Incubator in a Startup Studio: How It Works
We’ve transcribed the fifth episode of our podcast. The guest is Vadim Ananiev, head of the incubator of the ADP startup studio.
What an Incubator Is inside the Startup Studio
The incubator at ADP is a place where ideas accumulate. We divide them into categories and, over time, try to develop into full-fledged businesses that could bring some benefit to the parent company, stepping up the core business.
Why would teams ever come to us for training if they believe that the unit economics adds up as it is and the plan for moving forward is clear?
In this case, experience prevails and comes out on top. The economics might make sense if you only analyze data from two users. But how will it go when scaling up?
We ask the applicants simple and reasonable questions: who the target audience is, what the market capacity is. And we often hear tired tropes like “Our audience is everyone from 5 to 70,” which indicates there was no in-depth model research. And it might as well trigger a collapse in the perspective.
An average of 14 teams out of 16 leave in the process of training. But the remaining two will be expanding their focal point. They’ll know their target audience, the customer acquisition cost, and this is no small thing. Moreover, teams will take a look at the ADP and see how it works, which helps them understand if they can collaborate in perspective.
How you can get into the Admitad Projects incubator
To get into our incubator, you need to send in an application where you describe briefly your idea and team. If you get us interested, we will invite you to a 6-week training at Hogwarts, our school for startup founders.
During training, we analyze the team: how it works, how it interacts within our company, how communication goes. We see if the startup folks can keep up with the deadlines and goals they’ve set themselves. Based on the results, we either offer them a spot in our incubator or not.
Selection criteria: How to succeed at your first Interview
In 99% of cases, the idea is not unique, whether it’s yet another one chatbot builder or some type of analysis system with some Very Important Stats.
To sell the idea, you need to describe your advantages over existing solutions clearly. You should be able to answer basic questions, such as “Describe your target audience in detail”, “Explain where you got all these numbers”, etc. Don’t forget to provide links to statistics and analytics, supporting documents, and other materials.
The next point that helps us determine if a startup is launchable is that the founders have enough time to develop it. The “I work at a factory until 6 pm and then carve out an hour for my startup” option is not what we’re looking for. Remember that we’ve got no salaries in our incubator, so you’ll have to last for two or three months on your hard-earned savings. Why?
It’s because we teach you everything you need, ideally, to become a unicorn company. We won’t put you on a salary to see if your idea works out. It’s important to have a mutual understanding of that. Lots of startup folks don’t understand what they are doing, who they are doing it for, and why this project is needed in the market. But they still expect to succeed.
On average, only 5 out of 100 teams can answer correctly to the questions above. And it’s a common number. These guys understand exactly what and whom they are launching for, or they have already launched and started making money. They need our studio to scale and go from $20,000 a month to $2,000,000.
How to Evaluate if the Project Is Effective
First of all, exponential growth. Yesterday you had 10 customers, in a week you had 100, in a month you had 1,000. This shows that the market is interested in your idea. If it’s not profitable yet, you can always get analysts involved to create a business model and build a money-making machine.
By comparing monthly metrics, we can see the project’s growth prospects. But be careful: a 10—15% increase for a startup is nothing. For a large company, maybe, but not for a groundbreaking idea. The normal figures are multiples: ×2, ×3, ×5, and so on.
And, of course, one more important thing is your target market. Even if your project only covers a few percent of it, market size of $1 billion and more leads to some serious figures. Obviously, it’s better to aim at the global market so that you have possibilities for scaling up. If you are working on some unique tech, why not share it with the whole world?
Let’s Sum It Up
If your idea is already working, or it’s very prospective and scalable, but you don’t have enough experience to implement it,apply to the Admitad Projects incubator. Don’t forget to prove your calculations with figures from reliable sources!