Could an Online Startup Incubator Succeed?

The Idea:

Build a startup incubator that runs online. This incubator could leverage expert mentors all over the world while lowering the barrier of entry for founders and entrepreneurs (who would no longer need to move). Your talent pool wouldn’t be constrained geographically. Theoretically this gives you a huge talent advantage.

What makes an incubator great?

Nobody runs an incubator better than Paul Graham. Paul launched YCombinator in 2005, and many (myself included) would consider YC to be the best incubator worldwide. They aren’t perfect, but they get a lot of things right. After interviewing several YC alum I can confidently say YC’s biggest strength is their people network. Anyone can offer money to a startup but the connections that Paul Graham and company provide are simply unrivaled.

I asked Paul Graham (Founder of YCombinator) about an online incubator and he said:
“It would not work, at least not with current technology
for doing things remotely.  The kind of interactions the
startups have with us and with the other startups need
to happen face to face.”

Fair enough. Paul doesn’t think you could put a YC style incubator online and maintain the same quality experience. I would agree with his initial assessment, but I believe an online incubator that challenged our preconceived notions of how an incubator functions could flourish online.

Barriers to entry:

I asked Sanjay Parekh (from Shotput Ventures) his thoughts on an online incubator and he said:
“Personally I have a hard time seeing how this works – successfully. There
are just some aspects to early stage startup formation that you lose when
doing things online.

I think that a lot can be said about the real world
interaction. I know the startups that we (Shotput Ventures) have funded
have generally done a great job communicating over email but I also see
them regularly at either meetings they setup or randomly at events in town.
When that happens, I feel like I can brainstorm and help them a lot
faster than if I’m limited by the bandwidth between my brain, my hands, the
keyboard, and the Internet. The bandwidth between my brain, eyes, ears,
and mouth is tremendously more capable for these interactions.”


I’m stuck on the fence if an online incubator would work. I can’t shake the feeling that with the right people it could be wildly successful. I’m very interested in this concept and have been thinking about it for a long time. I’m eager to hear what you think in the comments.

Does anyone feel like blowing $20k on an experiment?

  • it could work.. but it will take close monitoring and extra communication and collaboration

    • That’s exactly my issue. Why would you do this online when it takes more communication and collaboration. When that happens, it’s better to resort to the original method since you can do more with less time.

      • Yes. Maybe in the future when there is faster internet access everywhere and better video conferencing and collaborative tools. Then it can be considered feasible

  • This is a really interesting idea. I doubt it’d work, though, because an hour in person is better than a dozen hours online when it comes to mentoring. That’s been my experience when mentoring TechStars teams.

  • is an online community that in some ways is acting as a virtual online incubator/accelerator, so in some ways it’s already being tried!

  • Interesting idea

  • Alex Alvarez

    I’m on the fence as well with the idea. My doubts relate to the “community-based environment” the incubators provide. There are others working around you on their own ideas so you don’t have that “alone/island fever” feeling whereas if it’s run online it’ll have the same experience as just having a mentor call you from time to time; after he hangs up you’re still somewhat secluded.

  • While I have no experience with incubators, my sense is that a large part of what they do is mentoring, which is something I do have a bit of experience with. There are a number of aspects that need to come together to form good mentoring, by breaking down each aspect it might be possible to understand why an online incubator might, or might not, be successful. Clearly, as people quoted in the article mention, the biggest hurdle is communications bandwidth between the mentor and the mentee and the bottleneck the internet would create.

    The first and primary aspect of mentoring is active listening. Active listening is the act of asking the speaker questions that confirm understanding of their message, help them flesh out what they are saying and to explore new areas of though that they may not have addressed. Personally, I find this easier to do online through a chat program than in person. By communicating through text, the pace of the conversation slows down enough that I’m given time to truly think through what I’m being told so I can ask smart and insightful question. At the same time, the pace of the conversation doesn’t slow down so much the train of thought and the thread of the conversation gets lost as it would over email. For this aspect of mentoring, I find the right type of electronic communication to be better than interacting in person.

