Startup Communities: Building an Entrepreneurial Ecosystem in Your City

ACCELERATORS ARE DIFFERENT THAN INCUBATORS

As the mentor-driven accelerator phenomenon has spread across the world, many organizations have started calling themselves accelerators even if they share few characteristics in common with TechStars. This is predictable, especially since we’ve been extremely open about everything related to TechStars, including our structure, how we operate, and our results.

However, one particular type of organization, the “business incubator,” has recently started to be relabeled as an accelerator. Incubators have been around for a long time, with the first known incubator, the Batavia Industrial Center, having been created in 1959. Although incubators share some characteristics with accelerators, they are significantly different, and they play a different role than accelerators in the long-term health of a startup community.

Incubators were originally created to foster economic development. They provided entrepreneurs space, infrastructure, and advice in exchange for a fee, which was occasionally partially paid in equity. Incubators are typically nonprofit entities or attached to a university. Although some for-profit incubators have emerged, most are an extension of an existing investor’s activity and are often linked to the Internet bubble.

Incubators operate year round and continuously. They focus on providing infrastructure and exist to fill up their space with paying customers. This often ends up creating a least common denominator effect rather ...