Blurred Lines: Incubators, Accelerators and Coworking

BLURRED LINES:
INCUBATORS, ACCELERATORS & COWORKING

NATE CURRAN
ENTREPRENEUR-IN-RESIDENCE
@NATECURRANAZ

GREG BULLOCK
MARKETING SPECIALIST
@AZBULLOCK

T H E C E N T E R F O R
ENTREPRENEURIAL INNOVATION
(CEI) IS A BUSINESS INCUBATOR
THAT SUPPORTS TECH-BASED
COMPANIES IN THE BIOSCIENCE,
MEDICAL DEVICE, CLEANTECH
AND SOFTWARE-AS-A-SERVICE
INDUSTRIES AND AT ANY STAGE
OF DEVELOPMENT. ITS MISSION IS
T O S U P P O R T I N N O VAT I V E
ENTREPRENEURS WHO ARE
S C A L I N G C O M PA N I E S T H AT
CREATE QUALITY JOBS FOR THE
GREATER PHOENIX REGION.
STRATEGIC GROWTH PLANNING
AND INDUSTRY-SPECIFIC MENTOR ASSISTANCE
WET LAB & OFFICE SPACE
FURNISHED, AFFORDABLE AND FLEXIBLE
DISCOUNTED PROTOTYPING
ONSITE 3D PRINTING AND DESIGN SERVICES
COMPETITIVE INTELLIGENCE
SOPHISTICATED MARKET & COMPETITOR RESEARCH
BLURRED LINES: INCUBATORS, ACCELERATORS & COWORKING PHX STARTUP WEEK | FEBRUARY 26, 2016
WWW.CEIGATEWAY.COM

INNOVATION
THROUGH INCUBATION
COURTNEY KLEIN | SEED SPOT
(PHOTO COURTESY OF AZCENTRAL.COM)

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MOST NON-PROFIT AND
ECONOMIC DEVELOPMENT FOCUSED
NETWORK OF INVESTORS
AND OTHER SERVICE PROVIDERS
LONGER GESTATION
CYCLE (ONE TO FIVE YEARS)
SERVICE-BASED WITH
FACILITIES AND OTHER AMENITIES
SPECIFIC INDUSTRY
FOCUS (TECH, SOCIAL, ETC)
GRADUATE OR FAIL
(CRITERIA-BASED EXIT)
WHAT MAKES
A BUSINESS
INCUBATOR?
INCUBATORS

OUTDATED AND/OR INCONCLUSIVE RESULTS ABOUT
THE OVERALL SUCCESS RATE OF INCUBATOR CLIENTS
DIFFERENT FACTORS IMPACT BUSINESS SURVIVAL
(TEAM, MARKET, ETC.)
MOST STUDIES INDICATE THAT MEMBERS HAVE
IMPROVED ODDS AT FUNDING
SOME PROGRAMS PROVIDE MEANINGFUL SUPPORT;
OTHERS ARE “GLORIFIED OFFICE SPACE”
NUMEROUS RECENT SUCCESS STORIES LOCALLY
(PAPER CLOUDS APPAREL, VISIONGATE, GLOVE TREAT)

ADVANCEMENT
THROUGH ACCELERATION
WILEY LARSEN | ARIZONA STATE UNIVERSITY
(PHOTO COURTESY OF YSCOUTS.COM)

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MANY PRIVATELY FUNDED
WITH GOAL OF RAPID SCALE UP
COMMONLY ASSOCIATED WITH
SOFTWARE COMPANIES
SHORTER, FINITE
TERM BASED AROUND COHORTS
TYPICALLY OFFER DIRECT FUNDING
FOR COMPANY EQUITY
DEMO DAY OFTEN SIGNALS
COMPLETION OF THE PROGRAM
WHAT MAKES
A BUSINESS
ACCELERATOR?
ACCLERATORS

RECENT PHENOMENON (2005) DOMINATED BY BIG
PLAYERS, E.G. Y COMBINATOR, TECHSTARS
EARLY ESTIMATES ARE CONSERVATIVE AND SHOW
PROMISING RESULTS; LACK OF COMPREHENSIVE DATA
HIGH GROWTH FUNDING (SERIES A) LINKED TO
MEMBERSHIP IN ACCELERATOR PROGRAMS
IS IT JUST A PSEUDONYM FOR STARTUP INVESTMENT
PARTNER?

