Taking a turn at nurturing businesses in The Cribb

Typically, Growth Driven incubators will accept about five per cent of applications.

HI-TRAC: The author's shorthand for Happiness Index, Infrastructure, Talent, Regulations, Access and Capital. The six pillars that make UAE a great place for a startup. This week, the focus is on Infrastructure.
Nesta is a UK-based innovation charity with a mission to help people and organisations bring great ideas to life. Their February 2015 study on Startup Support Programmes called What's The Difference indicated that successful accelerators and incubators are the ones that have a clear commercial model. The three types of commercial models are Growth Driven, Fee Driven and Independent.
The Growth Driven model is a highly selective and possibly the most successful one. Typically, only a few startups that come to the accelerator are selected. And these usually get funded in return for a revenue share or a stake in the business.
This is important to understand because AngelList (angel.co) reckons that there are close to 4,300 incubators alone. Therefore, associating with the right incubators and accelerators is a strategically important decision for startup ventures. When this information is reviewed against statistics on the number of startups, it becomes clear that the matching process requires careful thinking and process.
Typically, Growth Driven incubators will accept about five per cent of applications. Of these, less than half will achieve commercial break-even. Hence, not all startups selected will be funded. Some will purely get mentoring and networking. Others will get investments from associated angels or venture capital companies.
To help bring the concepts into focus, it's important to distinguish between accelerators and incubators. Accelerators are more focused on serving as a bridge between third-party startups and third-party investors. They usually manage a portfolio of startups on behalf of a few large investors. In return, they take a small stake or ownership in the startups. Incubators on the other hand, usually grow businesses themselves and then seek out both management expertise and funding when the innovation idea reaches a level of maturity. A typical example of an accelerator would be Y-Combinator. An incubator would be an entity like Idealab.
Closer home, a visit to The Cribb and Turn8 in Al Quoz brings these concepts to reality. Abdulrahman Abdi is the high-energy person that you usually meet there. That is not a surprise. Talking to him, you get to know the extent of the operation. Over 1,000 startups have experienced The Cribb's incubation facility. It is always abuzz with teams working late into the night, fuelled by excellent coffee, an open work environment and an obviously competitive atmosphere. Some of the names that are associated with the incubator and the accelerator are LoadMe, Kashmi, PixelBug, Paack, AirGo and Bridg.
Turn8 is the corporate venture arm of DP World. It evolved into a venture capital firm after several successful rounds of investing. Through Turn8, selected startups for funding go through accelerator rounds.
The Cribb's model is different from the Fund. It came into being as the incubator associated with Turn8. The Cribb caters to both startups and corporates. On the one hand, it helps startups grow and on the other, it enables large corporations to tap into disruptive ideas through Corporate Venture Capital.
Yousif AlMutawa is the managing director of Turn8. Kamal Hassan is the founder of The Cribb.
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The Startup Checklist: 25 Steps to a Scalable, High-Growth Business by David S. Rose and a foreword by Bill Gross of IdeaLab is a practical guide to starting a business. IdeaLab has been around since 1996 and is considered by many to be the model incubator. It's not about strategy but about execution. It is also not aimed at the entrepreneur who is thinking small. It is meant to get the startup venture thinking about scale, human resource factors, legal areas and all the other facets relating to high-growth, highly scalable businesses.
The writer is a director at Vyashara. He's a digital banking and digital financial services evangelist, practitioner, advisor and consultant. Views expressed are his own and do not reflect the newspaper's policy. He can be reached at ves@vyashara.com.