For those who had asked about how incubation centres work, I believe the comments in the previous post would have helped.

To summarize, an incubation centre supports an entrepreneur with an active advisory panel, infrastructure and with some financial assistance to help them jumpstart the process. That’s pretty much the gist of the matter.

As a commentor in the previous post mentioned, the system has a flaw.

For one, the entrepreneurs in an incubation cell are quite shielded from any immediate danger. The protection and support, sometimes even turns a great potential company into a mediocre one. Without being hungry, and being foolish, entrepreneurship seems to die out from its essence of radical pathbreaking.

The second aspect is that the value proposition that an incubation centre brings into an entrepreneurs life is that, they have a panel of advisors to help groom these entrepreneurs. These advisors are quite some experts in very specialized verticals – say marketing, HR, Scaling, Technology, Investment etc, and provide their inputs to mold the company into a solid one.

I believe a company that comes from an incubation centre is very much limited by its mentors. Most of the time, the mentors are chosen not to experiment with radically new and different business models, but to execute a well-trodden one in the life-cycle of a new company. What usually ends up is a newer and smaller version of their own company that they might have built or have been part of.

This always seems to be the case, with most incubation centres.

The issues seem to be a few:

1. Limited by Mentors
2. Over-Protected from the necessary tribulations that an entrepreneur and team require to harden and survive
3. Isolated Infrastructure
4. Highly biased focus: Either too much technology focus, or too business oriented, since all incubation centres are academic centric
5. Lack of being grounded in the reality of what the customer wants (some Incubation centres deal with this quite well)

These are the basic ones to start with.

I do like what the Y Combinator and CRV Quickstart guys are doing. Also with the recent addition of Obvious, (the guys behind tweeter) to the list, its possible that the next successful incubation model will follow suit along these lines. With Yahoo! hiring seasoned entrepreneurs to run their internal incubation centre, there is a pattern that we are starting to see emerge here.

More on that in the upcoming post…