JENNY POON & ODEEN DOMINGO | CO+HOOTS
(PHOTO VIA THE SOCIAL BOOTH / CO+HOOTS)
CONNECTION
THROUGH COWORKING

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LESS STRUCTURE AND
FOCUS ON BUSINESS DEVELOPMENT
MOST OFFER DESK SPACE
AND OTHER OFFICE AMENITIES
MIXED MEMBER BASE
ACROSS DIFFERENT INDUSTRIES
UNIQUE PURPOSE
(COLLABORATION VS. TRANSITION)
UNOFFICIAL COWORKING
SPACES ARE BECOMING ALL THE RAGE
WHAT MAKES
A COWORKING
SPACE?
COWORKING

FREELANCERS, SOLOPRENEURS HAVE FUELED THE
COWORKING MOVEMENT
HIGH PERCENTAGE ARE HAPPY WITH THEIR
COWORKING SPACE AND IN THEIR LIFE
TRANSITIONAL, POP-IN SPACES ARE A GROWING NICHE
WITHIN THE COMMUNITY
STUDIES SHOW THAT GREATER PRODUCTIVITY IS
REPORTED AMONG MEMBERS
ARIZONA ON THE MAP FOR COWORKING AND
CONTINUES TO BREED NEW SPACES

CORPORATIONS,
ACADEMIC
INSTITUTIONS
“SUPER”
INCUBATORS
EXECUTIVE MENTOR
PROGRAMS
STARTUP
COMPETITIONS
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INCONSISTENT
MESSAGE
RESOURCE
CONFUSION

EVERY STARTUP EXPERIENCE IS
UNIQUEFAR FROM PERFECT, IN NEED OF INTERNAL AND EXTERNAL RESOURCES
THROUGHOUT ITS LIFECYCLE AND RELIANT ON NUMEROUS FACTORS FOR
ITS ULTIMATE SUCCESS. IT IS UP TO YOU AND YOUR TEAM TO DETERMINE
WHAT MAKES SENSE FOR YOUR BUSINESS AT A PARTICULAR TIME.

YOU SHOULD CONSIDER THEY MIGHT EVALUATE COWORKING CRITERIA
þ  RESOURCE ALIGNMENT
þ  RECORD OF SUCCESS
þ  COST AND/OR EQUITY
þ  POST GRADUATION OR
COMPLETION
þ  ONGOING REQUIREMENTS
þ  CULTURE FIT
þ  COACHABILITY
þ  SCALABLE IDEA OR
BUSINESS MODEL
þ  ECONOMIC IMPACT
þ  TEAM
þ  LOCATION &“CURB”
APPEAL
þ  COST
þ  AMENITIES
þ  HOURS OF OPERATION
þ  CAPABILITIES FOR GROWTH
þ  CULTURE & NETWORKING
SELECTION PROCESS

BECOME FAMILIAR
WITH ALL THE
RESOURCES AND
AMENITIES
TIPS FOR ENGAGEMENT
1 3 5
2 4
BE ONSITE AND
EXPERIENCE HALLWAY
“MAGIC”
UTILIZE MENTORS &
ADVISORS
PROACTIVELY
“KNOW THY
NEIGHBOR:” NETWORK
& INTERACT
LEVERAGE THEIR
MARKETING REACH &
COLLABORATIVE
SPACE

TIPS FOR ENGAGEMENT
6 8
7 9
ATTEND WORKSHOPS
AND SEMINARS
ACCESS ALUMNI
NETWORK AND POST-
GRADUATE RESOURCES
REQUEST VALUABLE
INTRODUCTIONS THAT
WILL BENEFIT YOUR
BUSINESS
NEVER MISS A MOMENT
TO PRACTICE TELLING
YOUR STORY

