How to teach innovation and entrepreneurship at a university & how to encourage new projects or business creation among students

This is a practical how-to guide for decision makers within universities wishing to encourage entrepreneurial activity among the students, provide practical learning opportunities and create an environment where new projects, initiatives and businesses can happen. It is a compilation of best practices from 15+ years of experience in the innovation sector and work with several dozen institutions from around the world. It includes everything from setting up dedicated entrepreneurship courses to activities that allow those studying non-business fields obtain skills and knowledge necessary to come up with and execute on novel projects. It is meant as a framework that every learning institution can use to encourage innovation and creativity.

It is really great to see how universities around the world have embraced modern educational approaches and are trying to complement their efforts in research and teaching foundational theoretical knowledge with courses that challenge students to put the knowledge they learn into practice. Nowadays it is a given that schools must spend time on conveying skills necessary for success in the job market and in the unpredictable world of the future. Indeed, most are now offering some form of entrepreneurial education and capstone projects - but these efforts are still at the early stages.

Over the last two decades, nearly every university considered creating an in-house innovation lab, experimented with design thinking, studio education and similar approaches. A lot of funding has been dedicated to these initiatives, but the results vary. Sadly, the vast majority are not achieving the desired effects.

In this guide, I am hoping to present a case for what makes an entrepreneurship/project based learning program within a university effective and propose a playbook of activities that should be implemented in any university, both those with a business specialisation and those focusing on other fields. My hope is not only to encourage universities to focus on helping ambitious students create new companies, but also to propose a way to systematically teach the “soft” skills needed for a successful career in any field.

About the author:

I am a professor of the practice in Entrepreneurship. I did most of my research in the field of Applied Imagination, which is a “flavour” of the more publicised Design Thinking methodology and I wrote a thesis on the subject at Central Saint Martins, University of Arts London. I have spent the last 15 years working as a lecturer and facilitator at universities, business accelerators and high schools around the world. I am best known as a curriculum designer and program manager who launched one of the biggest entrepreneurship and creativity incubators for youth in Europe that helped over 10.000 students start their first “real” project - either in the fields of business, creative industries, social impact or innovation. One of the courses I created was turned into a prime-time reality show that follows journeys of creators turning their ideas into products sold in real supermarkets all across the country. That has been syndicated to 4 countries and directly resulted in over 1.500 new businesses. I consulted for national entrepreneurship authorities, helped set up business incubators and managed all kinds of projects aimed at encouraging the youth to be more entrepreneurial. This guide is a distillation of lessons I learned along the way.

I feel that as educators we must find a way to teach the next generation how to be able to take full advantage of the knowledge they get in their university classrooms - they need to be given the skills, tools and knowledge to turn any idea into a working solution. Only if this is done, can we expect to create a world where the next generation will not be bound by circumstance, because the students will be able to find opportunities and take advantage of them.

I hope the guide you are reading will be a contribution to this goal.

The difficulties of encouraging entrepreneurial thinking in the University

Education is not easy, and perhaps in recent years, it has only gotten more difficult. There are a number of challenges that we must acknowledge openly and understand, before we may be bold enough to offer solutions. They fall into four broad categories. First, there are the uniquely contemporary problems we face across the entire education space, connected with the changing world, new technologies and new media platforms changing the way students think. Second, we still do not have a definitive methodology for teaching students how to be “creative” and come up with new ideas. Third, the changing world is forcing educators to focus on teaching the key skillsets of the students, and it is yet to be seen if the institutions we work in are able to handle this. And fourth, the context of the times we live in which results in the general apathy post-covid, the increase in pessimism due to global crises means it is more difficult to motivate students.

On the current problems of education

Teachers all over the world are saying how much their jobs have gotten more and more difficult recently. Schools are always lagging behind the progress seen in the world, that is just the way the system works. When a new concept is established, it takes time before the curricula include it, and longer still before teachers bring it into the classroom. Universities are no exception to this. Nowadays, with the exponential progress of technology, this has become apparent to everyone, particularly the students and the parents. Everything we teach is on the internet. Our society has become more and more litigious and the public at large does not see teachers as unquestionable authorities anymore. This results in more complaints, which leads to less ambitious teaching, more documentation to cover for potential mistakes, and ultimately a defensive approach in course design and classroom instruction across the entire system. It is far easier to provide a set of questions students need to know the answers to, and then test for correct answers than to challenge students to come up with their own solutions - and be in a position to defend themselves if some grade is under dispute. All this has resulted in the lowering of the standards in academia with the average teacher demanding less from the students now than before, particularly when we consider topics which would be most ideally taught through practical assignments, creative projects and students’ self exploration. It is important to acknowledge this as an objective problem and that doing things “outside the box” is not as easy as it perhaps was some decades ago. This is not the fault of the teacher, who should not be criticised for not trying to be overly ambitious. That being said, there are still opportunities for innovative teaching, they just need to be taken advantage of in the right situations.

On the lack of a methodology for teaching idea generation

Teaching students to come up with new ideas for products, projects or services is still a very new challenge. This is not like mathematics or physical engineering, where we have had centuries of practitioners coming up with innovations and those had time to trickle into the classrooms. Only for the last couple of decades have we had a realistic expectation that a wide segment of the general population can attempt to try create something novel and have an actual chance of it succeeding. Because this is so new, methodologies to create new things are still being created, and only a select few of them have found their way into the lecture halls of universities. Consider the question of how to start a business as one such example of a skill not fully understood in academia yet. First real companies were created in the age of the bourgeoise, just before the Industrial Revolution. The only people who could create innovation were the feudal lords and the wealthiest merchants (or people directly employed by them). Back then, there was practically zero competition as the limiting factor was the lack of capital to set up a manufacturing line. So the key thing to know about starting something completely new was financial and operational planning, not marketing or sales. As long as there were enough people who could afford it, if you build it, they will come. This influenced the new discipline of managerial economics which naturally focused on business planning, financial projections and operational management - and still does to this day within MBA programs. But now we live in a completely different world, and these programs do not teach students how to be creative. They are excellent to learn how to take something that already works, improve it and scale it “from one to a million” but they don’t teach you how to go “from zero to one.” The actual birth of a workable methodology that teaches new venture creation happened extremely recently. A number of successful founders in the Silicon Valley started to compare notes on how to take full advantage of the rise of the internet and rapidly launch companies and they realised we now live in a world where for the first time in history, it is easier to build something, than to sell something. So naturally, the focus of this new discipline of entrepreneurship should be how to figure out what should be built and what are the most optimal early steps to get to sustainability. And as launching something in the age of the internet is extremely cheap and very quick, the basic approach is to test, before you invest. This was definitively codified for the first time with the launch of Eric Ries’ book “The Lean Startup” in 2005. The lean approach, which is a translation of the scientific method to the business world, branched out in a number of frameworks who have all had their share of the limelight. We saw Rapid prototyping in the tech world, Human-centered design in services creation, Design thinking in product innovation, and many more. However, while these worked exceptionally well in their respective industries mostly close to the startup world, they are all too complex or too specific to be directly applicable to the much more basic challenge of a solo creator trying to launch a tiny new thing. Nobody so far has successfully translated these methodologies to be applicable in the context of an individual creator. Even worse, these methodologies have received so much hype that there are numerous “expert facilitators” who believe they are definitive solutions to everything. So what ends up happening is whole generations of students filling out frameworks, canvases, activities and use all kinds of tools but still do not understand and accept the basic idea: if you want to build something useful, you must be able to find out what people want or need, and then come up with a way to get paid for it. A central part of this guide is dedicated to proposing a concrete methodology that addresses this problem directly. In brief, this is something that can only be taught through practice, and is learned after having enough experience. Imagination and creativity are closer to art than science, and preparing students to be good at them is closer to training a sport than to academic instruction. In my opinion, it is only a matter of time before it will be recognised as a separate academic discipline with a fully codified and generally accepted methodology, but we are not quite there yet.

On the need to teach skills, applicable to the job market

Nobody needs to be reminded today that academia does not do enough to teach practical skills, or that classrooms in 2024 still look eerily similar to classrooms of 1824. Dissatisfaction with the education system is growing on all sides. The biggest problem, in my opinion, is that if you ask employers, they will say they often need to spend years to train new university graduates to get them ready for the job they were hired to do. The distance between theoretical knowledge and its’ practical application has grown rapidly and caused a heated debate. One side argues, absolutely correctly, that universities are the only place where a broad theoretical knowledge can be gained and there is a lot of value in this. However, the need to teach practical skills for the future, like the ability to apply the knowledge learned, communication skills, adaptability and teamwork are also correct. Students are dissatisfied and disengaged when they need to learn things they perceive as absolutely unnecessary, prompting anger among academics supporting the ideal of broad general knowledge, who then accuse the students of laziness or apathy. This argument is counterproductive. In fact, both academic theory and practical application are equally important - and not acknowledging this is the true source of the problem. Course syllabi and curriculum standards are not brought up to date with the present, not because of a lack of vision or wanting, but simply because any debate about them devolves into a political discussion with any resolution taking years, when we are too late again and have to start all over. The best way to overcome this gridlock is to work within the existing system. It is probably bordering on the impossible to change every single lesson plan for every academic subject, but it might not be that hard to complement the existing study programs with courses that expect students to use knowledge learned in core subjects and apply it in a practical way to create entrepreneurial projects. Job market skills, communication, the ability to sell one’s ideas, project work and new venture creation all have a place among the courses offered at the university level and need to be offered along side them as electives. Just like universities have noticed the need to train business operators and launched MBA programs, which are constructed as a complement for domain experts in other fields seeking business administration expertise, nowadays a similar step should be made towards creating departments focusing on new venture creation and applied imagination. These should also teach basic skills for the start of any endeavour, like writing persuasive emails, cover letters and CV’s, sales practices or managing small, unpaid teams (just like MBA programs focus on running large operations). Perhaps at present such departments will mostly be organised informally, but in the future, I can easily imagine accredited MsX (?) degree programs for students who are domain experts and innovators in their respective fields, and wish to learn to also become competent in execution of new ideas.

On the context of the present

Lastly, as educators we must acknowledge that optimism for the future has decreased significantly over the recent decades. The generations enrolled at University today have lived through at least one paradigm shift with the social media revolution, a pandemic that exposed the inability for the world to organise itself to deal with it, a growing number of natural disasters resulting from climate change that every authority figure in the world prefers to ignore, the purchasing power of wages decreasing every year and a new war starting every couple of months. Whenever someone tries to tackle any of these problems, they are outshouted by all kinds of political extremists from all sides before any significant progress can be made. Expertise is ignored in the flood of instant made-for-10-second-scrolling opinions. Books are being banned from libraries again while students are still getting shot in their classrooms. No wonder the young generation is suffering an unprecedented mental health crisis. At the very basic level, we must start by honestly acknowledging these problems without embellishments, because ignoring the challenges of the present will just teach the next generation we have our heads in the sand, and we will continue to lose our credibility as educators and authority figures. An honest apology on behalf of our generation to theirs might be in order as well. Then, while it might sound impossible, the only solution to feeling powerless is to learn how to take power into your own hands. Practical courses, training the skills for the future, teaching how to come up with new projects and empowering students to be in control of their circumstances, even if only so they are able to launch a small local project and help themselves and a few others around them, is the only direct solution that we have at the moment. When top-down solutions are hard to achieve, a better approach is to learn how to do things bottom-up. More than ever, we need change-makers who are empowered to try to make a positive contribution to our society. For this reason as well, I make the case that it is our responsibility to rethink how we are incorporating entrepreneurial education into the University. In the following chapters I outline a proposal how this might be achieved.

What to teach the students

Teaching entrepreneurial skills is not just trying to teach everyone how to start a business. Maybe that is the tip of the iceberg that is easiest to see, but the real picture is a little bit more complex. In a nutshell, we must give students opportunities to do projects in real life. Not just pretend projects like writing a report on how a project might be started, but actually starting one for real. Not just writing a business plan, but actually trying to make a sale and developing a real product or service. The students need to be given an opportunity to practice the skills they will use later in their careers, not only analyse them and discuss them. One does not learn how to play basketball by reading up on the way one holds the ball and passes it around, but by actually throwing it through the hoop and playing with their friends. Over time, if they get better, they might graduate to working individually with coaches, but the first steps are always practical experiences.

This does not mean we are expecting every professor to change their courses and include practical assignments in them. While that sounds great in principle, waiting for such a systemic change would take too long and we cannot presume we know what is best for every field of every domain taught at the university level around the world. Only professors who are experts in their fields should decide what is best for them. Instead, we should offer new courses specifically built around teaching entrepreneurship, like new venture creation, practical business skills and similar. Again, this does not mean we are changing the mission of the University to become a business accelerator and expecting all students to start a business simultaneously to completing all other academic obligations they have. In fact, it is extremely unlikely a university course will be able to produce a successful company from zero without already being lucky that highly motivated founders with a pre-existing idea have signed up for it. Starting a business is hard, it takes time and, often, luck. So instead of trying to help students to start their own companies, the “entrepreneurship” or new venture creation course should instead simply provide the opportunities to students to try out starting and managing a small business by launching a series of micro businesses prepared for them in advance. For example, they can be challenged to sell 100 tickets for an existing event. They can be given products to list on Ebay and learn how to promote that listing to make a sale online. They can be challenged to reach out to a famous person and get a response. They can be given a very simple product and assigned to launch a simple web shop to sell them. They can be invited to try and close a B2B sales deal, to fundraise 1.000euro for a charity or a number of other small micro business projects we can think of. Through these activities, they will train their abilities to do the same again later - when they will be working on their very own ventures or be innovating within their workspace. The best way of teaching entrepreneurial skills is to give students a safe space to fail, and then make it fun to try as many things as many times as possible. Along the way, this should teach the students the competence and confidence in themselves to tackle most professional situations in the future. Additionally, as such a course wraps up, students could be challenged to take what they learned in the core subjects and apply that into a new product or service proposal, or an intervention of a different kind. They can be asked to go in the field, create a prototype solution, reach out to real early customers and try to execute on it - and that can become the true capstone project of their years of studies which can be presented to potential employers or used to start building a professional network of connections. It is important to understand that it does not matter if this final project fails, as long as students actually try to launch it for real. As paradoxical as it sounds, launching a successful business is not the goal of an entrepreneurial course - the goal is getting the skills, the experience and the confidence to do it again later. No matter if our students end up being entrepreneurs in the future, or not at all, this will set them up for career success.

A side-note on imagination and creativity

Teaching innovative thought follows the same principle. It cannot be forced, but can happen by itself under the condition that students are confident enough to try many new things, and have an understanding in the steps needed to execute on their ideas. In fact, even though on paper I am an expert in imagination, I do not believe creativity is a skill someone has. Instead, I think imagination and creativity are merely consequences that we see in people that are willing to try a lot of things and who have the experience to make their attempts better over time. For this reason I sometimes find myself using the terms “entrepreneurial skills” and “innovation” interchangeably. Sorry about that!

To sum up, entrepreneurial education should consist of the following four things, and one additional methodology that ties them all together. These are:

• Entrepreneurial mindset: an iterative mindset that expects failure and is not deterred by it, but instead wants to learn and improve over time, being comfortable with the unknown and confident that everything will turn out well in the long run; the ability to create opportunities, not just wait for them.

• Entrepreneurial skillset: an ability to be persuasive in all kinds of communication, written, oral or otherwise, interpersonal and leadership skills, the ability to see the perspectives of others (empathy) and the ability to sell one’s ideas; curiosity and ability to research that includes information and digital literacy.

• Entrepreneurial toolset: proficiency in the use of most common tools in the business or professional world which includes, but is not limited to AI tools, social platforms, digital marketing practices, and also more traditional things like understanding how to use the tax reporting portal in one’s native country and similar.

• Entrepreneurial habitset: a fundamental way of looking at the world that defaults towards proactive problem solving and rejects passivity; discipline in execution, underpromising and overdelivering whenever possible, always acting in a professional and responsible manner.

