will need at least two things: Buy-in from stakeholders across the company and enough funding to be successful. Incubating new businesses is not something you
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7 Bootstrapping an Incubation Program Leveraging Existing Resources to Accelerate Your Accelerator “Don’t loaf and invite inspiration; light out after it with a club.” —Jack London, American novelist (1876–1916) Before you can build an incubation program within your company, in addition to great ideas, you will need at least two things: Buy-in from stakeholders across the company and enough funding to be successful. Incubating new businesses is not something you can rush—there are no quick wins. This means the commitment you get must be sustained for a long enough period of time to build demonstrable value from your incubation program before you lose the hearts and minds of your executives. These two fundamental requirements are intertwined. You will need buy-in to get funding and you will need funding before the broader company will be willing to buy in. In other words, you need to bootstrap the program. © CA 2019 G. Watt and H. Abrams, Lean Entrepreneurship, https://doi.org/10.1007/978-1-4842-3942-1_7
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Chapter 7 | Bootstrapping an Incubation Program
Getting Buy-In Incubation will operate differently than the product development going on in established parts of your company’s business. The incubation teams will take shortcuts around unnecessary process and the sheer pace of innovation will be disruptive to the slower parts of the business. While getting top-down commitment is critical to stay incubating for years, to even get started you will need to get buy-in from a fairly substantial and broad set of stakeholders across your company—many of whom you may not initially think to consider. To accomplish this, you will need to be able to use the learnings from Chapter 6 to explain the value and importance of your new program, but at the same time, set realistic expectations. Incubation can take longer and be more chaotic than the work done within the established business, with a low likelihood of any given individual incubation being successful. Once you set those expectations and can acquire and sustain buy-in from across the company, these individuals can become your biggest fans and allies—paving the way for you to accelerate your program and leverage the true potential of the established portions of your company to its advantage.
Setting Realistic Expectations There will be a large percentage of your company that will hear the term “internal startups” and envision instant Silicon Valley style billion-dollar unicorns1. In reality, venture capital firms that invest in startups take on a lot of risk. They know going into these investments that there is a good chance that many of their individual investments will not yield any return. Of course, more risk means their investors will require more return. Straight-forward financial math can show this feast or famine investing results in the need for these firms to look for one-to-two thousand percent returns on each investment just to stay in business. There is a great explanation of why this is in blog post by venture capitalist Jerry Yang. In the post, he sho
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