    The second aspect of mentoring is to provide a sense of vision. For an incubator, the entrepreneurs should be providing the vision for their company, but the mentor has an important role in providing a vision of success for the startup team. As has been discussed on The Startup Foundry perviously, being an entrepreneur is a bipolar existence. In those deep valleys, when nothing seems to be going right and self-doubt starts to creep in, a mentor needs to step in to show the team there is a path forward. Providing this type of vision and support is very difficult to do online. It is simply too easy for the startup team to ignore electronic communications in all forms when they become disengaged. For a mentor to sound a wake-up call and put the team back on an upward trajectory, they have to be able to hold the teams attention in a manner that is not always possible online. For this aspect of mentoring, working face-to-face has huge advantages.

    A third aspect to mentoring is tactful confrontation. Even in person, this is the most difficult aspect of mentoring someone. No matter how tactful one is, it is easy for the mentee to become defensive and argumentative. When communicating through text, it is very easy for words to be misconstrued or for a joke that’s meant to sooth feelings to fall flat and only make things more difficult. While it’s possible to communicate over the internet verbally or even face-to-face with webcams, it’s still not possible to pick up on all the subtle non-verbal cues that good mentors take stock of when tactfully confronting somebody. Again, working in person is very advantageous when it comes to this aspect of mentoring.

    The final aspect of mentoring that’s important for an incubator is to provide information. This is quite simple and straightforward to do online. It’s much easier to provide information electronically so there is a permanent record of the information that can be referred to later.

    In the end, it’s very difficult to build new relationships online. Some of the key aspects to mentoring are fraught with peril when conducted online, while other aspects are actually improved by using the internet. For the best experience possible, you’d be wise to combine a mostly online incubator with some in-person gatherings.

    A good approach might be to have a week long “incubator boot camp” to forge the initial peer and mentoring relationships. Then, maintain and grow those relationships online and with periodic in-person get-togethers. However, with such a model, mentors need to be willing and able to hop on a plane to meet face-to-face for crisis management when needed.

    Coming from somebody who has no experience with incubators, it seems like it would be possible create one online given the right structure. I wish I had the $20k to throw away on such a risky endeavor.

  • +1 –> Vince Hodges basics of this is being done at

  • How well would running an online startup incubator work? I don’t know. I *have* done a lot of mentoring online in other contexts, and I’ve found that with face time biannually or quarterly it can work extremely well.

    What would make an online startup incubator rock? Access to talent that YC and the like will never see. I’ve stayed away from incubators because I have a family — moving to where the incubator is just won’t happen. I’ve met countless folks at tech conferences, Startup Weekend, etc. who feel the same way.

  • dylan

    I think a remote incubator could totally work, and for some entrepreneurs it might even work better. In some ways Hacker News could be seen as the preeminent online incubator.

    See also: subscription forums/courses like Micropreneur Academy

  • With the right people and incentives involved I’m confident that it would work. I’ve thought about this online concept too, and if I had the coin I would invest into one in a heart beat!

  • In the 1980s I was working in IT networking and the roll out of ISDN across remote areas of Scotland was seen a a hugely important step to get people in remote places online with a decent speed. In 1992 I wrote the UKs first guide to getting online, aimed mainly at the person at home on a budget. Both of those around 20 years ago. Whilst I greatly value face to face working (I run Agile web delivery teams) and can see the value in technology hubs, we must also recognise that the internet is the great opportunity for ideas to grow, irrespective of where the team is and whether they are round the block from the VC looking for the best return on their money. I welcome this concept and hope it succeeds. If anything, the access to incubator support online might give the more traditional face to face support networks in places such as Scotland’s Silicon Glen and elsewhere some much needed competition.

  • We had some promising success with an incubator-type program to accelerate start-up ideas leveraging community networks. We effectively “crowdsourced” feedback on startup ideas from a broad group of individuals who possessed diverse experience, knowledge and networks. This feedback was gold as it helped to better define the opportunity, identify potentially fatal flaws and opened doors to potential customers or partners. As curator of the program, I brokered both face-to-face and online meetings between the startup founder(s) with the idea and those in the online community who provided the “best” feedback. One of the lessons learned is to ensure the quality of the front-end startup ideas that applied to enter the program. This helped to build the “prestige” of the program and attracted higher quality individuals to get engaged and contribute feedback via the online community.

  • Surely, an online incubator is better than no access to mentors at all?

  • Mike Parks

    I’ve been thinking of this for some time now using immersive 3D world technology, which many (including myself) argue is the next best thing to “being there.” Actually sometimes better than “being there” since you can get many of the same experiential benefits without the hassle and cost of getting ready and traveling. Logging into the 3D virtual world site you would see and interact directly with the avatars of others who are also logged into the site. I’ve attended a number of meetings and conferences in 3D worlds and can say the experience is far better than any 2D webinar or video web conference I have attended.