Together with this, we should also teach the basic steps needed to start something new, or in other words, the default framework/methodology to come up with a new idea. This includes testing it to see if it is viable, deconstructing it into a small prototype so we can launch it, finding customers/partners/funders to get it going, understanding the activities to make it work long term, and learning approaches how to manage it successfully for an indefinite period of time.

Notice that unfortunately, in the majority of courses at universities today, only the toolset is being taught, but even that only piecemeal in select courses on how to start a startup, and not in the broader context of general steps to start something new. Lately, there has been a surge in discussions about mindset as well, but in my opinion, that has completely missed the point as it followed the self-help route of teaching to “believe in oneself” and “positive pop psychology” instead of an iterative mindset to problem solving. The rest, like the entrepreneurial skillset, habitset and sadly also the steps to build something new, is not being taught in any systematic way that would have a chance of working. For those rare few programs that do offer this, I offer my congratulations and urge everyone to copy them.

The content proposed above should give students a firm foundation for their future career, no matter what path they will take. I will dedicate an entire chapter on the proposed syllabi of courses to teach this and go in more detail about the best way to set them up, but before we go into that, it is important to understand that students who will be taking our entrepreneurial program fall into three distinct segments that mirror the three types of future entrepreneurs - and need to be treated somewhat differently. Let’s take a look at these students’ different needs and more specific things the program needs to offer them.

Needs based entrepreneurship

A lot of entrepreneurs start their companies because they are forced to. Maybe they lost a job, or are working in an industry that is very hard to get into, or perhaps there are fewer opportunities for them out there. For the most part, these do not intend to start large companies and their motivation is not to create some ground breaking innovation, instead they simply want to secure a stable source of income for themselves and their families. For them, discussions about scaling and securing investment are not relevant. In the context of university education, students that fit into this category will be creatives, illustrators, designers, translators, literary majors and the like. They will expect to work as freelancers, consultants or will be hoping to turn their hobbies into a source of income. Imagine a graphic designer who will need to sell themselves on the job market or someone passionate about travel writing who will need to secure sponsors for their online content. They stand to gain the most if we are able to teach them how to present themselves, build a personal brand, interact with clients and how to attract paying customers. Additionally, these students urgently require training on personal management and discipline, meeting deadlines, communication skills and at least a basic overview of all the things they feel are bad at, because “they are creatives, not salespeople.”

For the most part, this segment has not been served well by universities. Entrepreneurship courses, if they exist at all at their faculties, are focusing on how to launch a big company and only a small amount of what is taught in business class is immediately useful to them. Obviously, this should be remedied by including basic business and career skills in their study programs - and while it is never completely pointless to offer a full course on starting a startup to anyone, this segment really needs good course teaching them how to come up with an offering for the market that will allow them to earn enough to make a living.

Vision driven entrepreneurship

This is the canonical startup way that has been so popular over the last decades. Imagine people who are true experts in their fields, who after personal experience, notice an opportunity that has not been addressed yet - and launch a company to fill this gap. In theory if the opportunity is real and the market large, this can turn into a global company someday, attracting investment and changing the world. It must be said, however, that only a minuscule percentage of all companies actually come close to achieving this. In the context of university education, students that fit into this category will be the highest achievers and the innovators who already possess most of the business skills, as well as true domain experts whose research is obviously marketable, but they might not feel confident enough to commit to a business path. They stand to gain the most if they are taught the process of starting a company, test themselves on another, smaller idea to lose their fear and gain confidence, and receive personalised help from professors and outside mentors to bring their innovations to the world.

This is the only segment that already has some pathways to explore the business route within universities. Startup programs, competitions and even in-house incubators exist at the biggest universities, however the vast majority of them are just slightly missing their target group. They are focusing most of their resources towards the general student population and in particular, those studying economic subjects. Students who study business might not be the students who are in a best position to be successful entrepreneurs. To have a chance at succeeding founding a startup, you need to be a domain expert first and foremost. Business skills and operations can always be learned later. Knowing this, I believe the approach to help those very few potential founders is to stick with offering very foundational business courses across the entire university system, and personally recruit top talents in particular disciplines, postgraduate researchers and be on the lookout when new research findings that are marketable are published - then individually talk to them and offer mentorship instead of instruction. In other words, instead of focusing the most on vision-driven entrepreneurship, we should focus on this segment the least, only offering a structured way to individually support the few students who show real potential. And just like in professional sport, where the sports teacher will not presume to tell a future NBA star how to shoot the basketball and instead leave that to the professional coaches in local clubs, the university should have connections with professional startup accelerators and investment funds who will be more than happy to step in.

Student enterprise

Student enterprise is best explained as the “everyone else” category. It addresses the general student body, who should be given the opportunity to learn the basics of how a business is started, and encouraged to work on their skills - maybe because they will launch a company someday, or simply because it makes sense to prepare the students for entering the job market with confidence. In the context of university education, students that fit into this category are curious young people who are not really sure what to do in their future career, but have heard about business and are willing to consider trying it out. For them, the university should offer a sandbox where they can learn about the methodology behind starting a small business and can actually try it out for themselves. The best intervention for them should focus on the fun of it and skill transfer. It is absolutely not important what business idea they choose to test-drive so the program should just ask them to try as many ideas as possible, even stupid ones. It should not be expected these ideas will survive more than a few months, but instead that entrepreneurs will learn a lot of useful skills, gain experience, and get motivated to try again later with a more serious idea, if they happen to stumble upon it. And if not, they will be more hireable because of this experience.

This segment, when addressed by universities at all, is served by organising summer camps, hackathons, startup weekends or similar events, mostly in economics departments, in other words by sporadic programs that are sort of useful and well-meaning, but not systematic and therefore not really effective. This is where the biggest impact can be seen if entrepreneurial programs are set up right. Students of all disciplines can and should be included in this type of exploration, provided that it is done right. The focus should not be on idea generation, but execution. The courses should not just teach three most well known frameworks for business model generation, but general skills to enter the market and make the first sale. And more than anything else, they should focus on fun, real-world business projects that teach sales and other skills, which are easily transferable to business life. No pitch competitions with made up business plans, but a lot of fun challenges like business scavenger hunts. If and when it happens that some student company shows real potential, it should be referred to professional organisations that work with startups, as described above.

A side-note about in-university incubators

Business incubators are great and it absolutely makes sense to have one, provided that the critical mass of vision-driven entrepreneurs is consistently large enough that it makes sense to commit resources to set them up. A very unscientific observation from my 15 years of experience in this sector suggests that you will see one serious student startup team for about every 50 teams that are just playing around. And that is just the way it is - it does not make any sense to try and force more startups being formed, it will not be successful. At best you will be encouraging young economist folks trying yet another speculative/crypto play not providing real social value. Therefore, unless your entrepreneurship program is already running great and producing a lot of young potential entrepreneurs, committing funds to setting up a full incubator can be put on hold for a while.

If you are interested in reading more about how to set up and run an incubator, I have written a thorough playbook on the subject that can be accessed here.

All this together represents a big picture overview of all the content that needs to be taught in the University to provide a foundational understanding of how new things are created today, as well as the necessary steps and approaches to be able to do it. If the University is able to provide a sandbox where students can practice them, innovation, creativity and entrepreneurial successes will surely follow. In the next parts we will have a look at specific courses and the operational structure to make this work.

How to set up entrepreneurial education at a university

A new course

At the core, I am advocating for the University to create a new course to be offered in the University that specifically addresses how to create something new. It has many similarities to an entrepreneurship course on new venture creation, but includes skill training to execute this project, and methods for creativity, imagination and application. It must differ from a typical “come up with an idea and we will write a business plan for it” business course in three important points:

1. It does not expect students to work on their “own business idea” for a full year, but instead takes them through a large number of real micro businesses they must start or run during the year instead. The first reason for this is because it is more important to teach the “trade” skills of sending emails, calling, setting things up, delivering the service, talking to people, and most importantly, selling, over and over again. The second is that students invariably get attached to their business idea and keep developing it instead of going out and talking to people, and the third reason is that most of these ideas are not feasible, so are bad to experiment with.

2. It expects work to be 100% practical. Even writing a business plan or preparing a pitch deck is still theory, because teaching entrepreneurial skills can only happen by actually talking to people, selling and doing it for real, with all the challenges that will invariably happen. Those are precisely the point. So, students need to try themselves out in making a sale, delivering what is promised and solving any problems along the way. And then doing it over and over again for a year, to get confident.

3. The course completely ignores the typical theory usually taught in business or entrepreneurship courses. This class is meant to teach innovation and creativity, and thus does not include anything like profit and loss statements, incorporation law, or any specialised topic like social media marketing, fundraising or essentially anything that can be found in an already existing business school textbook. The most students will do in this class is a back-of-the-napkin calculation of the business model. The omitted content should still be offered in general entrepreneurship courses as they exist in typical business schools and this class is not meant as a replacement, but to complement what business instruction already exists.

Together, these changes mean it is a generalist business class that covers the earliest stages of a company’s life, but because it is fully practical, the key takeaway for the students is not merely the methodology how to start a business, but the skills to actually be able to do it. A detailed example syllabus for such a class is provided in the following chapters. The goal of this course goes beyond just its’ content, but aims to be a safe haven to fail, try again, and learn to build something new, which serves as a catalyst for creative ideas in other classes, and later in life. This topic should be approached like courses are organised in art academies - the professor delivers a series of practical assignments, then provides critique and guidance as the class goes through them - and this demands a deep level of experience from the facilitator. It cannot be emphasised enough that this course should be taught by an industry expert who has personally started a business and not an academic with research expertise.

The university should strive to offer this course to every student enrolled, however, we should consider specifics of this course for various different universities, departments or study programs. While the basic content outlined above does not change, students studying different disciplines will have a different path into to the job market and significantly different needs, so for this reason, the focus of the course should be slightly modified with this in mind. Let us consider a number of different disciplines:

• Arts programs (including design, architecture…) - The majority of students in these fields will end up being freelancers. There will be some exceptional artists who will never care about money or employment, but everyone else will probably fit into the category of pursuing their art for joy, then working as a freelancer in a semi-related field to make ends meet. The goal of university training should be to help them avoid the stereotype of a “struggling artist” by showing them how the incredible creative skills they have are valuable in the world, how to sell themselves or their services, and strive to connect them with the rest of the student body by combining the entrepreneurial classes between the arts academies and other hard sciences. These students might not consider themselves a good fit for a business course, which is all the more reason to make it compulsory - or work as hard as possible to include everyone.

• Economics programs (also including administration, MBA’s…) - Entrepreneurial and creative courses should be seen as a separate discipline to existing venture creation courses or business concentrations, where these new courses are prerequisites to entering the standard business course. Students are mostly given an opportunity to train and nurture practical execution skills and are challenged to think outside the box, which will complement the existing curriculum and also serve as a selection filter to quickly see who have the biggest potential for a career of company founders - and invite them to join serious startup programs, either within or outside the university.

• Specialist disciplines like medicine, law, veterinary studies, nursing - Most of these students will have a relatively easy path to employment after graduation, and a large part of them will not have a big wish to have an independent career. Nevertheless, a fair number of them will invariably enter private practice, so this course should be offered as an elective and focus mostly on how to start something new and skills needed for selling oneself as an expert.

• Humanities and social sciences - This is a broad group including a lot of students that are traditionally struggling to find (stable) jobs. Literary theory majors, anthropologists, political scientists and the like are most in need of support to be able to take advantage of their education, enter the job market successfully or come up with new concepts. They, more than anyone else, will have to create jobs for themselves either by convincing someone to pay them for a job that does not exist yet, or to launch a new service and become a consultant/freelancer. They need to be shown steps to take in order to launch new things in the market and in society, and must train their ability to fundraise and sell themselves. On a more positive side, I believe this segment, given the necessary training, has the biggest potential to contribute to a better world in the future, therefore I am advocating for this course to be compulsory for students of social sciences and humanities.

• Hard sciences, engineering and IT - This segment should include the most future entrepreneurs and founders, and for this reason, most universities have responded by offering courses on how to start a startup to them. This is a good step, but these students require more. On one hand, they need to be taught how to do customer research to understand the need of the people using their products, and on the other hand they require support in mastering communication skills. Students who are good at both of these (and not just in the engineering bits) will immediately rise to a management position. It should be recognised that engineering departments do not focus on these soft skills enough, so this should be the absolute emphasis of our course. It should certainly be offered to the students, at least as an elective, but it should not replace the existing startup development courses.

• Tourism, hospitality and regional studies - Absolutely everyone that studies hospitality or related fields, including regional study of the area they live in, has a very direct path to solo entrepreneurship. Perhaps more than any other discipline, these students can explore new ideas and try and launch them, as there is always an existing demand for tourist experiences and an inexhaustible source of opportunity to innovate. Schools that offer these programs must include courses on innovation, creativity, setting up a small project, selling to customers and similar. Graduates from these programs will either be working in an existing company for ever decreasing wages, climb the corporate ladder to become managers, or create something new of their own. The difference between the first and the latter two will come from the students’ ability to innovate and their level of soft skills. In these programs, the practical entrepreneurial courses should not only be compulsory, but form a large part of the entire study program.

• Pedagogy and teacher training programs - On the job market side, we are noticing a rapidly growing demand for private daycare, homeschooling and alternative education, which means that teachers will also be expected to sell their services or become solo entrepreneurs. They need to be taught how to present their offering, start a small consultancy, sell services or prepare a great portfolio. And perhaps even more importantly, on the education side, the practical content discussed above is highly applicable in all levels of education, and it certainly makes sense to train the future generations of educators in using select methods of creativity in order for them to use it in their classrooms. The challenge of having non-entrepreneurs trying to teach entrepreneurship can also be greatly reduced if an elective course is offered in pedagogy departments which allows future teachers an opportunity to launch and run a small company. Additionally, a pedagogy department could offer a special certification program for experienced entrepreneurs to teach this content.

• Cross-discipline and new programs - A lot of universities are launching innovative multi-discipline programs that aim to directly address shortages in the job market and respond to the need for innovative experts in a complex world. Such programs are still unknown among the employers, which places an additional burden on students to explain their expertise and sell themselves. For this reason, it is imperative students are set up for success in this regard, and the entrepreneurial course should be the main tool the university is using to help them.

• Postdoctoral researchers of any field - The last segment we are considering is not a discipline, but is still very distinct and deserves discussion. Every good university will have a number of excellent researchers who, given the right kind of support, could become the founders of some of the most impactful companies in the world. Universities are aware of this, but they are mostly not doing enough to support these scientists. They have incubators and startup courses, but wait for the scientists to enter them of their own accord. This is a mistake. Instead, the research community should be invited for a short, accelerated seminar that simply explains the steps needed to start something new, and invites a discussion about what are things that can be commercialised within their respective departments, which is facilitated by experienced business founders. The university should invite select students from economics or other departments to join these sessions. The purpose of these should not be to create new startups immediately, but instead to find potential opportunities, matchmake, motivate teams to try and start a business, and refer promising candidates to existing entrepreneurship support structures like startup courses, incubators or accelerators.

To sum up, the proposed course should fit very well into a number of different study programs within the university, and a case can be made to include it in nearly every context. It is important once again to distinguish from a “conventional” business course - while it can offer students a pathway to starting a company, it does not expect everyone to become an entrepreneur. Instead it hopes to provide entrepreneurial skills to everyone, which will prepare the students for the future, whatever it may be.