STARTUP TIMELINE

OTHER QUESTIONS
HOW DO I KNOW IF I’M READY?
IF YOU KNOW YOU NEED HELP AND ARE COMFORTABLE ASKING FOR IT, YOU ARE READY.
IF YOUR BUSINESS IS AT ANY STAGE BUT ESPECIALLY AT A CRITICAL POINT IN ITS LIFECYCLE, YOU ARE READY.
IF YOUR GARAGE IS NO LONGER A VIABLE BUSINESS ADDRESS OR MEETING SPACE, YOU ARE READY.
IF YOU ARE IN NEED OF FUNDING AND YOU ARE WILLING TO BE PATIENT AND COACHABLE, YOU ARE READY.
IF YOU HAVE NO IDEA WHAT THE HELL YOU ARE DOING, YOU ARE READY.
HOW MUCH WILL IT COST?
IT DEPENDS. SOME CHARGE A MONTHLY RENT FOR SPACE & MEMBERSHIP; OTHERS CHARGE A PROGRAM FEE. SOME OF THESE CAN BE AT
A PREMIUM AND OTHERS MAY BE AT OR BELOW-MARKET BASED ON SUBSIDIES FROM GOVERNMENT OR OTHER PUBLIC AGENCIES. SOME
ARE SOLELY FOCUSED ON EXCHANGING FUNDING FOR COMPANY EQUITY.
MANY PROGRAMS ALSO PROVIDE BASELINE SERVICES AND OFFER OTHER PAY-FOR-SERVICE RESOURCES TO ITS CLIENTS, WHICH MAY OR
MAY NOT BE DISCOUNTED. THESE ONGOING COSTS CAN VARY.
LASTLY, SOME ENTITIES HAVE POST-GRADUATE COSTS, E.G. SUCCESS FEES (AGREEMENT TO DONATE OR GIFT FINANCIAL COMPENSATION
AFTER ACHIEVING CERTAIN MILESTONES) AND WARRANTS (PERCENTAGE OF GAIN REALIZED AFTER SUCCESSFUL EXIT)
WHAT IF I CANNOT AFFORD IT?
MANY PROGRAMS HAVE FLEXIBLE PAYMENT OPTIONS AND THERE ARE GRANT / AWARD OPPORTUNITIES THAT COULD SUBSIDIZE A PORTION
OF THE FEE. NUMEROUS FREE RESOURCES, SUCH AS THE SMALL BUSINESS DEVELOPMENT CENTER (SBDC) NETWORK AND SCORE ARE
AVAILABLE AS WELL.

OTHER QUESTIONS
DO I NEED TO WORRY ABOUT PROTECTING MY INTELLECTUAL PROPERTY?
THE MAJORITY OF INCUBATORS AND ACCELERATORS HAVE SPECIFIC GUIDELINES AND SERVICES REGARDING INTELLECTUAL PROPERTY –
STAFF NDA FORMS, MENTORSHIP AGREEMENTS, IP AUDITS AND STRATEGIES, ETC. ACADEMIC INSTITUTIONS AND CORPORATE PROGRAMS
ALSO HAVE RULES FOR TECHNOLOGY TRANSFER TO DETERMINE THE MANNER IN WHICH A STARTUP CAN PURSUE THE COMMERCIALIZATION
OF ITS INNOVATION. COWORKING SPACES DO NOT TYPICALLY OFFER SPECIAL GUIDELINES FOR IP.
IN ADDITION, COMPANIES THAT PREFER TO OPERATE WITH A LOW-PROFILE CAN REQUEST IT NOT BE CITED IN MARKETING OR OTHER
INITIATIVES. HOWEVER, MOST PROGRAMS WILL INCLUDE AGGREGATE IMPACT (JOB, REVENUE, INVESTMENT) DATA FOR ALL OF ITS CLIENTS.
HOW CAN I PREPARE MY COMPANY TO BE SELECTED?
BE OPEN AND HONEST ABOUT YOUR STRENGTHS, NEEDS, AND CHALLENGES AS A COMPANY AND HOW YOU FEEL YOUR BUSINESS WILL
BENEFIT FROM ITS RESOURCES. FOLLOW THROUGH ON DELIVERABLES AND TASKS. INCUBATORS AND ACCELERATORS OFTEN REQUIRE A
PITCH PRESENTATION OR INTERVIEW, SO INVEST THE TIME TO PREPARE FOR IT.
IS THERE A NEGATIVE PERCEPTION TO ENROLLING?
YES AND NO. SOME FUNDING GROUPS LOOK TO BUSINESS INCUBATORS AND ACCELERATORS AS A FORM OF DUE DILIGENCE FOR WELL-
VETTED COMPANIES; OTHER OUTSIDE ENTITIES MAY DOWNGRADE A COMPANY BECAUSE IT IS PERCEIVED AS SHOWING WEAKNESSES OR
GAPS, PARTICULARLY IN LEADERSHIP.
DO PROGRAMS HAVE AN MINIMUM AGE REQUIREMENT?
NOT REALLY. PROGRAMS LOOK MORE AT BUSINESS SPECIFICS AND OVERALL LEADERSHIP AND EXECUTION ABILITIES WITHIN THE TEAM,
WHICH MAY OR MAY NOT BE A FUNCTION OF AGE. ADDITIONALLY, MANY OFFER YOUTH-BASED (MIDDLE SCHOOL, HIGH SCHOOL, COLLEGE)
PROGRAMS DESIGNED FOR YOUNGER DEMOGRAPHICS.

