Not Sure If Your Startup Is Ready For An Incubator – Take These 3 Tests
Why you first need to prove product/market fit
While incubators and accelerators have helped develop and support many up-and-coming startups, including Barclays Africa Fintech Accelerator Programme (Wizzpass), Alphacode (Yoco), Shanduka Black Umbrellas (Moshate Media) and Seed Academy (SweepSouth) among others, "In reality, not every business is ready or ideal for incubation," says Mags Ponnan, Head of the Business Incubator and Customer Value Propositions at FNB.
Those that stand the best chance of success are the ones that are ready, says Ponnan.
"We have a lot of businesses that want to get into incubators long before they have tested their products in the market, but the reality is that incubators are not a classroom. They exist to propel businesses from one stage to another along the business lifecycle. In as much as there are early stages incubators, the businesses that get the most out of incubation are those that have been stress tested their business model and shown their customers’ appetite in the market space," says Ponnan.
"Stress testing an idea ensures that you save a lot of money and time in the long run, it also ensures that you maximize any assistance there is to get from an incubator," adds Ponnan.
Find out if your are ready for the next level - Here are 3 stress tests you need to complete BEFORE you apply.
1. Define The Identity, Vision And Strategy Of The Business - This is the earliest stage of the business, where the entrepreneur will need to define the goals of the business and the strategy of the business going forward. This will also determine the identity that the business will project to its potential customers.
2. Validate Your Business Model – The entrepreneur can stress test his business model through a pilot by gauging how well his customers receives his proposed product or service. This will assist the entrepreneur with finding the right product and market fit.
3. Implement The Tested Business Model – This is usually the trickiest part of a startup where the entrepreneur will start selling his product/service to the market and will focus on the operational aspects of his business such as revenue generation through sales, recruiting the right team, etc.