Mentorship

Encouraging creativity, innovation and an entrepreneurial mindset cannot happen only through class instruction. The second part of this effort must come through mentorship. both within the entrepreneurial course, as well as outside it. Any practical course will already expect the facilitator to step in a mentorship role, but this is especially important when we consider our ambitions to encourage imagination. From the big picture, the mentorship function in the university has two goals. First, obviously, during the practical coursework, professors are not lecturers but mentors, guiding the students during their individual exploration and learning journey. Second, though, it must be assumed and expected that students will at some point come up with an idea for some kind of innovation, a new project, a social intervention, a product or a service. This may happen when a student is taking part in the entrepreneurial course, or it may happen several months or years later, in a completely different course. The university should be equipped for that and be able to support students with mentorship whenever a new idea is born. The mentorship role should be understood as a mostly volunteer informal engagement of people with relevant experience who are able and willing to help out students just starting out to complete their real-world projects. In the context of teaching innovation and creativity, the mentor should be the person who demonstrates in practice how an entrepreneur thinks. When a challenge occurs, the mentor would say “here is how I would go about solving this…” and in most cases this would be a proactive solution or a creative “plan B” which the student can consider. Over time, the experience of interacting with someone who is always able to adapt, propose yet another alternative way to solve a problem, and is motivated to continue despite setbacks, will provide a practical demonstration of the entrepreneurial mentality which will put everything the students learn during class into perspective and reinforce the lessons learned.

There should be a mentor pool consisting mostly of professors of all the entrepreneurship courses as well as outside practitioners of business available to talk to students when they have a novel idea and wish to discuss it with someone that has experience, and a structure in place for regular mentorship support for those who are seriously taking on new projects, even (or especially) if these are not directly a part of a university course. It makes sense to have the professors delivering these courses full time teaching faculty and not expect them to do research in order to have enough time for the mentorship role, and managing the mentor pool. Maintaining this pool is one of the most important activities for a university teaching entrepreneurial courses.

There are three types of mentors a university needs:

1. Generalists (creatives, business owners) willing to spend time with students starting out

   Every university offering entrepreneurial courses should have 4-5 experienced entrepreneurs who are capable of having a critical discussion about a new business idea with an student, both supporting them when they brainstorm how to make an idea work, as well as taking the role of an experienced colleague and reminding them of possible pitfalls. Their main job is to be available to the students for any kind of general, strategic advice, visit the class on occasion, and be responsive via email when students have a question for them. Typically, they will meet with the students more than once, establishing a friendly relationship. The best type of person for this role is either an entrepreneur who has recently retired or a business owner with great interpersonal skills willing to interact with other entrepreneurs and talk about their business ideas. Ideally, that is a person who likes to “talk shop” in their spare time and genuinely considers talking to young people as a hobby, not a work responsibility. They should be asked to drop by the university occasionally as guests in the classrooms. Two contributions these mentors can make to the students are (1) guidance and domain-specific advice as students are starting out, and (2) connections to the broader professional community and introductions they make on the students’ behalf to open doors into their industry. The lead professors delivering core entrepreneurship courses, together with their assistants (if they exist) should be expected to take on this role along side outside mentors.

2. Experts in certain topics willing to help pro bono when needed

   The second category of mentors are domain experts. Think social media managers, digital marketers, lawyers, accountants, branding experts and the like. For these, the university must create a list covering all the domains that touch upon the early professional life of students.. The agreement with these mentors is to be available to take calls from the students and be open to a short pro bono consultation when someone needs specific advice. It should not be expected these mentorship relationships will go much deeper than that. The mentors should expect to gain value by having a source of future clients out of the university. Also, the university can work with them to organise guest lectures (free or paid) that can serve as promotional and customer acquisition channels. There should not be much difficulty in convincing mentors to sign up. These mentorship collaborations should typically only happen between students who are seriously considering launching a real-life project.

3. Accountability coaches

   The last category of mentors are people willing to meet with students on a regular basis to keep them accountable and help the students execute their projects even when there is no authority or hard deadlines. By far the biggest reason for student project failure is simply giving up due to a lack of motivation. During mentorship sessions with professors, students might be asked to create a timeline and roadmap of activities, and then someone can have the responsibility of checking up on them, encouraging them when they are falling behind or intervening in a different way. These mentors do not need to be business experts. Alumni who recently completed entrepreneurial courses are also a great choice for this role.

Setting up a mentorship pool is easier than one might think. Not that many mentors are needed, and most will be quite easy to recruit. The mentorship program should be set up small and organised to respond to students’ needs, not proactively offer mentorship sessions to students running a project. A mentor network will have a far bigger impact if it offers deep mentorship relationship with a few high achievers, instead of shallow mentorship relationship with a lot of average students. Consider a university that has 1.000 students. It will probably have at most about 200 of them enrolled in an entrepreneurial course. Out of these, about 50 will be pursuing a project at any given time, and at most 10 of these will be serious enough to require outside mentorship support. Four or five people willing to volunteer their time to be generalist mentors should therefore be more than enough, likewise for accountability coaches. They will probably meet with 2-3 students during the course of a year, and meet with each about 2-5 times. For domain experts, a list of one contact per specific industry should be enough, as the introductions will happen even more rarely. The vast majority of the mentors should come from the world of small business founders. Most will be more than happy to join and pass their knowledge on to students, as many see this as their moral responsibility and find it fun as well - as long as they have the time and the university does not make it too much of a hassle.

To recruit these people a simple email and phone call to the nearest business incubator or accelerator or the local chamber of commerce asking for personal introductions to appropriate individuals should be enough, especially if you can promise the mentors that you will prepare the students for the mentorship relationship ahead of time to make sure this will be a pleasant experience for the mentor.

The key to having a good mentor pool and motivated mentors is preparing the students for a mentorship relationship.

This is done by teaching the students the basic rules for working with the mentor. These rules should be discussed individually with the student before making the first introduction to a mentor, or during the first mentorship session with a professor. At the same time, this topic should be included in the intro session of every entrepreneurial class at the university. The rules are relatively straightforward:

• the students are in the driver’s seat of the relationship. This means they will reach out to the mentor with questions, be proactive with asking for help, follow up and follow through, and not expect the mentor to ever be proactive in communicating with them.

• the students will be respectful of the mentor’s time. This means they will be prepared for the mentor sessions with questions and will try to take advantage of the expertise the mentor that cannot be googled or found elsewhere, and that they will take the advice seriously.

• the student will always follow up. This means that it will be the student who will always send a follow-up email saying thank you, asking for the next meeting or sending any materials promised. This will not be the responsibility of the mentor to prompt them for this.

• the students will say thank you. There must be an expectation of treating the mentors well, so that they have a great experience, which is important for all the students in the community because a happy mentor will gladly help other students as well.

The students (and mentors) should understand that they should treat the first mentorship session like a first date. The professor (or university employee) will make an introduction, and then it will be solely the responsibility of the student and mentor to decide if they wish to continue meeting after that, and how to establish their relationship. It will be the responsibility of the student to ask for the next meeting and to coordinate the time and place for this to happen, and the privilege of the mentor to say yes or no. That way, the university has created a system that enables everyone that needs mentorship to get connected with a relevant expert, but is not responsible for future relationships and the burden of managing a mentorship program.

It is best to keep all mentorship relationships informal, without contracts or discussions about how many hours per month they will dedicate to the university. Asking mentors to be available for a set amount of time on a regular basis is much more difficult than simply emailing them if they would be willing to be introduced to a student when this becomes needed, and then let the mentor and the student continue the relationship if they wish. Do not make the mentorship process bureaucratic. When a student asks for mentorship support, the professor should simply make an email introduction with the appropriate person on the list of mentors they have. Do not use any applications, instead have the students arrange everything with the mentors the “old fashioned way.” Mentors hate busywork nor is it their job to submit reports or deal with any tech platforms. Their time is valuable, so it should be 100% spent on mentoring. If there needs to be a report for mentor relationships for any reason, it is the responsibility of the student to prepare it. Having the mentors sign contracts, keep a log of hours spent or submit reports is the most sure-fire way to lose them. Mentors also do not need to be paid. This sets a bad tone to the relationship with the students, creates a need for bureaucracy, and attracts the wrong type of mentor.

Lastly, avoid engaging generalist mentors who do not have personal, first-hand business experience. It is not possible to offer good advice for entering the market unless you are a company founder yourself. People who work for chambers of commerce, in entrepreneurship agencies, consultants, middle managers, accountants or lawyers who do not have any personal business experience or haven’t started some other company in the past, are usually the worst mentors, even though they can often be the most eager to sign up.

On being a good mentor

Trying to create something new, whether a project, a business or something else, is always going to be difficult for the students, so it is important to acknowledge that everyone involved in teaching the entrepreneurial classes and interacting with students enrolled in them, either as professors, teaching assistants, guest speakers or external mentors will have to step into the mentorship role. On the most basic level, the teaching team should support students on a personal level, not just in the academic pursuit or the business domain. This does not mean becoming a therapist, but because the students are doing something for the first time, they do not need only advice, but also encouragement and confidence. The mentors should take time to know the students, their motivations, life situation and what inspired them to commit to a new project. At the same time they should keep reminding them that starting something new is hard and that getting any kind of traction might take a long time, and that things can go wrong along the way. Often times, the personal support in telling students that everything will be okay is more important than the lessons they teach.

A good way to think about the mentorship role is to consider the mentor as always wearing four hats, and jumping between them as the situation requires:

• Teacher: the mentor knows things in business that the entrepreneur does not and they are able to point the entrepreneurs in the right direction in most business situations. This can range anywhere from how to pick a good accountant to what is the best platform to run ads on.

• Coach: the mentor should hold the entrepreneur accountable and encourage them to execute and meet deadlines. This can be a good-hearted discussion over a drink to commit to a new idea, to a more stern talking about meeting deadlines and having discipline.

• Older brother/sister: often times, things will be hard and scary. In some cases, it is the role of the mentor to provide the confidence the entrepreneur does not have. Someone to tell them everything will be okay, or to let them know that they will be on their side if it looks like someone is trying to take advantage of them.

• Friend: lastly, the mentor should also be the person to buy a beer to celebrate a success, or comfort the entrepreneur when something did not work.

To wrap this up, it should be pointed out that mentors should wish the best for their students, and try to help them as much as possible. With that being said, though, mentors should do everything for the entrepreneurs, but noting instead of them. It is excellent if the mentor is willing to brainstorm with the entrepreneurs, even to co-create things, but it should never be expected for them to do anything instead of the entrepreneur. They should encourage entrepreneurs, but not be the micromanaging parent who makes sure something was done right. It is also usuall detrimental to the development of the students in the long run if the mentors are artificially making the student projects successful by doing things instead of the students, and it is sometimes completely right and proper for the mentor to tell the student that what they are asking the mentor to do can be done by themselves.

With all that out of the way, we can finally address the main topic of this playbook, the syllabus of the central entrepreneurship course.

The core subject: the entrepreneurial course

I would like to propose a methodology on how to create something new, which works for all kinds of novel ideas that need to be executed. This methodology stands on the shoulders of past frameworks such as “design thinking,” “rapid prototyping,” the “lean startup,” and ultimately the tried-and tested scientific method. It assumes that in all situations, we should first test our hypotheses, and then invest our time, effort and resources to make it happen, which is not a novel concept. The uniqueness of this approach is that it strives to be much faster, disregarding a lot of superfluous activities that would be necessary to conduct if one tries to launch a big company or a scalable social impact intervention, but works perfectly well when building a tiny business, launching a local service or promoting personal services. It does not rely on any frameworks, canvases or research methods that would require specific training to use, as it assumes it is more important to practice an inquisitive approach, the iterative mindset, constant defaulting towards execution over perfection and a “work in progress” mentality. All of these principles are foundational for anyone hoping to create a business or sell a product. These omissions are not made because other frameworks are not good, of course they are. But the goal of this particular course is not to teach any particular methodology, rather to use the most basic methodology possible to teach the principles and philosophy underlying all design thinking/lean methodologies. If this is successful, students will without a doubt be capable to find, examine and use any other methods or approaches they might need in the future.

What follows is an overview of the steps to take a “back of a napkin” initial, completely undeveloped idea all the way to initial implementation, which I define as finding sustainable and repeatable revenue. It makes me a little sad to use a completely financial metric of success, but it is an undisputed reality that even artistic projects or social impact interventions rely on attracting viewers, securing funding or convincing a partner to contribute towards them. Nobody, least of all me, is denying there is a whole spectrum of things that can and should be done without any kind of profit motive. The methodology I propose does not disagree with this, it simply assumes that we can use the same approach to test if a customer is willing to pay for a as-of-yet non-existing product, to also test if there is a possibility to get volunteers to sign up, fundraise donations, solicit support, recruit partners or sign up users.

An overview of the methodology to launch something new

To execute on a new idea, we typically go through four phases, with distinct approaches and actions that we need to take. These are: (1) turning the initial inspiration into a concrete idea, (2) turning the concrete idea into a product that can be sold, (3) turning the product into the first customer by achieving the first sale, and lastly (4) turning the first sale into repeatable and predictable revenue. Let’s take a closer look of all these stages and also see how this applies to non-business interventions just as much as it does to early stage companies.

We need to start with an idea for a new product. This can be either something the students have come up with, something that was assigned to them by the professor, but we can just as easily imagine an idea to create a new event or a social intervention. The starting point is an initial inspiration, a very early wish to do “something,” before any serious thought has gone into it. The first thing to realise about this is that even if we are building a product, offering a service, or trying to organise an event, it is never just about the “thing” we are building, but also about the person who will use it and the story we will tell them to bring them on board.

A simple test before we do anything else

There are three simple questions we should ask ourselves immediately when we have a new idea. This first mental exercise will guide us to make it more concrete and serve as a starting point for future research. Let’s illustrate them with a simple example. Imagine the initial idea was to create a new product, a toothbrush with an integrated container of toothpaste in its’ handle, kind of like a two-in-one product. We are trying to figure out if this is a good idea. Honestly, it is probably a little silly, but nevertheless, we should follow the process and do the simple test.

The first question is what can we do with this, that we cannot do with any other product or service or solution? It is not an easy question, and if we cannot come up with an answer immediately, it is best to actually consider how we are using the existing solutions. So in our case, we go and have a look at how we brush teeth with a normal toothbrush and toothpaste combination and compare this with our innovative product. After a while it becomes apparent that among other potential things, our new product allows us to brush teeth only with one hand. Let’s remember this and move on.

After we know the first answer, the second question is who cares about this? Unlike before, this answer can be more straightforward. People who only have one hand probably care about this a great deal.

Knowing this, the third question is even easier, and we are just connecting it all together: what story can we tell to the people who care, so they become our users? And to give an answer, it is probably quite dehumanising to always having to rely on other people for simple things like brushing teeth. If one is given the option to do this by themselves, we have not just sold them a two-in-one plastic solution, but instead, we have given them human dignity. And probably, people will pay for this.

Obviously, this is an illustration, and we cannot be sure if our answers are correct, nor can we be sure if the product idea is a good one. There are certainly other possible answers which would take this product in a completely new direction, but we can absolutely agree that we have now clarified our initial idea much more, and that is certainly a helpful start. To recap, here are the three questions again:

What can we do with this product that cannot be done with anything else? - the business literature would say the answer to this will be the diversification of our product, and the key benefit
Who cares about this? - the business literature would say the answer to this will be the customer segment for our solution
What story can we tell to these people so they become our users? - the business literature would talk about the unique selling proposition and the marketing story for our solution

It absolutely makes sense to consider this for anything new we are about to try. This creates a first set of hypotheses we can start to test as we continue to develop our innovation.

It is never possible to just come up with a new idea and be sure it is good. A whole body of literature about lean approaches exists explaining in great detail that we do not have a crystal ball to predict what will work and what won’t and why it is imperative to go out and test every hypothesis before executing on it. We will not go into that and instead just consider what would be the absolutely quickest and easiest way to test if our initial idea (the one we defined through the 3-question mental exercise above) makes sense.

For this, we will introduce the concept of an “ideal customer” - another mental exercise. A philosopher would define the word “ideal” as something that is so perfect it cannot be improved in any way. Thus, an ideal customer would be perfect in all regards - has an endless budget, is already actively looking for a solution like our own, and because of the background, the way of life, current situation, habits and desires, we do not need to persuade them at all. When they find out we (or our solution) exist, they will jump through any and all hoops to buy it. If we are inclined to make a bit of a joke, we might call the ideal customer “our idiot.”

