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The Business of Incubation

Entrepreneurship is not something one gets into by accident - it happens by design and is normally part of the mental and emotional make-up of a person. It involves finding the best possible opportunities that exist and then making those work to your advantage. Today, what started as a small enterprise in Batavia, New York, has grown into a global network of incubators, accelerators and hubs that offer a world (quite literally) of opportunity to the enterprising innovator. Today business dreams can become business realities because the world is waking up to the economic and social benefits this area of enterprise offers.

I have started over 12 companies and it was not always a success story. In Latin America, failure means paying with personal assets and entrepreneurial mistakes can be costly and the road to recovery, tough.

Getting involved with business incubation and accelerators was a natural progression from being an entrepreneur and one of the first questions I asked myself was why incubators and accelerators did not consider themselves as actual businesses or companies.

In Chile, despite strong government support, one does not see a steady stream of successes and it's easy enough to see why this is the case. The rules are not well defined, and the goals are unclear - and those that exist are not particularly well-defined or well-communicated.

And so with our accelerator, IncubaUC, we tried a different approach. Rather than relying on funding, we decided to think of ourselves as an 'enterprise' and our entrepreneurs as 'clients'. We studied the 'personas' we were aiming to bring into the fold and then we created a strategy that would help us attract these high-level entrepreneurs. Research showed us that there were three kinds of entrepreneurs that we wanted to identify:

a)      university students,

b)      professionals with experience in the market,

c)       high- level researchers with an entrepreneurial spirit

The three types are very different from each other, with a different set of goals and motivations and consequently it might well be assumed they would require different kinds of support and services. We were surprised however, when we found out that they needed the same spectrum of resources from an institution such as ours.

Research got fairly serious at this point and after some commercial validation, we visited different incubators in Spain, USA, China and spoke to hundreds of people from around the world to arrive at our final set of conclusions. Once again the results from the three different entrepreneur types s

  1. space is not as important as we thought it was

  2. good entrepreneurs don’t look for financial support as their primary priority

  3. good entrepreneurs look for networks

  4. good mentors are the most important asset that an incubator / accelerator will have

  5. Chile is a small market so to succeed one must 'grab the world'


Based on this, we realised, that in order to attract the best entrepreneurs that were out there being 'sexy' was more important that having access to funds. People pick accelerators / incubators not because of the monetary opportunities, but because they come across as the place where standards are set and goals are achieved.

The result of all this soul-searching was the creation of a new model, one that attracted the best entrepreneurs from all over the country and they came to us based on our mentors, network capabilities and financial support. Our programmes are based on the assumption (read that as fact) that with a small amount of money (USD 20,000 to USD 40,000) and in a short period of time (three to four months) we can help our entrepreneurs get to a point of commercial and technical validation that is strong enough to understand the various factors at play; if there’s an opportunity in the global market, how big it is and how to build on it as soon as possible.

Our programmes are global, since our start-ups are encouraged to think globally from the very beginning. Our companies only spend up to three months working inside Chile and while they are there the work is fast-paced and intensive involving a 24/7 interaction with their assigned mentors from IncubaUC. After that, depending of the kind of company it is, we spend a month in other countries like the Silicon Valley / San Francisco, USA; Madrid, Spain; Israel or China, validating the commercial and technical hypothesis the entrepreneurs have with local mentors and investors there, and that are part of our international network. At the end of the first phase of the programme the entrepreneur has a better understanding of the market pain, how big a “pain killer” he has access to or that is needed, and of course, if the opportunity is big enough to devote the next 20 years of his life to. On the surface, this sounds simplistic, but getting from the point of finding the right entrepreneur to testing a new international market - the road is long and arduous and requires a commitment and passion from everyone involved.

Some come back home disappointed (but with new ideas!), some with clients and some with an investment. Of the latter two, the Chilean government, through CORFO, (Corporación de Fomento de la Producción de Chile) provides further grants from USD 100,000 to USD 320,000 in order to ensure that the business grow and thrive.

So far we have been pleased with our methodologies and the results they have borne. We have raised eight times the money given by the government to the companies we support, from local angel investors, family offices and Venture Capitals. To put a number to the claim, in a year and half we have raised more than USD 10 million - no minor feat.

The programmes that we are currently running (from IT start-ups to hi-tech businesses) are attracting entrepreneurs from all over the region, with an increasing amount of interest coming in from outside Chilean borders. Our strategies have proven themselves to be sound and therefore IncubaUC model is an interesting model, well worth emulating, it would seem, as the strategies can be applied both nationally and internationally. Certainly our presumption that the best mentors or investors are the ones that have seen it all from the ground up and those that realize that in helping others, they help themselves.




Production Development Corporation (CORFO) (full name in Spanish: Corporación de Fomento de la Producción de Chile) is a Chilean governmental organization that was founded in 1939, by President Pedro Aguirre Cerda, to promote economic growth in Chile. Since its inception CORFO has played a significant role in expanding the country’s economic development by promoting investment, innovation, business and cluster development, coupled with a focus on quality and productivity.

Originally, CORFO was responsible for the creation of basic industries during the Presidential Republic Era, namely oil, power, steel,sugar, transportation among many others.

CORFO oversees a variety of programs aimed at generating the economic development of Chile, through the promotion of inward investment and the advocacy of competitiveness for domestic companies. CORFO’s main areas are Quality and Productivity, Innovation and Investment Promotion.

Information ref: http://en.wikipedia.org/wiki/CORFO






Marcelo Diaz Bowen is a Chilean agronomist specialized in engineering with a global knowledge in international trading and leadership. He has developed and implemented segmentation of global, corporate, public and education sector sales teams, resulting in 12 times the revenue and unit growth of the overall market. He has had extensive experience directing and growing profit organizations. He has supported more than 150 start-ups and small companies with innovative technologies to raise funds in the excess of USD 25 million, and helped internationalize their businesses and license their IPs. He has also designed and implemented international soft landing programs with top accelerators in the Silicon Valley USA, Madrid Spain and Changzhou China.
Published on 14-10-2012 12:31 by David Tee. 1048 page views

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