The cultural and creative industries Getting started: the ABCs of the creative industry
We explain the most important terms used in the creative industry, including defining a start-up, what innovation means, and how an incubator differs from an accelerator.
A start-up is usually the very first step for any successful company in the creative sector. It refers to a newly established business, ideally founded to pursue an innovative idea. Many founders rely on external financial backers. Airbnb is an example of a very successful start-up: what began with a website and an air mattress in 2007 had developed into a company worth ten billion US dollars just a few years later. Very few start-ups experience this kind of meteoric growth though.
In the initial phase, most start-ups have very little capital to invest in infrastructure like office space. The ideal solution is a coworking space, an open-plan office where start-ups, freelancers and other creative minds share the infrastructure, often exchanging know-how while saving on overhead. In Berlin, for example, a spot in a creative office community is available for as little as 15 euros per day or 125 euros per month.
Engineers like to solve problems, it has famously been said, and if there are no problems handily available, they will create their own. Today this applies to the entrepreneur, the start-up founder working to identify and solve problems. Entrepreneurship stands for innovative ideas and the overall start-up scene. People interested in creative solutions to social and ecological issues often found social enterprises where the focus is not primarily on potential profit, but on mitigating social problems.
Innovation is the driving force behind start-ups and entrepreneurship. Derived from the Latin word for “renewal”, innovations are creative ideas intended to bring about economic and social change. The rising number of innovation competitions and the new field of innovation management are clear signs of the importance of innovative ideas - for social progress as well as for the economy.
Incubators promote start-ups by providing young entrepreneurs with infrastructure, mentoring and, ideally, contact with potential investors. Many incubators specialize in a particular area: the German Social Impact Labs specifically promote social entrepreneurs, while the Swiss Creative Hub focuses on business ideas from designers.
Like the name indicates, unlike an incubator, an accelerator focuses speeding up business development. It also provides financing and infrastructure to start-ups, but only for a limited period of time. The goal is to help start-ups scale up their innovative business models as quickly as possible. Accelerators are often operated by established technology groups. Dropbox and Disqus are examples of start-ups that went big with the help of an accelerator.
Start-up founders also have the option of kicking off a crowdfunding campaign to finance their idea. With crowdfunding, innovators present their idea to a wide range of mostly private investors via the internet. Any potential investors who like the idea can then donate, lend or even invest money in the start-up, depending on the type of crowdfunding campaign. The Dash smart earphones were made possible by crowdfunding.