Stealth Incubator 2.0

from the here-they-come dept

Years ago, “startup incubators” were generally put together by local municipalities trying to attract new businesses to their downtown regions. They’d take a building and make it easier for startups to work there and share some resources (and, maybe, some knowledge). Then, in the last bubble, thanks to the likes of IdeaLab, CMGI and others, incubators became “big businesses” by themselves. However, one by one, each one stumbled, as people realized they weren’t businesses, really, but sort of VC corporations (sometimes) with some real estate for startups. However, in the last three months, I’ve heard way too many pitches from people talking about “Incubator 2.0.” It’s basically the same idea, but with the recognition that these new “2.0” startups can be churned out even faster than before, often with no business model and tossed up on the web to see what sticks. Silicon Beat is pointing to yet another one of these incubators that claims it plans to launch 15 companies in 36 months. To add to the buzz, the company is also in stealth. A stealth incubator? Definitely has bubble elements to it. If they just add that 2.0 (and maybe some Ajax and tags to their site), they’ll really be onto something. There’s obviously some appeal to the idea of trying a lot of stuff quickly and seeing what works — from the point of view of those inside these incubators. However, in just creating quick companies and tossing them up, are any really given enough attention to succeed? Building a business is more than just tossing an idea out there — and while accidental businesses often do emerge from simple ideas or side projects, betting an incubator on quick hit concepts seems risky.

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Comments on “Stealth Incubator 2.0”

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Joe Smith says:

Idea incubators

This type of model may be high risk but it is not necessarily doomed to fail.

It may make perfect sense for deep pocketed investors to create private sector think tanks staffed with eager young engineers and scientists employed for the sole purpose of generating patents.

The resulting patents could then be sold to patent licensing firms.

There is no need to incur the expense or risk of trying to develop and manufacture a viable product.

Joe Smith says:

Re: Re: Idea incubators

Not quite, but close. My point is that this business model would be legal and could make a profit – not that it would actually add anything to the wealth of the nation on balance and not that it should be legal.

The problems with NTP are:
1. the ideas patented by NTP were not original – the patents should never have been issued.
2. if the ideas were original, they were inevitable and obvious as soon as anyone turned their mind to the issue – that type of development should not be protected by patents but it appears it is.
3. there was no causative link between NTP’s ‘invention’ and RIM’s product – the NTP patents contributed nothing.
4. the use of injunctions gives a patent holding company, in business purely to licence patents the power to extract royalties out of all proportion to the true value of the patents, whether the patents are valid or not.

NTP managed to legally get $612.5 million for patents which should probably never have been issued. There is the possibility to make some serious money from just generating patents without ever even trying to develop products.

dorpus says:

Silicaust Valley

It looks like the idea of nerve testing for carpal tunnel syndrome hasn’t caught on in Silicon Valley? Some industries spend millions of dollars to test workers, so they can reject workers who show nerve abnormalities. Multiple Supreme Court rulings have backed the right of employers to do this. How come in pro-business, free-market Silicon Valley, this hasn’t caught on?

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