This is second part of a Business Incubation Models series. It will be devoted to a Smilor’s model (1987).
Smilor model (1987)
This model was developed by Smilor in 1987 by refining Campbell’s model (1985). Smilor created structure model via describing main incubator affiliates, support systems and description of main outcomes of the incubation process. He considers an incubator as a transformation mechanism that assist entrepreneur in building a venture. Even though the representation of the model doesn’t provide extensive information about particular services that business incubator supplies to tenants, Smilor categorizes the benefits that business incubators provide to their tenants through four dimensions:
- Credibility development.
- The shortening of the learning curve.
- Faster troubleshooting.
- Access to the network of entrepreneurs.
Smilor was one of the pioneers in 80s who shifted the viewpoint on incubators (from provision of physical resources to the business expertise and services provision).
Smilor (1987) emphasizes that business incubator is a system which is constructed from different building blocks (support systems) and it seeks to identify the different components of the new business incubation process. The model was developed and proposed having in mind typical innovation-based entrepreneurs (which is not always the case for an incubator). It conceptualizes the incubator as a system that gives incubatees the structure and credibility for the creation of new firms while ensuring a set of immediate, key resources for the setting up of the new undertaking. However, the systemic approach, encompassing the internal and external environment, seems to be lacking in Smilor’s (1987) model, as well as description of the process of transformation which happens with entrepreneur inside.
Short characteristics of the model
|Source (Author, Year):||Smilor, 1987|
|Purpose of a model:||To show that business incubator is a transformation mechanism in which industry, government and university are interrelated|
|Type of a model:||Structure model|
|Theoretical background:||Cambell’s model (1985)|
|Resources:||Support systems (secretary, business expertise, administrative, facilities), incubator affiliation|
|Processes and practices:||
Key success practices are:
|Efficiency and effectiveness:||Clearly stated outcomes of the business incubator: profits of tenants, economic development of an area, job creation, profits of business incubator, successful products, technology diversification.|
|Linkages “Entrepreneur – Business Incubator – Innovation Ecosystem”:||Strong emphasis on the external perspective, neglecting the internal one (entrepreneur’s process and incubation process).|
|Key contribution:||Business incubator as transformation mechanism which provides links between industry, government, university.Clearly stated outcomes of business incubator.|
In my opinion, this model is still very relevant and important for the industry. Mainly because, it concentrates on the main stakeholder of the incubation process (entrepreneur) and his/her needs. The entrepreneur’s credibility, faster learning and experimentation are the most important factors in the very beginning of a venture life cycle. That’s why incubator’s support in this domain is very important. Take an example of business accelerators (a very popular model nowadays). We could name plenty of them such as TechStars, Y Combinator, DreamIt Ventures, 500 Startups. Most of them have built the programs around the mentors and wide networks of contacts in industry. These programs have taken characteristics mentioned by Smilor and advanced them.
Additionally to the entrepreneurs’ benefits mentioned by Smilor I would insist that incubator’s management should consider and possibly organize the program depending on main entrepreneur’s needs. This list includes in the early stages of a venture life cycle:
- Knowledge & Information
- Concentration and focus, self-motivation
- Dedicated personal resources to venture (time, money, will, relatives support)
- Personal mentoring
- Market validation of an idea
- Relevant connections (industry, experts, investors, etc) Relevant connections (industry, experts, investors, etc)
- Expertise to solve particular problems (access to mentors, experts, investors, entrepreneurs)
- Feedback mechanism for self-learning
- Opportunity (problem) recognition
- Team building (finding relevant team members, selection high-quality people, formation of optimual size team and retention)
 Smilor, R. W. (1987). Managing the Incubator System: Critical Success Factors to Accelerate New Company Development. IEEE Transactions on Engineering Management, Vol. 34, No. 4, pp. 146–156