Bevation – A canary for corporate incubators?

A few weeks ago, my attention was drawn to a small post within Gruenderszene – that of the quiet exit of Bevation, the incubator hosted by Bertelsmann. The exit was so swift, that even the landing page has by now disappeared into cyberspace. This article, coupled with a previous editorial on the same site highlighting the harsh downsizing of other smaller private incubators in 2013 made me speculate where the fortunes of the corporate incubator lay for 2014 and beyond. Was Bevation the proverbial canary for the Old Economy Corporate Incubator as an industry, or was it more as an exception than the rule?

To be fair, the aims and objectives of Bevation had all the makings of a corporate PR exercise, with words such as “innovation”, “exchanging ideas”, “providing insights” liberally interspersed within their vision. My experience has shown that more vague the objectives, the increased likelihood that you will fall short of those objectives. In addition, although Bertelsmann did provide space, facilities and mentoring it stayed away from capital investment. Given that they have a lot of prime real estate in Berlin this would be a cheap way of getting into the startup scene and checking it out, with limited risk. My hunch is that as corporate priorities changed, and management didn’t see any “wow” outcomes interest withered to the point where the validity of its existence itself was challenged. Notes posted on the website of incubated startups such as Snoopet point to this situation. Management was perhaps expecting the next Google or Facebook – what they got were a few startups, some with even unclear business models.

Will this be the same fate for the other corporate incubators? Many of them are doing a lot more, including investing badly needed seed capital in their startups. However, at the same time all of them do need a few heralded and publicized exits (or at least “BIG story”) to validate their approach and business model. In the end it all boils down to some hard decisions – why are we doing this? Is it for revenue, image… or something else (and this something else better be tangible!). If revenue – are we giving the unit sufficient runway to achieve this rather than a quarter by quarter evaluation approach? If image/ PR/ branding – have we achieved this, and is this achievement recognized and aligned with the interest of the management?

My gut feeling is that those that can objectively answer these questions will survive; perhaps even emerge stronger (and better supported) than ever. Those who operate in a wishy-washy environment may be better of in taking heed to the message of the canary…