Now, obviously there is no such thing as an ideal customer, but once someone who is considering their own product hears the word “idiot” it is not hard for them to start imagining a persona with a name, a face, a place where they live and so on. The next step is to open the address book in one’s phone, the friends list on a social media network, or LinkedIn and pick someone who is as close as possible to the ideal customer. This should be a reasoned decision and some serious thought should be put into figuring out why somebody would be more appropriate, while someone else might not be. The really important thing to know here is to actually pick ONE person, not a general description sounding like “everyone who is…” - we are not trying to outline our customer segment yet, we are just trying to figure out who is the closest to the one ideal customer.

There are two reasonings for this. The first is that it is essential to try and sell to people who are the easiest to persuade, and for that reason it makes sense to consider who might be the biggest idiot closest to an ideal customer and consider building the first customer segment around people who are most similar to that person. And the second being that this is a completely adequate market analysis at the very start. Instead of trying to do top-down analysis, it is much quicker, cheaper and easier to go bottom up and start with one person, then expand from there.

Once this is done, the next step is to simply pick up the phone, open Gmail or LinkedIn messenger and get in touch with that person. Tell them honestly you are considering creating something and ask them what needs to happen for them to become your customer. There are two possible outcomes. They will either be positive and say they are interested, whereupon we will be able to figure out what is the best way to sell to them (figure out the sales channel - where someone finds the product or service), or they will say no. In that case, we need to ask for the reason to this in a polite way and understand why they are not an ideal customer. Knowing that, we can reconsider how the persona of an ideal customer looks like, and simply pick someone else and do the same process again. We should continue doing this until we are fairly certain in our selection of the ideal customer.

This step concludes when we have a concrete idea what we want to build. We know both why someone would buy/take up our offer (the value proposition), and where someone finds us (the sales channel). It might take a while to figure this out for the first time around, but in itself, this is a very simple process that anyone can do without any background knowledge in research methods or market analysis. After a few iterations, most everyone will master it.

The next step is to test if this idea can be sold, or if we can sign up a user, or convince someone to partner with us. The reasoning behind this is that we do not know if our hypothesis from above is correct, and the only way to be really sure is to see if someone is actually willing to give us money, not just be polite and give us encouragement (as often happens to new innovators when asking around about their great new thing). This is done by preparing everything necessary to make the first sale or sign up the first user.

The most important thing to know about this is that we are not going to build the product yet. We are also not going to prepare the sales documentation, project description or marketing materials to use as we promote our new idea, instead we are just going to focus on preparing the description of our new thing for ONE customer in order to test if that single person actually decides to buy. That will be the next test in the process, and if successful, we will be confident that our early thinking is objectively correct.

A quick and easy way to test any new idea in a few hours

I would like to propose a cheeky way to very quickly see if what we are trying to build has potential. Let’s start by imagining any product, service or social intervention. It can be very simple or highly complex, the steps will always be the same. For the sake of a silly example, my product idea will be a bubble making machine that has a sensor, connected to a tip jar, placed on the till in a takeaway restaurant. Whenever someone deposits a tip, the machine will blow a soap bubble, which will encourage people to leave more tips. This will be sold to restaurant owners.

In order to test if this product makes sense, I propose the following steps:

1. Open a Chinese web shop like AliExpress, or a website that allows us to create AI-generated images. Get an image that is sort-of similar to the product we want to build. It does not have to be perfect, but just close enough for people to have an idea what it will look like. A render will do.
2. Go to Ebay or a similar platform that allows you to list products for sale. Take that picture, and add a few sentences of description what the product is, who is it for and why might they need it. Set a price and include your phone number or email address so people can get in touch. Publish your listing.
3. Go to Facebook, or any other social platform where customers for this product might be, and share the link to your listing so that they can see it. Then wait to see if anyone calls.

If somebody reaches out to you and wants to buy, great. We have just proven that our product has potential on the market. In that case you can just say “sorry, I have already sold it” (but you can absolutely have a conversation and try to get as much information on that customer as possible). In case nobody calls, you know that something was not right. Perhaps the description did not work, perhaps the wrong people saw the listing, perhaps the price was not right, or something else was amiss. In any case, you can try again without much loss.

This should serve as a practical example how one should approach testing hypotheses about new things. The general principle is to try to do this as quickly as possible without spending money and without developing the product just yet. I am absolutely convinced that if someone does this enough times, eventually they will end up with a clear understanding about what can actually be sold - and confidently continue with actual product/service development afterwards.

Any idea for a product, a service or for something else must be tested before it is built, to prevent a situation where we are creating something that nobody wants. In the previous step we made our hypothesis for our ideal customer, and also about the best sales channel to reach them. So we still prepare the text of our offer, and then either send it in an email, pitch it over the phone or post it online somewhere. Depending on what we are trying to create, we can do the following:

1. If we are building a physical product, platforms like Kickstarter and online shops have shown that we do not need the customers to actually see a product before they buy it, a simple description including everything that a potential user needs to know before buying/signing up is enough. We do not need to develop the product itself at this point.

2. If we are building a service, organising an event, offering an educational program or something similar, all of these are sold through a written description and then a signup or order process. We do not need to craft the entire service before seeing if people are willing to sign up.

3. If we are building a digital product, we should not do any coding and development, only building a landing page with a “buy now” or “sign up” button should be enough to test if it has potential.

In all of these cases, at this step of the process, we are only interested in seeing if there is a need on the market, and we are not trying to take the customers’ money. It is preferable to take pre-orders or to simply tell people that sign up that the service is not ready yet and they will be notified once it is available. What we want to do is test by creating an actual sales situation where people will objectively “vote” with their wallets. This is by far the best way to see if we are on the right track, as even a few people who explicitly offered us money is a far better insight than tens of thousands of survey results.

A simple paper prototype for testing an idea

Prototyping an idea before actually building on it is the core of the design thinking and lean approaches, and we are using it here as well. The difference being, we are trying to make this prototype as quickly as possible and doing this without spending any money. The way to do this is to create a sales proposal or a brochure on one piece of paper. If we include all the information that are absolutely necessary for someone to decide whether to buy or not, place a preorder or not, or book a meeting with us or not, and then send this to the ideal customer, we will be able to objectively prove there is a need for our new product and that we are able to explain it effectively.

Let’s return to our silly example of a bubble-making machine, to see how that might look like.

No general template for this can be provided, as different products or services will have different things that need to be explained, but in principle, the one-page description should tell what the product or service is, explain why it is a good idea to buy it, explain how it works and all the details necessary to make an informed purchase decision, and lastly what the customer needs to do if they decide to buy it (a call to action with next steps). If we are doing something simple that does not require a lot of development, the call to action might be an actual payment (for example if we are a freelancer selling our services), but it could just as easily be a preorder form or an appointment for a followup meeting. Many people will be afraid to include a price in this type of prototype to only “test if it is interesting to people” but this is a big mistake. Once again, the thing we are testing here is our ability to write a compelling case to sell our new idea. We should exercise common sense when deciding what specifically to test with this first paper prototype. For example, if we are working on an initiative to offer girls free coding classes, the real question to make this work is our ability to convince a funder to pay for this intervention. In this case, the test is simply if we can write a letter that would explain the benefits of this to a company that would sponsor it.

Of course at this stage of development, we do not know if the price we list is correct, and there will be a number of logistical and development challenges we will still need to overcome. But we will only deal with these later, specifically, immediately after we have convinced ourselves that we are able to sell/get users for what we are trying to create. Experience with small, early stage projects has shown again and again that in the vast majority of cases, if people can sign up or revenue can be made, other problems are less challenging.

The last point to make about this step is to prepare this prototype document with only one (ideal) customer in mind, not a general sales proposal. Likewise, it is a good idea to do this in the form of a simple word document and not a website or anything complex. We will be generalising this text in later steps, but only after we are convinced that the content we have written actually works. At this point in time, we should be laser-focused on learning how to convince users to sign up or customer to buy, so even things like professional graphic design are a distraction. We must think like a scientist and isolate the content of our message to be able to test it, and not spend any time or effort on things that are not important yet.

It should not be a surprise what the next step is…

At this point in the process, we must stop doing everything else, and just focus on trying to make the first sale. This step is completed when we are able to persuade somebody to buy from us - and then use the same approach that worked with the first person again with someone else and see it work once more. That constitutes as a definitive proof that we have created something that is needed on the market, and have learned how to go about persuading people to use it.

The steps are very obvious. Start with the list of potentially ideal customers from before and talk to them, offering your product of service. If they say yes, excellent, that is great news. But it is much more probable that they will say no, at which point it will become our job to figure out why. When that happens, it will be necessary to talk to them and find out. This is a simple matter of saying something like “no problem, I am not trying to persuade you or anything, but as I am building this new thing it would really help me if you can honestly tell me why don’t you wish to buy, so I can improve on this and continue.” Once we know what is wrong with our current prototype solution, we simply go a step back in the process, change our idea, and try again. Eventually, we will succeed.

A numbers game

In the world of business, it is a generally accepted truth that trying something new has about a 5% chance of succeeding.

Simple mathematics tells us that if you try something with a 5% chance of success 20 times, your total odds of succeeding are 64%.
If you try the same thing 50 times, your chance of success becomes 92%.

Understand that a rejection at this point is not a death sentence for the new idea. In fact it is absolutely unavoidable, and should be embraced as a chance to learn from it and iterate on this learning to make it even better. There are an infinite amount of things that make an idea fail, but in the broadest of terms, all modes of failure fall into a few categories:

• Building something people do not want - we are simply not offering something that is useful. The solution to this is to try and understand the needs of the users better and go back to reimagine our product based on their feedback and try again.

• Picking the wrong user - we are offering something that is useful, but the segment of customers we are currently talking to are not right for us because they do not feel that particular problem or have already solved it in a different way. The solution to this is to rethink our hypothesis about the ideal customer and go talk to different people.

• Offering the wrong benefit - we are offering something that might be useful, but the benefit we thought is important, actually isn’t. The solution to this is a change in the product or service to focus instead on the benefit that actually matters.

• Not explaining it correctly - we are offering something that is useful, but we are not able to explain it well enough. The solution to this is a change in the wording of the brochure and trying again.

• Not making it available in the correct channel - we are offering something that is useful and we are explaining it correctly, but we are not reaching the customers easily enough or it is very inconvenient for them to buy because we are not in the right place. The solution to this is to go somewhere else or partner with someone who could help us approach the right people.

• The price is not right - we are offering something that is useful, but unaffordable to the target market. The solution to this is to rethink the product or service, streamlining it if we can, or to change it and offer it to a segment with more purchasing power.

• Not having enough trust - we are offering something that is useful and in demand, but people are sceptical if we are capable of delivering it. The solution to this is to establish partnerships, offer guarantees or allow users to pay after they see the final product

None of these problems are so bad that we cannot solve them. The general approach to every failure is to go back, change the idea, and then try again, either with the same people, or in other segments. We should not be discouraged by any one rejection, always looking for a workaround or a different solution.

To be successful in creating new things, you must always try just one more time.

The major reason why so few people actually become entrepreneurs or come up with truly innovative ideas is because this process is not really pleasant. It demands a lot of perseverance, accepting a lot of rejections and a high level of adaptability. By definition, trying to create something new cannot have one standard approach that one can follow. It requires research through action, going into the field and trying things out, and eventually, given enough time and enough iterations, you end up with something that is meaningful and can have a lasting impact. None of this is rocket science, the steps themselves are all simple… but taken together, it is extremely easy to give up at some point during this journey.

Not getting a clear “yes” is a sign that the concept does not make sense, and any further development will only result in failure. This series of iterations needs to be done because it is the only way that will definitely lead us to an actually useful service or a nicely profitable company… eventually.

A company that does not have products that customers want will certainly fail at some point, even if it is lauded by everyone. The people running it will waste months without anything to show for all the effort. And if funded, this might well turn into years of lying to themselves, the community and the financiers. At best it will be a waste of time and resources, and at worst if the team is really desperate to keep the lights on it will start to pitch anything and everything just to get some money, and completely ignore that it once tried to be a normal company. Imagine the worst kinds of crypto scams, grant-funded projects that do not benefit the end users, and overhyped venture-backed startups. This is obviously not the way to go.

A note of warning: as a young entrepreneur, or someone trying to start something new, as a precocious creative, or simply presenting oneself as a student desperately trying to complete an assignment, it will often be quite easy to persuade someone to buy out of a feeling of pity or a wish to give encouragement and support - and not because they genuinely need the product. If someone convinces a friend to sign a preorder instead of getting a real customer, they are only cheating themselves. Only a legitimate sale is an indicator that a successful venture can be created out of our idea. For the same reasoning any of the following things also do not help at all:

• getting a letter of support from an institution or a famous person

• being featured in any media

• getting someone to resell you (except if they pay you, thus becoming a buyer)

• winning a competition

• securing a grant

• getting funded

Making an actual direct sale made is the only proof that people want your idea. Anything else is just chasing a dream. There are no shortcuts or hacks. This task must simply be done the hard way.

Staying the path

Testing things that can be sold, talking to potential users and selling is really hard. Once you start, you are going to get many, many rejections. Struggling for weeks or months and getting rejected by everyone is deeply demoralising. It’s going to feel like it’s your fault. It will start to feel like something is wrong with you, that the product is terrible and that you don’t really understand your customers at all.

That is exactly how every entrepreneur felt at the beginning. It is normal and almost everyone goes through this at the start. But this very process teaches the entrepreneur everything about the market. No expensive consultant can come close with their top-down market analysis to what an entrepreneur who was selling every day for years knows about the reality of a market and the real feelings of the customers. Usually, taking the effort is well worth it at the end. The advice to take to heart here is: hang in there. Keep going. Remember it is a numbers game. Keep trying.

Also, it is important for innovators to take care of themselves during this process. The simple stuff matters, like doing things that de-stress you, whatever they may be. Spending time with friends. Eating properly. Getting enough sleep. Looking at the long run, one more marginal hour of sleep is nearly always more useful than one more marginal hour of work. The sales cycle should not take over the entire life and the belief people are more creative under pressure is a myth. Depression will creep up on people when doing dozens of failed iterations. When it does, notice that it’s there. Talk openly about it to people - professors and mentors, friends and especially to other people doing the same thing. Do not be ashamed. Fight it actively. Exercise and spending time outside in the sun help a lot.

But the by far the best way to protect yourself from this is structuring your time. Schedule yourself as much as you can. Know exactly what you should be doing every day. Do your best to stick to it. In many ways, freedom is your enemy. Let structure be your shelter.

The learning mindset

First and foremost, treat this as a learning experience. Don’t ever go into a sales discussion or approach writing another email hoping for a sale. Don’t hope for anything at all. Just go do it to learn, to mess up, to try things out and see what this whole entrepreneurship thing is all about. An entrepreneur once described this as imagining someone else was invited to this customer conversation, and you are merely the person “playing” him like a really good strategy game. You get to be the fly on the wall, try things out, but don’t really care if a sale will be made or not. You’re just doing it because it is interesting. And why not get more experience selling? Treat every sales conversation in this step like this. Stop caring about the outcome. Don’t hope to persuade anyone, just go there to learn.

This approach will be tremendously beneficial to a new entrepreneur. They won't be so very, very nervous and terrified. They will be less attached to the outcome and way less crushed if they fail to get a “yes.” (almost never does it happen that an entrepreneur gets a sale out of their very first few approaches, so they should expect to hear “no” anyways) And it makes the entire process more fun and easier to actually learn from.

The second piece of advice is to continuously set goals. But only set goals that are completely in your control. For example, a goal like “I want to have 10 customers by June 1st” is a terrible goal. It’s not up to the entrepreneur. Instead, choose goals about your own behaviour. A goal like “I want to try to sell to 3 people every weekday” or “I want to send 10 cold emails asking for a conversation every day” are completely in your control, easy to plan towards and easy to keep track of.

