Observation of "Iteration" in an Incubator: Xinze | Incubation | Incubator

Many years ago, someone went to work at a technology enterprise incubator and was asked if they had gone to raise chickens. At that time, people were not very familiar with incubators, and their main function was to provide space and consulting services to startups.

Since the birth of the first incubator in Shanghai in 1988, people have gained more knowledge and expectations about incubators. As an important bridge connecting research and industrialization, the level and level of incubators are crucial for accelerating the cultivation of technology leading enterprises. A question worth pondering - what kind of incubator do we need now to further accelerate technological innovation?

Jiefang Daily's Shangguan News reporter visited Zhangjiang Science City, which is the area in Shanghai with the most concentrated incubators, the most diverse incubation forms, and the most sound incubation chain. Among them, the Xinze Incubator, which has been deeply cultivated in Zhangjiang Science City for 13 years, is a significant observation sample: with a private background, incubating hard technology enterprises, and committed to becoming a joint initiator of scientific achievement transformation. And most importantly, it has been iteratively updating itself.

"Micro Innovation Power" Empowered by Services: Strive for the Ultimate in Every Step "

The establishment of Xinze Incubator in 2010 is now a watershed when looking back.

Previously, there were over 70 technology enterprise incubators in Shanghai, most of which were public institutions that extended government functions, while there were only 2 private incubators in total. With the opening up of private capital entering incubators, more than 10 private incubators emerged in this year. From then on, the originally small number of private incubators gradually grew, and now they have become the majority. According to the latest incubator data from Zhangjiang Science City, there are 102 private enterprises, 26 state-owned enterprises, and 22 foreign-funded enterprises, and the operating entities have shifted from state-owned enterprises to market dominance.

Xinze undoubtedly seized this opportunity. Founder Qu Yi has worked in state-owned incubators in Zhangjiang for many years. Coincidentally, Shanghai encouraged the development of private incubators, and she decided to start a business because there are still many unmet needs for technology entrepreneurship services.

"I am the number one waiter of Xinze," this is the first sentence that Qu Yi must say when introducing himself. Like other incubators, "service" is the first hurdle that Xinze has overcome. From patent application to financing advisor, and then to upstream and downstream resource construction, Xinze is already proficient. But what's different is that even with 8 incubation bases now, Xinze only has a service team of over 40 people.

Qu Yi's secret is "minimally invasive innovation", striving to achieve the utmost in every aspect. She always carries a piece of paper in her pocket and records everything she thinks of, which has now been compiled into a standardized service process. Today, holding an industry conference usually takes two weeks for pre meeting communication, but according to Xinze's standardized process, almost all details can be finalized in just a few days.

Service empowerment is the foundation for incubators to establish themselves. To meet the needs of startups and reduce their entrepreneurial costs, more innovative and growth oriented enterprises can stand out. This has never changed.

Stock Incubation: A "high-value incubation" that aligns with corporate interests

But even if we take the "butler style" service to the extreme, it will ultimately only be a "butler". To upgrade the incubator to version 2.0, it is necessary to upgrade its content.

Xinze keenly sensed the business opportunity of stock incubation. In 2011, which was the second year of Xinze's establishment, a company that had settled in Xinze faced a shortage of funds. Qu Yi not only advanced the rent, but also helped find discounted loans and venture capital. Therefore, the company actively invited Xinze to become a partner. In this way, Xinze embarked on the path of "stock incubation".

This was still a novelty in the incubators in Shanghai at that time. Now, this company has opened more than ten robot laboratories in Silicon Valley, with a valuation of 200 million US dollars. And Xinze invested 300000 yuan and later withdrew with 15 million yuan, earning back the first bucket of gold.

The transition from a "butler" to a "partner" has led to a new "incubation+venture capital" model gradually emerging. In 2015, Xinze was listed on the New Third Board and became the "first stock of technology incubators" in China. It now has two early angel investment funds with a total amount of 600 million yuan, directly and indirectly investing in 35 high-tech enterprises. Among the nearly 1500 companies it incubates, 2 are listed on the Science and Technology Innovation Board, 1 is listed on the New York Stock Exchange, and 1 is listed on NASDAQ.

