According to Co-Founder Dhruv Bhatli, UBI Index’s incubator rankings are designed to “help business incubators become more efficient and competitive by comparing them with leading incubators” globally. In the process, UBI Index help institutions improve their planning and business operations.
The research also benefits startups themselves explains co-founder Joel Eriksson Enquist in a press release. “A crucial piece of our analysis is looking at the monetary side of the equation, such as sales revenue levels by particular Incubator clients and access to funds, which are important for new ventures.” In addition, UBI Index points to their research serving governments and investors too, by identifying where the best prospects are incubating in sectors ranging from biotechnology to energy.
UBI INDEX’S METHODOLOGY
To rank incubators, UBI Index relies on a proprietary framework created by Bhatli and Eriksson. Honed from extensive research and reviews from over 30 leading incubation experts, the index assesses incubators according to three categories and seven sub-categories. They include “Value for Ecosystem, which encompasses a company’s impact on the local economy and talent base; “Value for Client,” which consists of an incubator’s access to funds, excellence in training and support, and network strength; and “Attractiveness,” which involves a company’s performance after incubation and its appeal to potential investors and buyers.
The sub-categories are also composed of more than 60 weighted KPIs (Key Performance Indicators), which includes quantitative data like annual revenue, jobs created, IPOs, and investment and qualitative dimensions such as the quality and quantity of coaches, mentors, services, and deals. Variables like incubator type, ecosystem, age, and business sector are also factored into the rankings.
As part of its ranking process, UBI Index examines over 800 incubators worldwide each year, eventually whittling down to 300 worthy of being benchmarked. It is the only index to scrutinize incubators from the five populated continents, including the burgeoning markets of Africa.
WHAT MAKES A TOP INCUBATOR?
According to Bhatli, economic impact is rewarded in UBI Index’s rankings, particularly in light of an incubator’s resources and the difficulty of its ecosystem. However, he adds that incubators must also emphasize “skill development…access to the marketplace…and access to capital.” Most of all, incubators must steer companies to a high survival rate, with cutting-edge products and services that disrupt the market.
“This year,” Bhatli notes, the companies that ranked high “consistently performed well across all the indicators.” In particular, the top incubators differentiated themselves in three ways. First, Bhatli observes, the top incubators are part of an inherent ecosystem. “They are not trying to replicate something else like Silicon Valley. Each ecosystem is so specific in its own way and unique in so many ways.” Second, Bhatli emphasizes that the best incubators “adapt” to entrepreneurs and customize their services to them. Finally, the tier one incubators are self-reliant, often operating like new ventures themselves. “They are not relying on public money,” Bhatli declares. “They make their own self-generated revenue. They are lean programs like a startup.”