Have fun along the way

This is quite an important point.

Keep thinking about new ideas. Keep noticing cool stuff. Dive deep into stuff online that excites you. Stay up to date with new technologies, business ideas, artistic projects and things smart people put online. When someone asks you “do you have any ideas for new things?” you should have a good answer - one that excites you. Immerse yourself in things that are actually fun. It’ll keep you sharp, motivated, and happy. By this point you should have learned that actually putting an idea for a new project out there to see if it has legs basically takes a few simple steps that can be done in an afternoon. Maybe you will come up with a complete twist on your initial idea and you can decide to just try that as your next iteration. Or maybe you come up with something that is in a completely different field. Keep it ready to try if after a few dozens of iterations the initial idea leads nowhere. The options will never run out. You’ve embarked on this journey to be able to launch something new, right? So keep doing it.

A quick side note for teaching this step of the process

The psychological difficulties of the iterative process are the reason why it is a mistake to ask students come up with their own idea and work on developing it. The whole process is hard enough already, introducing all the emotional baggage that comes with trying to make your own precious idea work will increase all the mental difficulties exponentially. The best way to teach this methodology during a class is to do it twice. First introduce the whole methodology by assigning silly ideas to teams and have the students iterate those until they have all succeeded in a sale, and then do the same methodology again, this time allowing students to try and launch their own projects. If there is not enough instruction time, it will serve the students better to only do the run-through with a silly idea, than to do it with ideas of their own.

When teaching this part of the process, we must anticipate it will take a lot of time for everyone to successfully iterate the idea all the way until a sale is achieved. Be absolutely aware that for some, this might mean ten, twenty or even thirty iterations. Plan for that and resist the urge to just teach the steps, have everyone try them once with a few customers, and move on to the next topic even if almost nobody succeeded to get a sale. Students need both the experience of repeated failure and needing to solve a difficult problem in a creative way, and the feeling of accomplishment when they succeed.

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So, we now have a proven business idea for which we have seen some early sales. Good Job! This is the inflection point. We have proven our idea - and someone paid. Before this, the project was just some kind of dream, now it became reality. The only thing we need to do now is to take those learnings and use them to build a successful venture.

The last stage of developing our idea is turning our first successful sale into repeatable and predictable revenue.

A warning

Do not attempt to do this step without making sure the idea can be sold. Skipping the preceding steps and going straight to finding customers is something many people think they can do, because they are “absolutely certain my idea will work.” I do not think that’s smart. Perhaps you could get lucky, but much more likely it will result in failure because the product has a flaw that wasn’t apparent until it was tried. It is pointless to attempt advertising something to a batch of 1000 customers if you do not try selling it to just one first. Never try to scale something that hasn’t been proven to work.

This issue is my main point of disagreement with business teachers who are willing to include topics of business planning, scaling and fundraising into introduction classes to entrepreneurship, even if they are also teaching design thinking or lean methodologies. An introduction class to entrepreneurship or on new venture creation is simply not the time or place for this. There are a lot of reasons to include aforementioned topics into the curriculum, but they should (1) be in a separate course, and (2) they should not be taught using the students’ own business ideas as the example. Thinking about international scale and dollar signs from investors will always be much sexier than tedious conversations with dozens, sometimes hundreds of potential customers - and students will most certainly prefer to dream than to work. We should not give any impression to our students that it is ever correct to spend time on selling or scaling something that has not been thoroughly tested first, so it actually makes sense to prohibit further development of ideas that could not find a market, and keep iterating on them, or changing them completely. When using this methodology to help students develop their own projects, we must provide enough time for them to go through the testing and iterating stage before continuing. Just having one session dedicated to “this week we will be selling” and then moving on to the next topic completely misses the point of the exercise.

With that out of the way, here is what should be done next.

After proving sales can be made, the final challenge is to make sales repeatable. This is done by creating a workflow of all the activities within the small venture. The key focus should be on ways to attract new users, and/or to make revenue. Unlike all the activities before this one, this is the first step where we can rely on already-existing methodologies from business literature, as the steps I propose are absolutely not novel, only a distillation and simplification of well-established practices.

In essence, in order to have a successful small project, company or just to survive as a working freelancer, the main goal is to have enough customers to survive or if doing a social impact activity, that we have enough users that it is justified to maintain our intervention and/or enough funding to keep the lights on. The way to achieve this relies on the assumption that since we were able to make the first few sales, we can do the exact same steps with more potential customers, and that will bring us enough revenue to survive, perhaps indefinitely. The open question here is, how many users do we need, and what kind of activities do we have to do, to reach this. And to get to an answer, we will need to do our very first financial calculation. At these early stages, we do not need to concern ourselves with detailed financial projections in an excel database. A simple back-of-the-napkin calculation will be enough.

The first financial calculation for a new idea

When considering the financial viability of any new idea, there only needs to be the simplest common sense analysis of the costs, the profits and the break-even point, nothing else. To start, we should first ask ourselves, how much money do we need to make out of this venture. If we are a student with a side business as a freelancer, perhaps a 1.000euro per month is enough; if we do a literary fair, we can calculate that we need to fundraise 10.000euro. That is going to be our starting point.

Then, we need to think about the actual product or service we are selling, and come up with the net profit of one unit sold. This sounds complicated, but it really is only the list price of the thing we are selling, minus all the costs to deliver it to the customer. If we are selling a product, that might be the sales price, minus the material costs, minus the costs of packaging, delivery and taxes. If it is a service, we might try to calculate costs of transport to the client, and if we are particularly diligent, deduct 10% for miscellaneous costs like the occasional working lunch. If we are doing a book fair, we can ballpark the costs per attendee at about 40% of the ticket price. The goal here is to try to come up with a rough estimate, not a super-precise prediction, and because we know we are going to make a mistake, make absolutely sure we make the mistake in the direction of too much costs, not too few - in other words, be super conservative.

Once that is done, we should calculate the break-even point for our project or our business. That means taking the initial financial goal, and dividing it with the net profit of one unit sold. The resulting figure will tell us how many units do we need to sell in order to achieve our goal. For example, if the freelancing student sells jewellery at a net profit of 50euro, they need to sell 20 units every month to reach a 1.000euro profit. In the example of our book fair, there might be upfront costs as well as our personal profits, so the 10.000euro goal will consist of 5.000euro for the venue, 3.000euro for materials, and only 2.000euro for our profits. Finances for these types of early stage projects should be simple.

I advocate that at first, and certainly for the first couple of months of any new endeavour, we stick to this alone, because everything else is too complex and/or can always be learned as we go in the future - when it becomes necessary. There are numerous resources for this online and in business literature.

When we know how many sales we need to make in order to meet our basic financial goal, we will be able to decide if this actually makes sense for us. The bubble making machine in our previous example is a business that will surely find one or two buyers, but it is a very different story if we are considering it as a startup opportunity and calculate that we need to make 2000 sales a month. Knowing how much we need to sell to make ends meet gives us an opportunity to decide if we wish to pursue this business, or not. If we are still confident, great - we can move on. If not, we can do the exact same thing we did with any previous setback - we stop, go back, change something, and try again.

Getting users or making sales is hard. We should assume that we will not be getting users just because they will start contacting us and knocking on our door, but instead that we will need to find them, reach out to them, send them our sales materials, maybe meet with them to sign them up, and much much more. All of these activities will take time and cost money. To manage this, we need to prepare a sales plan (or a plan to get users). The basic answer how many sales we need in a given time period will help in this regard.

A quick primer on how selling works

Any person who is trying to launch something new will need to have a basic understanding of the sales process. I would like to propose the absolutely foundational basics that need to be taken into consideration as we continue preparing the sales plan for our new idea.

A decision to buy something does not happen instantly, like an on-off switch. It is always a process that goes through a series of steps. At the start, there are a lot of people who do not know we even exist. Then, we do something and people become aware of us (for example, we send them an email). A smaller number of those become interested and start inquiring for more (for example, they have a look at our brochure, our website or other materials). An even smaller amount might express a desire to buy from us or take part in our activity (and perhaps we set up a meeting with them). And then, a fraction of these people actually make the decision to act on this desire and buy. As we are moving from a lot of people as our potential customers, to only a few people who become our users/buyers, we can imagine this process resembling a funnel. This is actually a formal term in business textbooks.

Knowing this allows us to imagine how our sales pipeline or funnel might look like. For example, if we once again return to our fictional case of bubble making machines. we can imagine our way of selling them might be by sending emails to restaurant owners in our neighbourhood, then following up with a phone conversation, setting up demonstrations of our machines for those who are interested. If the owners of restaurants like what they see, they will end up purchasing from us. Additionally, without knowing anything else, we can safely assume that not everyone will be interested and not everyone will buy after they see our product - and we will need to send more emails than we will have meetings, and that not all meetings will result in a sale.

What are the percentages of people saying yes? Well, this is hard to say, but there are benchmarks available if you google for them. In general, a few dozen emails result in a meeting, and a sale happens every three to five demonstrations. The best way to know these is to simply start selling - they will become quite obvious soon.

After considering the way a sales funnel works, if we know how many sales need to happen in a given time period, and we have decided on our own sales process, we can roughly estimate how many approaches we need to do every month, and how many meetings do we need to have in order to stand a chance to meet our sales goals. We will never be able to have a precise prediction, but for the purposes of organising our work, we can easily have a general understanding what activities we need to do every month for the business or project to survive. These are the steps:

1. Calculate how many sales need to happen every month - we have already done this above

2. Draw an outline of the sales funnel or pipeline - consider what would be the best way to approach the ideal customer, based on the prior conversations with them. Perhaps we need to have a list of emails and start reaching out, or perhaps we need to book a stand at a trade show. Maybe we need to create a website, or maybe we need to make a deal with a retailer to sell our product.

3. Calculate how many approaches need to happen at the top of the funnel, so that we stand a chance of making enough sales at the bottom - For example, if we need to sell 20 bubble making machines per month to have a nice side income, we should expect we will need to demonstrate the machines to about 60 restaurant owners. In order to get meetings with that many of them, we will need to send about 1000 emails.

At this point, there will be a lot of variance between different projects and products, so we can only discuss very general advice. But in essence, every company, project or other kind of intervention will end up with a concrete number of potential customers that will need to be contacted in some way. So, a target list of these customers with contact information will need to be created, or alternatively this will be a list of venues, events or similar places where enough people can be approached. Once this task is done, the combined list or lists will inform the execution timeline where concrete activities to actually approach these customers will be listed.

This will be a long list with a lot of activities - and sometimes it will be immediately obvious that it will not be possible to accomplish everything with the available number of people and resources. In this case, yet again, the approach is to step back and see if any changes can be made. Perhaps the product is not as promising as initially thought and needs to be changed so more can be charged for it (and less customers are necessary to break even). Perhaps we need to find other sales channels, or perhaps we can come up with new products…

And then, to make it a reality, you simply need to get to work. There isn’t much else to be said about this. The entrepreneurs must create a timeline of activities and commit to an intense period of work to get it done as soon as possible. The best advice seasoned business founders can share about this is to try and focus on doing activities that directly lead to sales first - and everything else only later, if you have the time at all. The first goal of any project is to survive, to get enough revenue, to reach enough users, and to deliver what was promised. If this is not done, everything else is meaningless.

This is where support from mentors, teachers and friends is the most useful. They can help creating a realistic action plan. They can offer advice on where to turn next and help strategise on how to make the business work. They can hold the creators accountable and help maintaining focus on the right things. They can be relied upon for emotional support because this is almost always a long journey.

The same problems that entrepreneurs experienced during the first cycle of selling will happen again. An approach will not work, and a new one will have to be tried. Only this time, this will not just be find another person and write another one-page sales proposal. There will be much more work. Contacts will need to be gathered. Sales documentation will need to be prepared. Hundreds of prospects might need to be approached. The cycle from convincing someone to say yes to actually getting it done and seeing money will take a long time. Here are some general pieces of advice:

• Keep a testing, learning and iterating mindset. Whatever you try to do, treat it as a test. A “perfect” sales pitch that will be shared with 100.000 people, but take two weeks to prepare can fail just as easily as a quickly drafted informal proposal to 100 people. It is better to outline the basic sales argument, and quickly put it in front of a small group of customers, see if it works, then expand on it and only then go and approach the entire market.

• The success of a new venture is best predicted by the ability of the team to deliver new iterations quickly. Strive towards quickly delivering sales approaches and simply keep trying.

• Be as frugal as possible. Money will probably not come as quickly as hoped for. Most business ideas fail. It makes absolutely no sense to spend money for anything that has not been tested. With enough effort and creativity, most things can be done almost free.

• Never forget that the first priority of any project, even those completely social in nature, is to secure enough income to survive. Having paying customers or a source of funding, gives the privilege to do everything else, including fulfilling the mission and vision of the entrepreneur. Sad, perhaps, but that is just the way it is today.

• Happy customers will help. Delighting customers will help eventually because of repeat sales and referrals. But the impact will not be seen immediately (think, several months). Help yourself by providing an easy way to get testimonials, referrals and recommendations.

• Unhappy customers will definitely make it a lot harder. They will be more loud compared to satisfied customers and eventually, doors will start to close. Always be honest and avoid not delivering what was promised.

• Things will go wrong in the most unexpected ways. They will also take longer than planned. Expect this.

Execution and discipline are more important than creativity at this stage

A final word of warning. There are not many methodologies or best practices for this part of the process apart from knowing that more input will produce more output. After we have tested and proved that a product, service or intervention can work on the market, the success of that venture mostly depends on the amount of work put into sales. This presents us with an interesting situation. For the most part of this process of creating something new, it was obvious that people who are imaginative and able to come up with many new concepts have a clear advantage, as they can come up with unique insights more quickly than the rest. But at this stage, the roles reverse. You do not need to be smart for sales - in fact it might be a serious disadvantage, because smart and creative people did not need to develop much discipline to be successful, and are prone to getting bored with repetitive tasks. Managing operations of an established team and driving sales is monotonous and relies more on repeating the things that work, than trying to come up with new imaginative approaches. This simply means that we should encourage teamwork and collaboration.

This is the end of a structured methodology for starting something new. As discussed above, from this point onwards, we enter the field of execution, operations, business and management, which are well established disciplines with a lot of resources freely available online. The only thing left to comment about future growth of newly established ventures is that it will be influenced mostly by the environment (what the people want and how the world is changing) and the execution (how quick and efficient the team running the company/project is). Therefore, long-term, the foundational experience of going through dozens of iterations and perfecting the products over time will be extremely useful for future success, even though the project or company itself will change dramatically and probably be completely different to the one envisioned on the back of a napkin at the beginning of the journey.

Three “flavours” of new products, services or projects

The methodology discussed above is applicable to nearly any situation, no matter what the actual product, service or intervention is. The basic premise of testing first and executing later is always correct. It is true, however, that ideas come in many shapes and sizes and we do approach some of them slightly differently. To understand this, consider that all ideas for new things will fall into one of only three categories - and we will slightly adjust the way we approach testing them. These are:

1. Painkillers - products or services that directly address a pain or a problem, people are aware of. For these, the majority of the time spent on testing should be on trying to prove the existence of an unsolved problem that is large (painful) enough, so that when we propose a solution, a sale will happen more or less by itself. If we can find enough people with a problem, we will be successful.

2. Vitamins - products or services that do not directly address a pain or problem, but can make the life significantly better. For these, the majority of the time spent on testing should be on trying to create a story and communicate the benefits of the proposed solution. If we are able to find a proven narrative that makes people aware of the need and potential benefit, we will be successful.

3. Candy - products or services that are not necessary in any way, but certainly make people happier. For these, the majority of the time spent on testing will be on seeing if there is a strong reaction when people become aware of it and if they are willing to talk about it. This category includes art, movies, fashion - things that are typically very hard to test before actually making them and it might actually be necessary to prototype it in more detail than others.

This is mostly relevant to the facilitator of the course who will need to make an assessment in which category a particular student idea fits and adjust the suggestion and guidance accordingly.

