It seems like nowadays there is almost a daily announcement about the creation of a lab, a hub or innovation incubator. Solely in the U.S, there are more than 3,500 incubators and accelerators compared to 12 back in 1980. Labs and Incubators are not limited to one industry and can exist within pretty much any sector, from medicine to finance.
Building internal labs and incubators is similar to creating an institution. For instance, a lab would still be considered as a part of the enterprise but would have its own unique environment and working atmosphere. Typically, these kinds of projects are aiming to experiment with innovation trends and in the end, they would be able to deliver new products or services. This 'creative island' is usually isolated from the corporate space in order to make developers feel comfortable.
Innovation is all about generating new ideas and introducing them to the world. However, a core of it is delivering the right product to the customers, bearing in mind their needs and interests. The purpose of labs is to identify ideas that solve important customer problems and also apply design thinking, agile, and lean startup methods to make it happen.
Integration of internal incubators and labs is one of the ways in which to do business inside a larger company. Even successful entrepreneurs can run out of ideas and start looking for inspiration elsewhere. Thus, executives often consider options like internal business incubators and innovation labs, places where innovation is born and ideas generated.
One of the most successful examples of incubators is based in Pasadena, California - Idealab. The company was started in 1996 and its aim is to find good ideas for new businesses and then recruit people from outside to complete projects. Successful incubators take a bigger cut of the company than accelerators, usually starting from 20%.
The Labs are working on different projects, including some in very early experimental phases and others which are fully developed and ready to be incorporated into the main product family. One of the most important features, regardless of the project stage, is the fact that they are all focused on the customer. The eventual aim is to successfully graduate and become a part of the wider company.
Unlike the groups which are only assigned a single task or problem to solve, innovation labs create a unique ecosystem, where a collective approach can be used for problem-solving as well as product development. This allows a team to test capabilities and hypotheses and deploy faster iterations while ensuring all parties have a shared understanding of the problem.
One of the most powerful elements of incubators is that they bring people together from different disciplines and then create a team where everyone is involved. However, in some aspects, it may create challenges because an incubator's work doesn't always mix well with the existing business processes, which sometimes creates a tension between those working in the incubator and those following more traditional procedures.
Successful incubators and labs will always make sure that there are ongoing communication and education happening within its space as long as there is no conflict between the innovation team and the rest of the corporate team. It may seem difficult establishing a new business and operating it in a larger company, but if done correctly, it will have a positive impact and provide a number of opportunities for the future.