OTHER QUESTIONS
HOW MANY EXIST IN ARIZONA?
THERE ARE 15+ ENTITIES THAT RUN INCUBATOR AND/OR ACCELERATOR PROGRAMS, WITH AS MANY AS 34 CITED BY THE ACA. FOR
INSTANCE, NACET (BASED IN FLAGSTAFF) MANAGES THREE INCUBATORS (NACET, CHANDLER INNOVATIONS, MARICOPA CENTER FOR
ENTREPRENEURSHIP) AND AN ACCELERATOR IN NORTHERN ARIZONA.
COWORKING DATA IS HARDER TO ESTABLISH, BUT THERE ARE AT LEAST 15 SELF-DESCRIBED “COWORKING” SPACES ACROSS THE STATE
AND NUMEROUS UNOFFICIAL HANGOUTS FOR ENTREPRENEURS; ACA LISTS AT LEAST 40 IN ARIZONA. SEVERAL, SUCH AS CO+HOOTS
AND GANGPLANK, OFFER MULTIPLE LOCATIONS.
DO YOU ALL GET ALONG WITH EACH OTHER?
NO COMMENT… JUST KIDDING

PHOENIX IS SELF-PROCLAIMED THE MOST “GENEROUS” ECOSYSTEM, AND WE ALL RECOGNIZE THE UNIQUE VALUE AND DIFFERENTIATORS
OF ONE ANOTHER. A RICHER EXPERIENCE FOR THE ENTREPRENEUR IS GOING TO BENEFIT THAT COMPANY IN THE LONG RUN.

ARIZONA INCUBATOR RESOURCES DOWNLOAD THE PRESENTATION
MORE RESOURCES
INFO.CEIGATEWAY.COM/
PHXSW2016

REACH OUT
WITH YOUR QUESTIONS
CURRAN@CEIGATEWAY.COM
BULLOCK@CEIGATEWAY.COM
WWW.CEIGATEWAY.COM
@CEIGATEWAY
275 N. GATEWAY DRIVE
PHOENIX, ARIZONA 85034
602.286.8950

SOURCES
HTTP://BOSS.BLOGS.NYTIMES.COM/2013/08/12/ASSESSING-THE-IMPACT-OF-BUSINESS-INCUBATORS/
HTTPS://WWW.MAXWELL.SYR.EDU/UPLOADEDFILES/NEWS/BOONORBOONDOGGLE.PDF
HTTPS://WWW.LINKEDIN.COM/PULSE/BUSINESS-INCUBATOR-RENAISSANCE-NOW-KIRSTIE-CHADWICK
HTTP://WWW.SLIDESHARE.NET/VRYZHONKOV/THE-STARTUP-FACTORIES-THE-RISE-OF-ACCELERATOR-PROGRAMS
HTTP://TECHCRUNCH.COM/2012/11/27/ECONOMIC-IMPACT-OF-STARTUP-ACCELERATORS-1-6B-RAISED-4800-JOBS-CREATED-2000-STARTUPS-FUNDED/
HTTP://WWW.HUFFINGTONPOST.COM/JEFF-FERMIN/11-INCREDIBLE-COWORKING-STATISTICS-THAT-WILL-MAKE-YOU-LEAVE-YOUR-CUBICLE_B_6466440.HTML
HTTP://COWORKINGMAP.ORG/STATS/
HTTP://BLOG.SQWIGGLE.COM/COWORKING-TRENDS-STATISTICS/
HTTPS://HBR.ORG/2015/05/WHY-PEOPLE-THRIVE-IN-COWORKING-SPACES
HTTP://AZTECHBEAT.COM/2015/09/COFFEE-COLLABORATION-AND-CO-WORKING-AZ-CO-WORKING-GUIDE/
HTTP://BLOG.COWORKING.COM/BLOG/2014/01/26/7-STEPS-TO-SELECTING-A-COWORKING-SPACE/
HTTP://MASHABLE.COM/2013/06/11/STARTUP-ACCELERATOR-GROWTH

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