How this content fits into the syllabus

The methodology described above represents the core content of the proposed course which needs to be taught. Now we should have a look at how it fits into the wider syllabus of the year. This general course should cover three major areas: the soft skills required for entrepreneurial activity, then the methods of creativity, and finally the methodology to create something new which was described above. Let’s expand on these.

Topic one: The soft skills

The course should open with an attractive and fun module that is very different from traditional university lectures in order to get students motivated and engaged. This is why the first module will be a practicum of teaching soft skills that are necessary for entrepreneurial activity. It is designed as a sequence of individual, team-based and whole group practical tasks that need to be completed. Through them, students learn things like how to make the first sale, convince a stakeholder to cooperate with them, send an email to a famous person and get a response, cooperate as a group in a highly complex situation, and similar. The purpose of this is to gently prepare them to take on more and more difficult assignments during the other modules which will expect them to do research in front of users, negotiate, execute a micro business and ultimately launch a project of their own.

An important topic of a number of these challenges must be the essential skillset to enter the professional world, which includes how to connect with someone, get an introduction, how to write a persuasive cover letter and CV and how to ask for money. All of these are be practiced for real through gamified challenges.

Example challenge from this module

Students will not be provided any other instruction apart from »you have 2 hours, take a selfie with the Mayor« This task will first seem impossible, and very scary. However, it soon appears that it is trivially easy if you just ask, since politicians love to take pictures with young students. The lesson learned here is that sometimes you must only ask – if you dare.

Discussion topic during the debrief: the importance of simply trying and asking – why are we shy?

Five or six such challenges should be set up by the professor or facilitator, and as the students complete them, they should feel confident and comfortable with the purely practical way this course is conducted, and train the skills that are needed for success in the 21st century.

Topic two: The methods of creativity

As students feel relaxed in self-exploration and completing practical assignments, these now turn towards training curiosity, action research in the field, creativity, testing hypotheses and applied imagination. Again, the course follows a sequence of tasks that invite the students to practice the first steps of the design thinking process and become good observers, have empathy when doing customer research and be able to take an outside view. The purpose of this is to be ready for the next module, which will expect of them to use these same methods to come up with solutions to challenges during product and project development. After completing this module students will be able to come up with valuable insights and as a result, be able to generate interesting ideas.

An important topic of a number of these challenges must be the methods behind conducting user interviews for customer discovery and related research methods, which are particularly useful for starting a new project and thinking like a designer during product development. All of these are be practiced for real through gamified challenges.

Example challenge from this module

Students will be asked to bring an item to class. Their only instructions will be: “bring a useless object.” Then, as a group activity, they will talk about what makes a particular object useless and why. As they dive deeper, they will explore what others brought - and then the facilitator will ask them to swap these objects with someone else. After this, students will be tasked to spend one hour and make their useless object useful - and present their reasoning for this in front of the class.

Discussion topic during the debrief: the importance of thinking outside the box - is there ever one correct answer?

Five or six such challenges should be set up by the professor or facilitator, and as the students complete them, they should learn the basic methodologies underpinning the most well established human centred design and applied imagination methodologies as well as train the skills of an active researcher not afraid to go directly into the field and try to come up with unique answers to complex questions.

Topic three: how to create something new

This topic has been covered extensively above. The students must go through this methodology in real life and become proficient in it. The important thing here is that it is not enough to just run through it once, but to actually enter the cycle of iterations, have an experience of a failed hypothesis and the struggle to come up with a better solution. The best way to cover this topic is to go through the whole process twice. Once with a completely trivial and possibly stupid idea for a product or service, to which students hold zero emotional attachment, so they can see how powerful this methodology is to improve any idea, and then once again in groups to launch a micro-business or small social intervention of their own. The end-goal of this is not to spin out a new startup, but merely to give them the ability to take on a complex project of their own later.

Another important consideration when designing this course is to deliver it in a small group (up to about 25 students) and make sure there is enough instruction time for a lot of discussion with the professor leading the course. As these practical activities are taking place, they are a natural conversation starter for topics like future career plans of the students, their passions, their ideas for new products, businesses, or their aspirations to turn their hobbies into a source of income. If, or perhaps better, when it happens that a good idea pops up, the professor should tell them it is worthy of further exploration - either in the context of the final mini-project or independently. This is also the time for students to learn about the mentor network at the university (as described above) and to ask for introductions if they are considering pursuing their projects seriously.

I myself as a professor would always find a way to allow students in my classes who clearly express a desire to develop their own project and have an idea that shows potential, to separate from the current groups they are working on and carry on with their coursework now using their idea (with the exception of the first iteration of the central methodology, which is always taught using neutral examples).

• A full syllabus of a semester-long course that I personally teach is available here as an example. It follows the same content described here, with some of the activities placed in the curriculum in a slightly different order to make the class “flow” better.

• It might sometimes be necessary to offer instruction on the core part of the methodology to start something new in a shortened timeframe, so here is a syllabus and description of a workshop teaching this in 4 sessions of 3 hours each. Such a workshop can easily be offered as a part of orientation/intro week, a summer program, during an off-site excursion program, within an existing design management or entrepreneurship class or as a simple after-hours elective.

A side-note about the logistics of this course

Since this is a course that expects a lot of practical work and a high level of interaction, a maximum class size of about 25 is preferred. Now, because I advocated the case this course should be offered to every student in the University, a good way to make this work is to have the professor who facilitates this course focus only on teaching it, without any other teaching responsibilities or research obligations. Many universities I know have decided to open this type of course to all students in all departments, and conduct it daily. The professor would deliver the same content every day of the week, and students would join any one of the five daily sessions, depending on which one fits into their schedule. That would also allow a student who cannot attend a session one week, to simply join another. This maximises the number of students who can take part, while at the same time allows the professor time to deliver the course and be available to the students for individual consultations. It also makes sense to invite junior members of the faculty to join this course as teaching assistants as that experience will enable them to teach this course in the future.

Other courses that can support entrepreneurial education

If there are resources available and there is commitment from the university, a number of other courses can be offered along side the core entrepreneurial course, and together they can form a “department of entrepreneurial activities” or “centre for applied imagination”. I am envisioning this as a small and (probably) informal department, that does not take responsibilities for separate degrees, but instead focuses on complementing the entire academic offering of the university by providing a space for students to explore skills for the future, innovate and nurture their creativity. In fact I believe this is a better way to support entrepreneurial thought within the University, as someone who completes a degree in “entrepreneurship,” even if they are exceptional in the methodology of starting something new, simply cannot compete with an engineer or other kind of domain expert, who also happens to learn the basics of entrepreneurship. Therefore, all courses the university decides to offer in the field of entrepreneurial thought should be aimed towards students who are enrolled in all specialist study programs. In descending order of importance, here are the courses I would propose to include in the university offering after the core course on entrepreneurship:

1. Curiosity and applied imagination - a semester-long practical course that teaches students the ability to come up with valuable new ideas, concepts, products or projects.
   
   This course teaches the steps to notice interesting problems and invent new approaches to address them. The course is meant as a sandbox for students to test out various approaches from the fields of anthropology, design thinking, action research and prototyping with the ultimate goal to create individuals who are confident in dealing with the unknown and are able to come up with new perspectives to existing situations.

   It is a practical course that broadly covers the methods of creativity and imagination. Simply put, it gives students the toolkit necessary to come up with valuable insights and good ideas. It includes ways to conduct an effective analysis of a problem, ideating potential solutions in the form of action research, quick prototypes and steps required to asses the impact of their interventions – topics that broadly fall in the scope of design thinking methodologies.

   This course is meant as a complement to the core subjects in the field of study of every student and is aimed at preparing future innovators to confidently pursue their creative ideas. Students will be forced to take a broad view to their field of study and consider potential opportunities within it that might result in new ventures, new initiatives, and new ideas in general.

   It is 100% practical and has no exam at the end. Instead, students are going to »get their hands dirty« and try everything for themselves. They will be expected to try all the methods in practice and will be challenged with real scenarios, practical challenges, simulations or real life assignments. These are expected to be time consuming and will demand full engagement. After the course, students are expected to know exactly what steps to take when considering a new idea or when facing a problem without all the information immediately available to them. This will greatly increase their career prospects and leadership potential.
   
   View the course syllabus here.
   

2. Discipline and execution of projects - a semester-long practical course that gives students the training to persevere and complete projects with self-discipline and professionalism.
   
   This course provides students a bi-weekly simulation or game scenario, designed to develop, practice and master key skills for getting things done. The course is meant as a fun, but demanding, sandbox for students to test themselves in difficult scenarios that are similar to real-world professional tasks. It covers various fields of leadership, teamwork, negotiation, persuasion techniques, communication tricks and approaches to getting things done. The ultimate goal of the course is to emulate a »boot camp« for business skills that creates individuals who are confident in dealing with the unknown and have no fear taking on complex tasks. 

   This course is meant as a complement to the core subjects in the field of study of every student and is aimed at preparing future top performers. Students will be forced to step into new situations, deal with demanding deadlines, think on their feet and quickly self-organise. 

   It is 100% practical and has no exam at the end. Instead, students are going to »get their hands dirty« and try everything for themselves. They will be expected to do their absolute best in completing progressivelly more difficult and complex tasks. The tasks cover a broad spectrum of skills and mindsets that are required to be successful in the professional arena. The course will culminate in a final graded challenge – a 72 hour group mission in the form of a »scavenger hunt« where students will be expected to demonstrate the skills learned during the course in practice.

   After the course, students willt know exactly what steps to take in most professional situations. They will have the confidence and experience to start a new project, bring together people to start a new company or be an effective leader in their field. This will greatly increase their career prospects and leadership potential.
   
   View the course syllabus here.
   

3. Creative application of business models - a semester-long interactive course that teaches students how to understand the way modern economic actors work in order to apply these lessons to their own ideas.
   
   This course provides an inside look into 12 real business models with the goal to provide an opportunity to get an intuitive understanding of the way companies, and the economy at large, works. The analysis is done using interactive gameplay in the shape of enactments of leadership discussions, educational simulations, mock courts and debates.

   It is a »managerial economics course« that goes beyond the scope of economics and takes a holistic approach to business model analysis. It does not look at the numbers or metrics, but invites the students to immerse themselves in the stories of various business models presented to them and »solve« an interactive simulation surrounding them. This allows the students to put the things they learned in their economics and business courses to the test and also provides a sandbox to practice critical thinking, problem solving, communication and negotiation skills and leadership.
   
   View the course syllabus here.
   

4. Other courses on specialised topics within imagination, human centered design and specialised career development or venture creation topics - if there is interest among students and opportunity within the university, the entrepreneurial concentration should consider adding specialised courses in all of the topics discussed above, as well as considering including a course on career development (how to make professional connections, how to write a resume, how to convince someone to become your mentor, how to build a network, public speaking and communication…) or more traditional venture creation (incubation of students’ ventures, technology businesses, spreading your message online, storytelling for personal and professional settings…). A lot of opportunities exist for an ambitious institution, but as with many other ideas discussed here, this should be done after a clear need is seen, and only after the foundational courses are set up.

Any new department, responsible for this course concentration, should maintain its’ focus on teaching the application of content taught at the university as a complement to current educational offerings. And do this through practical education with a high level of individual student work, requiring the teaching faculty to spend a lot of time in a mentorship role and designing new learning scenarios. For this reason, this department should not focus on traditional academic research. Instead, it should make sure to stay up to date with existing experiential learning methods and, if able, contribute novel methodologies for teaching within this field.

Conclusion

I am hopeful this guide will provide value to discussions among university administrators considering how best to include entrepreneurial education in the curriculum. Entrepreneurial skills are the skills of the future, and I am absolutely convinced there is a place for them within any institution of higher learning. I hope we can understand the whole field of entrepreneurial thought as much wider than just a sub-discipline of business. Entrepreneurial activity is perhaps the best sandbox where we can train creativity, imagination, practical execution skills, communication and professional skills. The more unpredictable our future becomes, the more they are needed. I am excited to see how this field will develop in the future of academia.

How to run a local incubator

This is a practical how-to guide for anyone wishing to manage a local business incubator well, compiling best practices from 15+years of experience in the field. It includes everything from creating a program of activities, to nurturing a community as well as the boring logistical details and a budget. It is meant as a suggestion for a cheap and effective way a local incubator can be set up successfully.

Over the last two decades, every local community around the world wanted to have its’ own Silicon Valley, a place where talented (young) people would come, get inspired and launch businesses that would create jobs, wealth for the local population and create a better world. Many millions of euros/dollars, mostly from the taxpayer, have been committed into these initiatives, especially in the developing regions, but the results vary. Some have been very successful, but sadly, the vast majority, are not achieving the desired effects.

In this guide, I am hoping to present a case for what makes a local business incubator effective and a playbook of activities that should be implemented in any incubator wishing to be successful: to help nurture a new generation of entrepreneurs, to support those just starting out, and to create a community where innovation can (and does) happen.

Motivations behind a business incubator in a local region

The case for a business incubator is clear. Nobody will disagree with having one somewhere nearby. There is a building in need of repair and it would look great to have a shiny incubator with hi-tech business, the unemployment rate is high, maybe a lot of educated people are moving away to the big cities, high growth startups are attractive and besides, everyone else is doing it. On top of that, there is EU funding easily available and local elections are coming up. Starting an incubator is really good optics and good politics. So nowadays, pretty much every town has one.

All of these motivations are correct, of course… but we need to look a bit deeper and take a more critical approach, otherwise we are doomed to spending a lot of money for little results.

The first thing to consider is what is the realistic goal for the business incubator in your region. It cannot fix all the problems with unemployment and lack of development, but it can be a launchpad for a few dozen new businesses every year. It might just offer very affordable office space for rent. It might be a hub of innovation for a particular field (wine production, metallurgy, etc.). Or be a way for students to try out micro businesses and maybe spin out startups from ideas in research labs of the university. Maybe it can help struggling artists learn basic business skills to be able to freelance and make a living. But probably, it cannot do everything from the list above. It is much better to only focus on one area and do that well.

Most local incubators decide to focus on helping early stage small businesses, which might be food and agriculture-focused in more rural areas, which makes sense.

What are the essential things an incubator must provide

Just dedicating a couple of offices for a business incubator and declaring the imminent coming of high-tech, venture-backed international high-growth startups isn’t going to work. Shiny buildings are really nice to have, but the incubator succeeds or dies by the quality of the program offered to entrepreneurs. After you know what you want to achieve in your incubator, focus on creating a well thought-out plan of activities.

At a bare minimum, an incubator must provide the following:

• general business education (workshops where people can learn what steps to take to start a company)

• mentorship and connections (an opportunity to reach out to people willing to share advice and open doors to potential customers/partners)

• a community of entrepreneurs (meetups, events, happy hours or anything else that facilitates entrepreneurs to meet and befriend each other)

More details on how to achieve this in an effective way are provided below . For now understand that any activities apart from these bare essentials should only be considered if these basics are covered. If budget is an issue (it almost always is), those three should be prioritised above all else. In particular, do not spend money on expensive facilities, fancy office furniture or hi-tech gadgets. In fact, there are many very successful incubators that never owned their own space and took up whatever empty building available, simply moving whatever little furniture they have to a new location when they were forced to relocate. Any temporarily vacated office or building with an internet connection is completely enough for an incubator to operate in.

An incubator is also usually a place where entrepreneurs can rent desks or offices for their young companies. In my opinion, these are getting less important as most early-stage businesses are now started from home on a laptop. Offices are mostly needed when a team urgently needs a place to work together and cannot afford the market rate rent. Offices in an incubator should be basic and cheap. Joking only a tiny bit - I love it when the chairs in the incubators are uncomfortable and squeak. This motivates entrepreneurs to grow their revenues quicker so they can afford their own comfortable office as soon as possible, thus speeding up their progress and vacating incubator space for the next team sooner.