  • Yes, please. I find it frustrating trying to start a company in an area that is not one of the ones typically considered a “hotspot” and seeing all of the investors, incubators, etc. that constrain themselves to a certain geography and/or insist that people relocate there to participate or get funds. I can understand certain markets and other criteria but we have the technology to collaborate online. Of course some are not as comfortable with this, they would not have to participate, of course. But I vote “heck yeah” 🙂

  • Anonymous

    Try Our goal is to build companies fast and also develop a local community.

  • Ao

    great read

  • My experience with mentoring is that social media complements but does not replace face to face. Also incubators provide more than access to mentors, like sharing space and inspiration with other entrepreneurs. Again, this can be supplemented with an on line community but I am not certain the intangible and other softer benefits of physical co-location will transfer to on line media. However, all of this is just opinion. Anyone know of any evidence or literature addressing this?

  • You have to identify mentors, investors, and startups who are not well served by either version 1.0 incubators (which focused primarily on providing low cost office space and a shared cost structure, for example in San Jose) or the version 2.0 incubators (which focus primarily on providng a small amount of seed capital and mentorship, for example YC, TechStars).

    The Startup Guild is an example of a peer to peer on-line incubator so there is at least evidence of unmet demand on the startup side.

  • I have to believe that a online incubator would be decent and probably okay. If it were to get a grade, it would probably get a B or B+ at best. So is that good? Yea! So that means that we will continue to get good companies or average companies. Most entrepreneurs want to be great, and this would possibly produce a lesser product. Many can produce a lesser product on their own. It is very hard to beat in person, face-to-face interaction. To me it’s like phone sex compared to in-person sex. Simply put, which would you rather have? Many would love phone sex, but it just is not better than the “real” McCoy!

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  • 1. People
    If the online incubator can convince mentors to provide both generalized and  project specific guidance as videos or posts or private messages, would be entrepreneurs might be willing to try it. Effective screening must be done in selecting the project and its people. The people involved should be able to get help from freelancers if they want to and every team should have a close relationship with their mentor.

    The incubator provides mentorship, connections and funding. The provision of a workspace is not the incubator’s responsibility. The incubator can have a special “desk” page for each of its projects where all members of the project contribute. If an online work environment can be created on the site, it might attract people to come work on it.

    Nothing drives creative people better than competition. The urge to succeed and to prove themselves as the better lot among the batch makes them work harder. This is hard to achieve on an online platform.

    Please right my wrongs and expand on my rights

  • Hey All! We are working on creating this. Check us out if you have any questions 🙂

  • delwilliams

    I think an online incubator can work since you there is Skype and Google Hangouts. The reason there is a need is because the face-to-face ones seem to marketing their space on how exclusive and elite they are. The translation I read to that is no minorities, women or people over 40. That may not be what they mean, but based on the hours upon hours of videos these incubators put out, I am not far off. It is a field of twenty-something middle-class White males. In this day of high tech and with 7 billion people on the planet, the lack of diversity is no longer acceptable. The exclusivity of the regular incubators seem to be imitating keeping out diverse groups with good ideas. An online incubator may be the key since color, gender, and age not as much a factor as long as product/service is viable.

    • Kenneth

      You are exactly right, and on point. Your reply was posted 6 moths ago, so I hope at this late date my response finds you. At The Urban Genius Foundation, we are building an online incubator that will more than likely find itself home to minority entrepreneurs. Wish I had a way you and I could have a conversation? You can find me on LinkedIn – Kenneth Coe

  • Tom Fitzpatrick

    I am currently building an online Incubator. Soft launch in December this year 2014. Its been a mission but our prototype is turning out to be pretty cool. We have built a Social Working Community. More productive with very effective filters and collaboration tools . Looking for a good Front End Developer to help with UI and another Support developer. Python, Django, HTML5 Javascript, CSS3, Jquery, Javascript MVC frameworks like Angular JS, NBackbone, Ember, Node.js (and modules like Grunt)

  • Bisade Karunwi

    I am actually starting an online incubator as we speak. We have found that the traditional incubator model can be fragmented and disrupted with the right model. I would like to have a conversation about this. Get in touch at