Start-up incubator i.lab is launching an online business validation program to select companies for its development program, which aims to nurture scalable businesses with a high commercial return.
It coincides with a new CEO, strategy and a recent change in ownership at i.lab, whose operations are now overseen by the University of Queensland (UQ).
The Queensland-based incubator was founded a decade ago, when the Queensland Government sought to provide low-cost office space and resources for a diverse range of start-up companies.
However, the mandate was too broad and in August last year, the Queensland Government handed over i.lab to UQ.
i.lab will narrow the range of companies it works with, to specifically focus on high-value, scalable businesses, according to CEO Colin Kinner, appointed in May this year.
"It was intended to be a low cost tool for helping as many early stage companies as possible," Kinner said. "I don't want to be critical of it, because it was successful in doing what it did but it wasn't focused on working exclusively with high value businesses."
"We're thinking a lot more like a venture capital fund than an economic development program and moving much more towards being a focused program that works with companies we believe have the capacity to grow rapidly and become valuable businesses."
The main criteria are that companies have to have a scalable technology and business model ("it doesn't have to be the next Google") and the concept needs to be mature ("shouldn't be an idea that you came up with in the shower that morning").
These filters will be applied by the online business validation website, to be launched in January next year. Over three months, prospective businesses will answer a range of questions aimed at identifying whether they have the right stuff to join the incubator, he said.
"It's an intensive period of time when we work with the founders of the company, and look at three to four questions such as, do they have a scalable business, and what's the competitive environment, product and funding needs?"
"If we come to the conclusion they don't have a business we'll part ways."
i.lab provides low-cost office space as well as business development resources and services for early stage start-ups.
It works with about 20 companies that are 90 per cent IT-based, and while the number of companies will remain the same, the IT representation could drop to about 50 per cent, as it looks to emerging areas such as clean tech.
He said it will be fairly "hard-nosed" about the types of companies it works with.
"Just because a company wants help, and we could help it, that's not enough. If we see that a company with our help and external funding, could be really serious technology business, then we'll get involved.
"We'll reject companies that aren't a practical fit."
He said a major theme would be "fast failure".
"I think something that we'll be doing a lot more of is if we have companies that don't have what it takes to grow, we'll encourage them to fail quickly," he said, adding that really what entrepreneurs wanted was a viable business, not life support.
The government continues to fund part of i.lab's operating costs, which are about $2 million a year, he said. The remaining costs are covered by fees charged to the businesses that are part of the program.
It has worked with over 110 businesses in the last decade, and helped them secure more than $70 million in investment and grant funding.
It doesn't invest in the businesses, but in the future Kinner envisages that i.lab could start to take equity stakes in companies.