Do not think specialised facilities or investment in hardware is necessary for a good incubator. This is not true. A motivated entrepreneur will always find a way to persuade someone to let them use a 3D printer, so there is no need to purchase one for the rare occasions it might be needed. Finding a supportive community on the other hand is much harder - so funding a good support program for local entrepreneurs is always a much better investment.

Additionally, many incubators offer some additional things, which are nice to have, but are not essential:

• access to free/cheap/discounted services at the start of the business life (legal, accounting, incorporation, social media marketing…)

• awards from business competitions (annual contest to award a few thousand euro/dollars for startup capital, etc…)

• ability to introduce entrepreneurs to funding opportunities (a friendly angel investor who is able to meet with them, a person good at writing EU grants…)

For most of these, having informal connections to people you can call should be more than enough. More on this later.

Understand there are three types of future entrepreneurs that need completely different support

In the context of running a business incubator, entrepreneurs should be split in three categories, and treated accordingly. These are:

1. People starting a small business because of a need

   Imagine someone who worked as a teacher in a local school and has been laid off. They might decide to pursue their own freelance tutoring business as a way to make ends meet. They would prefer to be employed, but have no good alternative to self-employment. For those kinds of entrepreneurs, the incubator must be a safe space where they can learn everything necessary to manage their small business - how to legally incorporate, how to invoice clients, best practices in finding and keeping customers, personal promotion and financial management. It is not a good idea to ask them to think about their scaling plan and creating investment pitches, it is a distraction and demotivating. The mentorship intervention for them should be simple and down to earth - looking for ways to find enough clients to survive as soon as possible, and providing support because times will be tough for a while. Mentors should be there to provide accountability and help them be as proactive as possible in sales (which will be their biggest challenge).

2. People starting a business because of a vision (might be called potential startup founders)

   Imagine someone who is an expert in their field and came up with a unique solution to a problem they had in their job. They were thinking about this for many months and are now considering turning that into a product and offering it to other potential customers. Or imagine a local farmer that sold generic dairy products to a farmers collective and now wishes to earn more by creating a brand of premium local cheeses and selling it to the end customer directly. For those kinds of entrepreneurs, the incubator must provide the basic business education on how to test if a business idea is viable on the market and then to guide them as they quickly prototype it into an early product. After that, the incubator must provide them the support and mentorship to develop it as best as possible and set up a successful business model. Often times, after the first validation phase, these entrepreneurs will rely on the network of the incubator for finding cofounders, contractors, partners, resellers and funders. The mentorship intervention for them should focus on creating an ambitious vision, grounded in an achievable timeline, then supporting them with introductions to the right people. Mentors should be very critical about their early business ideas and challenge entrepreneurs to iterate until they are absolutely sure they are on to something and generally be warning them of potential mistakes.

3. Youth/students testing things out that want to learn how a business is started

   Imagine a curious student or young person who is not really sure what to do in their future career, but has heard about business and considers trying it. For those people, the incubator should offer a sandbox where they can learn about the methodology behind starting a small business and can actually try it out for themselves. Typically, incubators who engage with young, potential entrepreneurs, do this by organising school entrepreneurship courses, hackathons, startup weekends or similar events where it is fun and risk-free to try something out. The mentorship intervention for them should focus on the fun of it and skill transfer. It is absolutely not important what business idea they choose to test-drive so mentors should just ask them to try as many ideas, even stupid ones. Mentors should generally be optimists and talk about possibilities and opportunities. It should not be expected these ideas will survive more than a few months, but instead that entrepreneurs will learn so much, and get motivated to try again later with a more serious idea.

Additionally, be mindful not to confuse a startup with a small business. A 55-year old lady doing embroidery and selling it as a hobby on Instagram is not a startup, even if she is highly ambitious. A startup is a business that has potential for exponential growth, usually relying on some novel insight, technology or innovation. There are thousands of books and open source methodologies on how to start a startup, which are great - but are not useful for someone whose only ambition is to earn a few thousand euros a month with their skills. Thoughtlessly using the startup methodology from Silicon Valley for such small businesses will not be effective.

So, how to make the best possible support system for entrepreneurs in a business incubator?

The program of a local business incubator

It is easy to think that just offering as many workshops as possible will have an effect, but that is not completely true. The journey of an entrepreneur from just thinking about maybe starting something to running a profitable company follows a series of phases and the support program should reflect that. Support activities should be organised through the year in a series of interventions aimed at guiding the entrepreneurs through all the steps necessary for success. This should be imagined as a funnel, with a lot of potential entrepreneurs on the top, getting basic information and advice on starting out, followed by more concrete instruction on testing and developing their idea, so some of these people can decide to commit to an entrepreneurial journey, and finally to the newly established businesses getting individual mentorship support for growing their small companies. All activities should link to one another. After every workshop or seminar, participants should be invited to the next activity in sequence - with the expectation that after completing all of them, they will be able to survive on the market on their own.

Best practice shows there are a number of interventions that should be done periodically over the course of a single year. Here is a rundown of educational activities that should be offered in an incubator setting:

1. Monthly or bi-monthly seminar on how businesses start (for the general intake of new entrepreneurs)
   
   The local incubator must have regular introduction seminars where the local community can come and learn the basics about being an entrepreneur, as well as an overview of what the incubator offers. There are two purposes to this. Firstly, people who were not exposed to the business world yet should be given an overview on what entrepreneurship is so they can decide if this is for them, and hopefully, get motivated to try it out for themselves. Secondly, this is an opportunity for the incubator to sell itself to the local population. Such a seminar is often called a “motivational workshop” with the explicit aim to bring more people in the incubator. It typically lasts less than an hour and is delivered by the most engaging mentor in the incubator, or an established local entrepreneur. It should be followed up by an informal meet and greet where participants are given the chance to individually talk to the incubator team/facilitator and the organiser should gather the contacts of all participants to invite them to future events. These events should be occasionally held at local schools, universities, etc. The goal of this should be to reach as many people in the community as possible, and to search for new potential entrepreneurs.
   
   This is the main recruiting activity of the incubator and should be done about once a month and promoted heavily. It is far better to spend money on advertising and/or social media promotion to promote this seminar than to buy general ads about the incubator. It is a great idea to hold these seminars together with the community meet-ups (see below). This will give a chance to anyone interested in joining the incubator to meet the team and also interact with the existing community.
   

2. Periodic business crash course/academy (to teach the basic steps on how to start a business for those willing to try)
   
   One of the biggest challenges for future entrepreneurs is that they do not know what to do to start a business. Conventional wisdom will often lead them astray as they will think they must spend a lot of money to develop a really good product, then after everything is done, spend even more money to start selling it. This usually results in them trying to sell something nobody wants, and wasting a lot of time doing things like designing business cards, getting legal advice for incorporation and dealing with problems that will not be important until they actually become sustainable companies.

   They should be taught the basics of quick product testing by talking to potential customers immediately, then guided as they test their product until they know their business idea works. The job of the incubator is to help the entrepreneurs by offering a regular “crash course” or “business academy” for beginners which teaches them the basics of entering the market so they are able to develop their product or service and start selling. This should be a fully practical workshop lasting for a few weeks or even a month where entrepreneurs are encouraged to try their business out for real by trying to secure a preorder or a first sale. This workshop should be delivered by an experienced entrepreneur. It is often best to hire an outside speaker, a professor at a university, an investor at a venture fund or a proven facilitator.
   
   This should be the flagship program of any local incubator, offered a few times a year - whenever there is enough prospective entrepreneurs to form a good group. The course should cover the basic steps from the initial business idea to testing it on the market, finding early customers and creating a sustainable (small) business. An example of this type of workshop is available here.
   
   While it is tempting to create a “pre acceleration” program lasting a few months that includes other content like digital marketing, legal, fundraising and other topics, this should be avoided. Entrepreneurs at such early stages are very new to things and will be uncritical to the content provided - and if they see 20% of the course is dedicated to fundraising or legal for example, they will think they must spend 20% of their time fundraising or writing up legal documents. This will be to the detriment of what is really important at the earliest of early stages for a business, to find new customers, make sales and create a sustainable business. Such topics are better suited for regular community events (described below) and the main general business workshop should only focus on the foundational knowledge.
   
   Ideally, every incubated entrepreneur should complete this business academy before entering the incubator (either as a member or renting a space in the incubator). It should be the default practice of the team running the local incubator to invite prospective entrepreneurs who reach out to the incubator with a request for help to sign them up for the upcoming batch of this workshop. After the entrepreneurs graduate from this course, they should be invited to join community events, receive notifications of future seminars that might be relevant to them, compete at business competitions for funding and be given a chance to tap into the mentor network of the local incubator.
   
   It should be noted that this course should be joined by the managing team of the incubator as it offers the best possible insight into the entrepreneurs and their business prospects. Knowing the needs of the local entrepreneurs will allow the team to be much more effective in helping them.
   

3. Regular community events (meet-ups, fireside chats with entrepreneurs, happy hours, business breakfasts, etc. to maintain a community)
   
   Every experienced business incubator manager will tell you that the most important thing for a successful operation of an incubator is a healthy community of entrepreneurs. If it is not fun to visit the incubator, people will not come. If the community is vibrant and friendly, it will attract new members. If the entrepreneurs establish connections and become friends, they will encourage each other and persevere longer, even if chances of failure are high. So when it comes to community events the most important thing to understand is that making the events pleasant is more important than what the events are. Of course, a local incubator will consider setting up a speaker series, or a regular happy hour, perhaps a business breakfast where a specially chosen speaker will come, but equal time should be dedicated to thinking how to make these events fun and exciting.
   
   If the incubator has a venue to do this in-house, that is great. But it is often better to do such events at a local pub than to hire a conference room. There should always be time dedicated for the informal meet and greet after the speaker is done. This is the time when entrepreneurs will freely discuss what they are working on and random connections will be made.
   
   The other thing to consider is that such events should be regular. Most often, incubators decide for monthly events. It makes sense to have speakers come or even to conduct workshops on specialist topics (like the aforementioned fundraising talk by an investor, or a lecture by a business lawyer), but it is completely okay to have events without a formal program and just organise a community happy hour. It is also a very smart decision to send an email invitation to these events to all past speakers, the entire mentor pool and the local business community. Not everyone will show up every time, but some will. It might take a while for the community to form, but if done regularly, after a few months, the results will pay off in many unexpected ways.
   

4. Annual showcase or presentation (to provide an opportunity to celebrate the graduation of those who finish the program and a forum to connect with the broader business community)
   
   The last part of the programming in a local business incubator is an annual showcase or a presentation of the businesses active in the incubator. Often times, this will be in the form of a small business pitch competition where the local community will give prizes to the most promising teams. This is an important part of the incubator program, and not just for the PR value and the chance to show the financial backers the results. If done right, competitions or showcases like these are a great opportunity for the entrepreneurs to connect with key partners or future customers.
   
   Like with the community events, the actual pitch contest, if it exists, is the least important part. All the entrepreneurs in an incubator should take full advantage of the opportunity to speak on stage and present their company to local movers and shakers. The goal of this event is not to simulate an investor pitch and pretend the tiny companies in an incubator are investable and ask for angel funding. They will not get it. Instead, such an event will not be hard to promote to the Mayor, the big company owners in the region, the important decision makers, local entrepreneurs, and many other influential people in the community - and the incubator must make sure they are all there. The entrepreneurs should make a presentation to explain what they do and what kinds of customers or other help they are seeking, and they will probably find people in the audience who will approach them. Many good incubators know this and ask their entrepreneurs who to invite.
   
   As a final note, announcing this showcase several months in advance is a great way to create an artificial deadline for entrepreneurs starting out - they will be motivated to show some kind of result on stage and will work harder because of it.

All of these activities must be systematic and feed into one another. Encouraging entrepreneurship is very similar to creating a talent pool for professional sport. If we want to have an olympic champion, there will need to be many local clubs where kids can train the sport, and a bunch of regional, amateur, semi-professional and elite national competitions to find and nurture the best talent. The sports terminology would call this a talent pyramid. The business incubator should follow the same principle. A lot of people should take part in the easygoing motivational workshops, and a smaller number then go on to the more serious business academy. Those who complete it and wish to pursue business more seriously, can be given additional support by the incubator - mentorship, office space, etc.

How to organise mentorship in a business incubator

Maintaining a pool of mentors is one of the most important activities for a business incubator. They are able to help entrepreneurs by sharing practical advice, discussing and solving potential problems and making useful connections. An incubator should strive to have a wide pool of mentors from the local community who are willing to help early stage entrepreneurs.

Setting up a mentorship pool is easier than one might think. Fortunately, businesspeople and entrepreneurs are usually very happy to pass their knowledge on to the next generation and many see this as their responsibility. Most businesspeople will therefore be more than happy to join - as long as they have the time and you do not make it too much of a hassle or demand too much.

It is best to keep these mentorship relationships informal, without contracts or discussions about how many hours per month they will dedicate to the incubator. Asking mentors to be available for a set amount of time on a regular basis is much more difficult than asking them to be willing to talk to an entrepreneur over the phone or meet with them when needed. Also, a business incubator should not pay mentors. This sets a bad tone to the relationship and attracts the wrong type of mentor.

There are two types of mentors a local business incubator needs:

1. Business generalists willing to spend time with entrepreneurs starting out

   Every business incubator should have 4-5 experienced entrepreneurs who are capable of having a critical discussion about a new business idea with an entrepreneur, both supporting them when they brainstorm how to make an idea work, as well as taking the role of an experienced colleague and reminding them of possible pitfalls. Their main job is to be available to the entrepreneurs for any kind of general, strategic advice, visit the incubator on occasion, join the community events, and be responsive via email when entrepreneurs have a question for them. Typically, they will meet with the entrepreneurs more than once, establishing a friendly relationship.
   The organiser of the incubator should spend a lot of time finding these people and establishing a personal relationship. The best type of person for this role is either an entrepreneur who has recently retired or a business owner with great interpersonal skills willing to interact with other entrepreneurs and talk about their business ideas. Ideally, that is a person who likes to “talk shop” in their spare time and genuinely considers talking to young entrepreneurs as a hobby, not a work responsibility. They should be asked to drop by the incubator regularly as guests at community events. They should be considered the most important people in the community and acknowledged and thanked for their time at events.

2. Experts in certain topics willing to help pro bono when needed

   The second category of mentors are domain experts. Think social media managers, digital marketers, lawyers, accountants, branding experts and the like. For these, an incubator must create a long list covering all the domains that touch upon the early business life of entrepreneurs. The agreement with these is to be available to take calls from the entrepreneurs or the incubator and be open to an hour-long pro bono consultation when an entrepreneur needs advice. It should not be expected these mentorship relationships will go much deeper than that. They should expect to gain value by having a source of future clients out of the incubator. Also, the incubator can work with them to organise workshops (free or paid) that can serve them for promotion and customer acquisition.
   The organiser of the incubator should look for local companies offering these services then reach out with a request to be available. Again, most will say yes because it makes sense to them and it should be relatively easy to bring them on board.

Avoid engaging mentors who do not have personal business experience. It is not possible to offer good business advice unless you are a company founder yourself. People who work for chambers of commerce, in entrepreneurship agencies, consultants, middle managers, accountants or lawyers who do not have any other business experience or haven’t started some other company, are usually not good mentors, even though they can often be the most eager to help out.

How to find and recruit mentors

To find mentors, start by looking at members of other business organisations like trade associations and chambers of commerce. Then make a list of well known good businesses and existing entrepreneurs in the region. This is useful in any case as it makes sense to invite these people to events in the incubator. Aim for about 50 names. For a small incubator dealing with 20-30 entrepreneurs, 4-5 generalist mentors should be more than enough. So email and call every name on the list and ask them for help with the entrepreneurs in the incubator. Tell them you will make sure the mentorship relationships will be stimulating and that you will make sure you respect their time. The ask for them should be to come to an event and get introduced to the working of the incubator, and then ask if they would be willing to sit down with an entrepreneur sometime in the future if needed. Discuss with them what kinds of businesses they are interested in mentoring and what expertise is needed. You should have no problem selecting five good mentors with real business advice, and you will probably get a mix of people from various sectors. Connect them with the entrepreneur only when the latter explicitly needs mentorship support. Let that connection be the start of a more “formal” relationship. If all works well, you can then discuss with the mentor if they are willing to repeat it.

