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Business incubation needs a re-think

Blogs 18/05/2017

By Allon Raiz, Chief Executive Officer, Raizcorp


A little more than 12 years ago I read an article about 981 “entrepreneurs” who had been through a brief new venture creation programme. According to the journalist’s investigation, not one of these would-be entrepreneurs who had been in that programme was in existence a year later. The journalist lamented that despite the obvious evidence that these high volume, low quality programmes were ineffectual, they were nevertheless prolific, wasting hundreds of millions of dollars every year.

Twelve years ago, incubation as a way to promote entrepreneurship was only beginning to appear in any significant manner in the developing world. Unfortunately, in my opinion, the incubation industry inherited a few philosophical approaches from the training industry that have plagued the industry ever since.

Myth 1  Anyone can be an entrepreneur.

The first philosophical approach the incubation industry inherited from the training industry was the notion that anyone could become an entrepreneur. The concept of skills development without any consideration of human character (psychological makeup) was an extension of the training mindset. In the training industry, hundreds of thousands of people (if not millions) are put through training “programmes” each year with the basic change theory of “they didn’t know how, then we train them, then they do know how.” Unfortunately, that change model does not translate well in the incubation space, even if the model includes practical learning-by-doing training. The model presupposes an “entrepreneurs are made” view of the world, where all individuals are seen as raw input into a process, knowledge is added and an entrepreneur is produced.

My experience is that this is a false assumption. Entrepreneurs are neither born nor made, they precipitate (See Blog). For entrepreneurs to precipitate, the right set of entrepreneurial characteristics and environmental conditions needs to be present. Incubation might provide some of those conditions, but basic entrepreneurial characteristics need to be present as well. Simply putting anyone and everyone through a new venture creation programme, without considering their appropriateness for becoming an entrepreneur (and not just a survivalist) is, in my opinion, a waste of time and resources.

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