"If extended for a long time, in absolute terms, Xinze's investment income accounts for about 40%, while rental income and service income each account for 30%." Qu Yi calculated an account for Jiefang Daily's Shangguan News reporter.

Xinze's choice has a leading demonstration effect in the industry. A set of latest data is a good confirmation - out of the 150 incubators in Zhangjiang Science City, more than 60 have invested in incubating enterprises through their own funds, participation or establishment of investment funds. Compared to 2016, the rental income of Zhangjiang Science City Incubator decreased from 70% to 50% of its revenue last year, while service income increased from 25% to 38%. The remaining 12% of its revenue came from investment income, financial subsidies, and other sources.

A few years ago, some people jokingly said that incubators are "second landlords", and it is not wrong to say that rental income has always been the "absolute leader". Nowadays, the rental income of Zhangjiang Science City Incubator has decreased to half, and the service and investment returns are showing a gradual growth trend. Overall, it can be considered that it has freed itself from the imprint of "second landlord" and upgraded to version 2.0.

"Stock holding incubation" enables incubators to form a "community of interests" with incubating enterprises, which can help enterprises better grasp market direction and connect with industrial development, providing a possibility for exploring "high-value incubation".

"Pre incubation": From "Valley of Death" to "Valley of Value"

After version 2.0?

To answer this question, it's worth reviewing the original intention behind the establishment of incubators. When Shanghai established its first incubator, the Shanghai Science and Technology Entrepreneurship Center, in 1988, its technological development was in a new growth cycle. It is precisely to strengthen the transformation of technological achievements into productivity that incubators have emerged.

Last year, Shanghai added an average of 294 new technology enterprises per day, accounting for nearly one-third of the total number of new enterprises in the city. The market has grown larger, and the initial mission of incubators to promote achievement transformation has not changed, but has also been endowed with new connotations of strengthening innovation strategies.

Xinze, who dares to be the first, has launched a new move - "pre incubation". "Pre incubation is when scientists come to our simulated entrepreneurial space to 'try marriage' before setting up a company. If it's suitable, we incubate it, and if it's not, we bear the cost of trial and error," Qu Yi told Jiefang Daily Shangguan News.

To find a good investment project, it has become a consensus among investors to first find potential scientists. Xinze has always been paying attention to cutting-edge technology, and in their view, the era of accumulation and development of biopharmaceuticals is approaching. However, many original works find it difficult to cross the valley of death. In the basic research stage, there is government funding support; At the stage of product and technology maturity, there is market-oriented funding support. However, in the concept validation stage of the "first mile" of achievement transformation, market resources are unwilling to enter due to high risk and uncertainty.

The "Valley of Death" is precisely the "Valley of Value" that has been overlooked for a long time. Xinze has established a fund for the "first mile" of achievement transformation, and linked deep expert resources, angel investment mechanisms, and high-level public technology service platforms.

"Having finished his six-year teaching career, he will officially debut tomorrow..." On the last day of 2020, Dr. Zhu Jidong from the Shanghai Institute of Organic Chemistry, Chinese Academy of Sciences, posted this Moment. After Shen Ze's pre incubation, he successfully founded Yituo Pharmaceutical, with an estimated market value of over 1 billion yuan.

Zhang Rong, a professor from the Department of Medicine at Peking University, also made his debut through pre incubation and entrepreneurship. Her autism classification diagnosis and treatment project received personalized services from Xinze. During pre incubation, not only angel financing was in place, but also a team was formed, greatly reducing the threshold for scientists to start businesses.

It is reported that this "pre incubation" model has been tested through more than 30 scientist entrepreneurship projects. Xinze plans to invest in 100 scientists in the next 5-10 years, hoping to discover innovative "seeds" of "nuclear explosion points" from them.

Building world-class incubators is part of Shanghai's efforts to build an innovative ecosystem. The smooth path of "transformation incubation industrialization" calls for continuous iteration and evolution of incubators, always maintaining technological sensitivity, and helping to transform scientific achievements. Having worked in the incubation industry for 13 years, Qu Yi's biggest change is that more and more high-end talents are joining the industry. "Breakthroughs in original technology will lead to new value cycles. Now is the best time to become an incubator, and it's quite exciting to think about it.".