The key to having a good mentor pool and motivated mentors is preparing the entrepreneurs for a good mentorship relationship. This is done by teaching the entrepreneurs some rules for working with the mentor. These are discussed individually before making the intro, as well as including this topic in the intro seminars and the business academy. The advice is relatively straightforward:

• the entrepreneurs are in the driver’s seat of the relationship. This means they will reach out to the mentor with questions, be proactive with asking for help, follow up and follow through

• the entrepreneurs will be respectful of the mentor’s time. This means they will be prepared for the mentor sessions with questions and will try to take advantage of the expertise the mentor that cannot be googled or found elsewhere, and that they will take the advice seriously

• the entrepreneurs will say thank you. There is an expectation of treating the mentor well, so that they have a great experience, which is important for all the entrepreneurs in the community because a happy mentor will gladly help other entrepreneurs as well.

Apart from that, it makes sense for the incubator to establish ties with other key actors in the entrepreneurial ecosystem. There do not need to be any formal agreements, but it is certainly necessary for the leadership of the incubator to personally know the representatives of other business organisations in the community, neighbouring incubator, the national entrepreneurship agency, the local conference organiser, the local angel investors, as well as most prominent businesses and startups in the region. They should be invited to the incubator’s events. The goal here is not to have them become regular visitors, but just to know the team at the incubator and be willing to pick up the phone when they call. They should be open to meet with the entrepreneurs in the incubator if asked, or to make introductions on their behalf. That is more than enough.

Do not make this process bureaucratic. Do not use any applications, instead have the entrepreneurs arrange everything with the mentors the “old fashioned way.” Mentors hate busywork nor is it their job to submit reports or deal with another tech platform. Their time is valuable, so it should be 100% spent on mentoring. If there needs to be a report for mentor relationships for any reason, it is the responsibility of the entrepreneur to prepare it. Having the mentors to sign contracts, monitor hours or submit reports is the most sure-fire way to lose them.

After a while, committed mentors can become indispensable parts of the incubator team. There are numerous examples of mentors taking on more responsibility in incubators or bringing in new mentors. This is why it is important to manage the mentor relationships, talk to them on a regular basis, invite them to a thank you dinner every so often, send them gifts or similar. If done right, a local incubator should have no problems with mentors.

How to be a good mentor

It makes sense to have some guidelines on being a good mentor, which can be emailed to every mentor that is going to be introduced to an entrepreneur from the incubator. Also, the team running the local incubator will be in constant contact with the entrepreneurs and because of this they will be pulled into the mentorship role as well. So here are the basic principles that underpin a fruitful mentor relationship:

1. The mentor should be responsible with their advice. The mentor is experienced in the process of starting a business, because they have done it before. The entrepreneur, on the other hand is the domain expert and knows the product or service they are offering, and the market they are operating in. It is the job of the mentor to defer to the entrepreneur about technical matters, but it is the job of the entrepreneur to defer to the mentor about the steps needed to market a product. The mentor should exercise judgment and constraint with advice.

2. The mentor should do everything for the entrepreneurs, but noting instead of them. It is excellent if the mentor is willing to brainstorm with the entrepreneurs, even to co-create things, but it should never be expected for them to do anything instead of the entrepreneur. They should encourage entrepreneurs, but not be the parent who makes sure something was done right. It is also completely right and proper for the mentor to tell the entrepreneur that what they are asking the mentor to do can be done by themselves.

3. The mentor should also support the entrepreneur on a personal level. This does not mean becoming a therapist, but because novice entrepreneurs are doing something for the first time, they do not need only advice, but also encouragement and confidence. The mentor should take time to explain that business is hard and that getting early customers takes a long time, and that things go wrong along the way. Often times, because of their business experience, mentors can and should tell the entrepreneurs that it will all be okay.

4. The mentor should never have a personal agenda of any kind. They should be there to help and convey knowledge, taking the role of the supporter and not the decision maker. They should take the time to understand the motivations of the entrepreneur and help them achieve that.

5. The mentor should be willing to make introductions and connections. They should open doors within the local business community and help the new entrepreneur establish the necessary professional connections for future success.

For mentors who work with entrepreneurs for longer periods of time, which is particularly true for the team in the incubator, it is useful to consider the mentor is always wearing four hats, and is always jumping between them:

• Teacher: the mentor knows things in business that the entrepreneur does not and they are able to point the entrepreneurs in the right direction in most business situations. This can range anywhere from how to pick a good accountant to what is the best platform to run ads on.

• Coach: the mentor should hold the entrepreneur accountable and encourage them to execute and meet deadlines. This can be a good-hearted discussion over a drink to commit to a new idea, to a more stern talking about meeting deadlines and having discipline.

• Older brother/sister: often times, things will be hard and scary. In some cases, it is the role of the mentor to provide the confidence the entrepreneur does not have. Someone to tell them everything will be okay, or to let them know that they will be on their side if it looks like someone is trying to take advantage of them.

• Friend: lastly, the mentor should also be the person to buy a beer to celebrate a success, or comfort the entrepreneur when something did not work.

It is beyond the scope of this piece to discuss this in more detail, but it should suffice for everyone working in an incubator to be mindful that all four are needed within the core community in the incubator for the support system to work. Missing any one of these within the incubator community, the entrepreneurs will be far less successful.

What should be taught in an incubator

There are two things an incubator must strive to teach to its’ community. First, the general steps to start a business (testing the idea, the iterative approach, user testing through prototypes), and second, the specialised skills and topics that deal with particular elements of a business (setting up a website, running ads…). Sadly, when it comes to this, most incubators focus too much on the latter and ignore the former.

It is really easy for an incubator to prepare a very full program with all kinds of seminars like TikTok marketing, preparing a term sheet, using no-code to build applications, and of course all the buzz word seminars like how to make money with A.I. and crypto. While it is okay to have a variety of speakers and content for the community events, the organisers should really stick to the basics and try to only offer seminars that are directly necessary for the current batch of entrepreneurs. If there are a lot of entrepreneurs trying to sell their local produce to supermarket chains, it makes total sense to set up a course on B2B sales and invite a purchasing officer to talk to them, but trying to do a seminar just because it is currently trendy might be risky because it can lead entrepreneurs astray, and certainly won’t have the desired effect. The golden rule should be to always wait for a clear need for a particular topic before jumping ahead and dedicating resources to it.

In broader terms, the educational goals within a local business incubator should be to teach the entrepreneurs the value of an iterative approach and trying to get out of the building and in front of customers as soon as possible. Teaching sales, and the general sales-oriented mindset is therefore always a good idea. Be mindful that everything you wish to teach can be obtained online, so the “softer” skillsets are more useful. A workshop on skills like goal setting and time management might have a bigger impact than, say, a how-to guide for a task management tool like Asana.

Similar to this, the local business incubator should avoid topics that are not relevant to very-early-stage companies. Two examples for this are international scaling and raising venture investment. While there is a need to learn both of these subjects at some point in the journey of a large company, the tiny businesses within a local incubator are certainly not there yet. Thinking wistfully about what might be and focusing time and energy on strategising about a global expansion or preparing an investor deck if you are a freelance jewellery maker only takes time and energy away from finding new clients. It will have a direct negative effect because it will slow down company growth and distract the founders. If there are not enough actual startups with growth potential in an incubator, such topics should not be offered.

In the future, the incubator can and should evolve to offer services for later-stage companies as well, but this should be driven by the needs of local entrepreneurs. Building a support ecosystem for entrepreneurship does not start on the top by establishing a venture fund, but rather on the bottom, nurturing a business community that might, over time, produce more and more startups - and eventually, there might be enough of them to start considering the creation of an investment fund. It only makes sense to offer support for later-stage entrepreneurs when there is a critical mass of them in the region.

Best practices for rules and policies of the incubator

In many places it will be necessary to have a formal incubation agreement or contract for incubated companies. While I fully understand the need for this, it should be understood by all parties that the entrepreneurs will naturaly consider this very bureaucratic and find all reporting a burden. All policies should be created with this in mind.

Some considerations about renting offices in an incubator: first, any rent agreement should be time-limited. For example, entrepreneurs are not allowed to be renting an office in an incubator for more than two years - after that time they should either be able to afford their own space or shut down the company. The purpose of an incubator is to support new and up-and-coming businesses, not subsidising local entrepreneurs. And second, the incubator should never have all the spaces rented out. When a new promising team shows up and needs a room, the incubator should be in a position to take them in immediately.

The contract for the incubated company should be simple. If they are also renting an office, the entrepreneurs should be made to understand they are entering a community and everyone hopes they will take part in its’ activities. Entrepreneurs should never be forced to attend events or seminars, but should be gently encouraged to take part in the happy hours and informal gatherings, and the management team of the incubator should dedicate time to introduce everyone new to the community. Any and all reporting that is done should be kept to a minimum and unless there is a very good reason to do so, all hi-tech digital reporting or mentorship apps should be avoided. Do it the old-fashioned way, as it works best in a community setting and does not cost anything.

While it says so on paper, there should be no hard cut-off for a team to stop using the services of an incubator after the “incubation period” is over. Sure, they might be asked to find an office elsewhere, but they should still be given the opportunity to take part in the events and attend seminars. If there is capacity, advice, services, introductions and anything else an incubator offers should be provided freely even to non-members under the assumption that helping an entrepreneur is always a good idea. Likewise, allowing an unincorporated student team with a good idea to use an empty office for a few weeks without signing a contract should also be okay.

As a rule, every new member company of the incubator should take part the core educational program (the business academy) when they join. This is to make sure the basic methodology of starting a business is taught, but also because it serves as a first and important touchpoint with the mentorship team in the incubator. During this time they should be taught how to manage mentor relationships (see above) and be encouraged to take part and actively contribute to the community. All member companies should also take part in the end-of-year showcase in front of the community.

I will not touch upon the questions about manners and reasons to kick someone out of the program for bad behaviour, but instead it has to be pointed out that one of the worst offences entrepreneurs can do is to be unprofessional towards an outside, volunteer mentor. Not showing up to a meeting, running late, disregarding agreements with them is making it very difficult for that person to agree to help others and is directly detrimental to the working of an incubator. Such cases should be dealt with quickly and repeated offences sanctioned.

In conclusion, the important thing to understand here as an organiser is to stay in touch with the member entrepreneurs on a regular basis. Certainly, there should be a conversation, call or at least an informal chat every week with every team. It is not important how this is done and what reports are written. The team managing the incubation program should be aware of what is happening with their entrepreneurs so they can run the program and respond to their needs. That way most issues can be resolved quickly. Assign people to this task if needed.

The team managing an incubator

Many successful business support groups are completely volunteer-run by people working full-time elsewhere. The size of the team managing the incubator is not important, if it is focusing on the right things. The key tasks every team should focus on are the following, in order of importance:

1. Managing the community of entrepreneurs: being in touch with every team and making sure the introductions to mentors and other stakeholders are made when they are needed. Personally making sure every team has what they need and inviting entrepreneurs to community events and happy hours.

2. Managing the educational program of the incubator: creating a timeline of the program and all the activities, including the regular business academy program and all other seminars, meet-ups or other activities. This includes selecting speakers, promoting the events, setting up the venue and posting pictures from the events on social media.

3. Managing the mentor pool: recruiting, communicating with and maintaining the relationships with mentors. Personally making sure every mentor is satisfied and willing to continue working with the incubator.

4. Managing the relationship with the funders and other stakeholders: this includes everything from staying in regular touch with the funding organisations to doing PR for the incubator.

5. Managing the facility of the business incubator (if it exists): self explanatory.

Typically, a local incubator will have two or three full-time employees. In this case, the two main entrepreneur-facing roles should be the head of programming in charge of setting up the educational program of the incubator, all the seminars and workshops, who will also take the majority of responsibilities for mentoring the entrepreneurs, and the community manager, in charge of arranging informal events, maintaining relationships with mentors and outside partners, who will also personally interact with the entrepreneurs both within the incubator and in the broader community. Ideally, the head of programming is someone with business experience who will be confident in assessing the needs of entrepreneurs and preparing a program that will be suited for them. The community manager can be someone more junior who has experience in organising events, running an association or an NGO and has excellent people skills. Together, these two should be able to manage an incubator serving anywhere up to 20-30 entrepreneurs.

The incubator should hire lecturers/facilitators to deliver workshops and dedicate an annual budget for this. There should be a reasonably large unpaid mentor pool, but a person on staff (the community manager) should be responsible for managing it. This structure is usually much better than hiring an additional person full time to work as an in-house mentor.

The costs of running a business incubator

Excluding costs of the facility and the cost of salaries, a business incubator delivering the program outlined above, will require the following annual budget (prices given for a country roughly in the EU average):

• Cost of 10 introduction presentations about business (travel costs included) - 4.000EUR

• Cost of two business academies (speaker fees included) - 7.000EUR

• Cost of 10 community events (snacks and drinks included) - 5.000EUR

• Cost of end-of-year event (venue and food/drinks) - 2.500EUR

• Budget for the community (occasional drinks, etc.) - 1.500EUR

• Maintaining the mentor network (visiting mentors, recruiting, gifts) - 3.000EUR

• Promotion (materials, online presence) - 5.000EUR

• Misc. supplies (gifts, hoodies, t-shirts) - 2.000EUR

• Other operational costs (transport, etc.) - 4.000EUR

Total annual cost of the program: 34.000EUR

This should serve as an approximate guide for planning a budget of a local incubator providing support to about 20 new entrepreneurs every year.

Business incubators are neither profitable or sustainable

It is usually not possible, or desirable, to charge a fair market price for the services provided to early-stage entrepreneurs, and its’ impact in new job creation or company growth is typically not seen for years to come, if at all. So it is basically impossible to expect for an incubator to have a profitable business model, and they are never self-sustainable. Don’t try to fool yourself you can do this, or promise your funders you will achieve this. It will not work.

Nobody in the world (that I know of) has been able to create a successful business model that would not rely on government money, grants or donations. There are a few cases of successful accelerators that make a profit from investing into the companies they support (like Y combinator), and a tiny fraction of large incubators or technology hubs that are somewhat profitable because they run their own conferences, events, or offer revenue-generating educational services, but these usually needed decades to establish themselves and are based in a large city (and even they were usually started with large initial funding or a passionate team that moved mountains to make it all work). All of these are extreme outliers and not at all representative when considering local incubators.

Over time, most incubators turn into grant-seeking organisations and run EU financed projects and try to fund the “core” incubation service out of those - and sadly, after initial money runs out, many have a really hard time maintaining effective support for early stage entrepreneurs. This should be avoided by making sure the key program activities are always written into any funding or project proposal the incubator might be considering. There are numerous incubators investing tons of project money in fancy telephone booths, smart conferencing hardware, pingpong tables and attractive co-working spaces, only to find out they are not nearly as effective in helping entrepreneurs as regularly hosting a series of well thought-out community events, and become a major burden when project money runs out. Do not seek funding for things that are not directly helping entrepreneurs.

Conclusion

This guide hopes to be a practical overview for anyone running a local incubator or trying to set one up in their region. It was inspired by 15 years of working in the entrepreneurial ecosystem in Europe, the Balkans, Latin America and U.S.A., and personally visiting over 200 different incubators, teaching classes to entrepreneurs there and talking with the management teams. The key takeaway from all those visits is that incubators spend too much money on their facilities and equipment, but not enough on the community and the educational program for the entrepreneurs. Most incubators have a dedicated budget for their programs, but often it is not spent thoughtfully enough, with funds going towards unnecessary activities and are teaching content that is not directly useful to early-stage entrepreneurs. Following the approaches outlined above, incubators should be able to both decrease their operational costs and increase their impact.