Startup founders looking to start off on the right foot often turn to a startup accelerator or startup incubators for help. The terms “accelerator” and “incubator” are often assumed to be synonyms or represent same meaning. However, there are a few key distinctions that first-time founders should be aware of if they are planning on signing up.
Accelerators and incubators both offer entrepreneurs good opportunities early on. Founders get help to quickly grow their business and they often better their chances of attracting a top VC firm to invest in their startup at a later point. Still, the programs are different frameworks for startup success. Let’s start by breaking down the goals of each of these types of programs. Accelerators “accelerate” growth of an existing company, while incubators “incubate” disruptive ideas with the hope of building out a business model and company. So, accelerators focus on scaling a business while incubators are often more focused on innovation.
An incubator is generally a concentrated workspace that includes any number of startup companies. Incubators provide experienced mentors and professionals to guide each company toward their own business goals.
These goals can be anything from finding capital investments to searching for a company’s own workspace. This should not imply that all companies at an incubator are at an early stage. Some companies enter with little venture capital while others come well-funded. Business incubators differ from research and technology parks in their dedication to startup and early-stage companies. Research and technology parks, on the other hand, tend to be large-scale projects that house everything from corporate, government or university labs to very small companies.
Startup incubators begin with companies that may be earlier in the process and they do not operate on a set schedule. If an accelerator is a greenhouse for young plants to get the optimal conditions to grow, an incubator matches quality seeds with the best soil for sprouting and growth.
While there are some independent incubators, they can also be sponsored or run by VC firms, government entities, and major corporations, among others. Some incubators have an application process, but others only work with companies and ideas that they come in contact with through trusted partners.
Accelerators are very similar to incubators but are more goals oriented and strictly structured. Accelerators typically support early-stage startups with a small amount of seed capital in order to kick start their operations.
In exchange for the support and service, an accelerator generally requires a percentage of equity within each company. Startups get involved with accelerators through an extremely competitive application process. From there, an accelerator then sets goals to be achieved, provides workspace and mentors, and expedites the growth. This is all done along the lines of a structured operational plan and only takes place within the course of 3 to 4 months. The main values within utilizing an accelerator are similar to incubators: they both provide mentoring and guidance services, workspaces, and networking opportunities. Accelerators, however, focus more on networking with venture capitalists, angel investors, and already-established corporate CEOs. The entire process within an accelerator ends with a “demo day” where a startup pitches its ideas to an investor audience in order to acquire major funding and further growth.
With Pakistan’s population expected to reach 210 million by 2020, experts term the world’s sixth most populous country as a perfect place for startups to launch their businesses, says the World Startup Report, a Silicon Valley-based organization. Today the entrepreneurial eco-system of Pakistan is at peak. With the collective mindset changing and an increased interest to test the entrepreneurial ground, we can expect to see exciting times ahead. We can see a visible increase in the success rate of startups and some of the best ideas coming out at this time; this industry is set to start making its mark on the global map.
It should be noted that this rapid growth happened in 6 years of time. Prior to the growth, one could count the startups operating on their fingertips. Today, however, we see startup success stories coming out of every corner of the nation. A country that had little awareness about entrepreneurship as a branch is now pushing out more and more innovations and aspiring entrepreneurs. This growth in entrepreneurship industry can be credited to some players of the industry who have set the foundation for future growth that is to come.
It is time to acknowledge the heroes who have positively impacted this industry for the better and to give them their due as well as celebrate their contribution to an industry that is set to pave way for more opportunities.
In a recently released report which was named Pakistan Startup Report, the organization reveals the potential the Pakistani market has.
According to the report, 136.5m mobile phone users 110m were likely to subscribe to 3G/4G by 2019, with the issuance of a license for the third and fourth generation network in the country and the services’ increasing popularity among users.
The report also quoted 12,500 Pakistanis working in the Silicon Valley, providing their skills to technological advancements taking place across the globe.
The report quoted that educational institutes such as Lahore University of Management Sciences (LUMS) and Institute of Business Administration (IBA) prepare their students to become entrepreneurs.
The report also states that the Punjab IT Board (PITB) is pioneering in entrepreneurship, m-governance, and e-governance by empowering workers with smartphones.
The PITB is using custom apps to report the water levels in canals and monitor the spread of diseases. Utilizing robot calls and SMS messaging, the PITB has also implemented a Citizen Feedback Model as a proactive measure to curb corruption, improve service levels and customer engagement, the report adds.
Oliver Samwer of Rocket Internet says that “building a business in Pakistan is like Germany, but only 20 percent more difficult. But we are in it to do whatever it takes, if we have to build a Pakistani Post, we build a Pakistani Post.” Recently, online classified sections have begun to face competition with the entry of Schibested in the local market to challenge Nasper’s OLX.
“There is competition in the eCommerce sector; however this is still primarily limited to the electronics market. For most players to make a dent in this market they will have to enter with significant funds,” the report stated.
The report also advises foreign companies to have reasonable expectations as the market in Pakistan is still growing. It also reminds foreign companies that there is no intermediate liability protection, meaning Pakistan has no cybercrime laws at the moment. However, a cybercrime bill awaits approval by the parliament and a cyber crime agency is supposed to be established shortly.
“Pakistan will grow, the only uncertainty is the speed at which it does,” the report concluded.
Plan9’s contribution in this regard
Plan9 is Pakistan’s largest technology incubator. Just like an ‘incubator’, they provide an environment that is conducive to entrepreneurship and business development. In short, they are a catalyst for new businesses and help early stage tech startups grow and thrive into successful and self-sustainable businesses.
Plan9 does not provide financial funding to the startups. As an incubated startup, you get the opportunity to pitch to Plan9 Angel Investors Club and seek angel investment. They also connect you to other potential investors.
Plan9 provides immense networking opportunities:
- Access to mentors and industry experts
- Access to investors
- Opportunity to attend international conferences
With all the report, it appears that Pakistan is going far in trade and we hope the best for our country’s progress and success.