How Business incubators help expand local economies

EHL Editorial Team | 7 Dec, 2015

In the past 10 years, there has been an enormous rise in the number of business incubators worldwide. If the United States were the champions in helping entrepreneurs create sustainable companies, Europe has finally caught up and exhibits equal per capita number of company factories. The growth of incubators in Europe owes much to government support, but industry leaders have increasingly become involved in assisting entrepreneurs create viable companies which benefit the wider business community.

 Most of the many structures and organizations dedicated to supporting entrepreneurship that exist in European countries focus on high-tech industries (biotechnology, IT, life sciences, etc.). Very few of them focus on support for the services sector in general and especially the hospitality industry. One might think that this reflects a lower failure rate in this sector due to a lower level of risk and, therefore, that entrepreneurs who engage in this field need less support, but that is certainly not the case. Indeed, the rate of failure in the services sector is very high: about 50% of companies disappear within the first five years of operation.

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On the strength of its more than 120 years of experience and its pioneer spirit, EHL decided to create the first Business Incubator entirely dedicated to the Hospitality industry. The final aim of our Incubator will be to help entrepreneurs to develop their projects and further than that; support them through the whole creation process of their startup. Our actual structure allows entrepreneurs and startups to be hosted on the campus and to benefit from all School facilities.

The Ecole Hôtelière de Lausanne also offers them access to its networks, including Alumni as well as the possibility to work closely with students and faculty members. In a close future, we look forward to developing and expanding the services within our business incubator. If business incubators traditionally offer a wide variety of services designed to fulfil the needs of early-stage entrepreneurs, like concept development, marketing strategy, business plan creation, etc., their role is ever evolving and their impact on local economies with it.

As a matter of fact, according to The National Business Incubation Association, 87% of incubated businesses succeed past the six year mark compared to only 40% for non-incubated businesses. 20px-Twitter_bird_icon.png  In recent years, these new dimensions led the EHL business incubator to also collaborate with engineers from EPFL, graduates of IMD, alumni, industry professionals, students, employees, etc.

Today, the CEO of the BookBedder Startup hosted at EHL, Skye Legon, shares with us his insights on what it takes for young entrepreneurs to have a positive impact on the hospitality industry:

EHL: According to you, what has been the most successful moment for BookBedder?

SL: Just getting BookBedder up and running has really been a success in itself. Creating a hotel booking site to rival major players like Booking.com requires enormous technical development, and deep knowledge of the industry. Collaboration and discussions with both EHL staff and students helped us get quickly up to speed.

EHL: What is the biggest difficulty that BookBedder has encountered until now?

SL: The hotel industry has a long tradition, and operates at a different timescale from startups. A startup can evolve rapidly in 6 weeks, while a hotel might suggest that we meet again in 6 months.

EHL: How the Ecole hôtelière de Lausanne - through its Business Incubator - helped you during the development of BookBedder?

SL: Networking and making the right contacts is key to a startup's success. 20px-Twitter_bird_icon.png EHL has been a valuable partner for BookBedder because it helped us reach many of our early hotel partners, and being present at EHL reassures them that we are working in their best interests. And of course the incubator is a very comfortable work environment: not many startups can say they eat as well as we do in the EHL food court.

EHL: What advice yould you give future Entrepreneurs?

SL: Don't quit your day job before you validate your business model. 20px-Twitter_bird_icon.png Make sure you've got a clear value proposition for your prospective clients, and try to get them to sign before you build the product. If you can get them to pay before you start development, that's even better.
 
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