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A Job Creating Incubator & “Collaborative Commerce”
December 8, 2011 - Ernest Hohmeyer
I wonder if it is time to consider a job creating incubator.
But before you think you may have heard this idea before - it may not be what you think it is.
Traditional incubators were buildings that fledgling businesses rented below market space, shared office equipment and sometimes office staff. They were usually individual businesses started, funded and operated independently from each other. In some cases, they shared industry similarities such as “high-tech.” The Village of Saranac Lake for example has been discussing a “bio-tech incubator.”
Old Words – New Models
Sometimes these incubators are next to hospitals, universities or where appropriate ideas can become fodder for entrepreneurial endeavors. We heard some of this when Trudeau Institute was considering their long-term planning.
Incubators are supported through a wide variety of ways. Companies, universities, government are often key players. But the point is they are usually subsidized by someone.
Many individual businesses in incubators are funded by venture capitalists who believe in a nascent idea and in return for a slice - or a majority of the company - they fund it. Their hope is to gain significant return.
But these types of opportunities may be hard to come by for our region. Our niche may be slower growth enterprises involved in tourism, agriculture, sports and perhaps other areas of the bio-tech field.
These types of companies may not appeal to how traditional incubators are created and funded. The return may not be there.
However, there are new models of “incubators” that may be possible. One may be what I am giving a new name to a “Co-op Incubator.”
If we may have difficulty obtaining investors to build our “job creating incubator” is it possible for the community to do so – as a business venture?
For example, let’s take the Adirondack Business Park, 290 acres of industrial land of which now has APA pre-approved sites and is home already to one bio-tech firm, Bionique Labs.
Is it possible to put together a community-based team?
A Job Creating Community Team?
Is it possible to round-up our current bio-medical and bio-tech companies to serve as a group of advisors? Could they be helpful in helping us market the incubator as well as design a “spec building”?
Could we then put together a group of local engineers, planners and construction companies to design and more importantly cost out such an incubator?
Could our local municipalities be helpful with the infrastructure and site development?
Would a group of community minded investors come into play to provide the necessary seed capital and could other partners be local banks and economic development agencies?
There is an interesting book “Localvesting: The Revolution in Local Investing and How to Profit From It” by Amy Cortese. I thought our area was fairly progressive until I saw what other rural communities are doing out there. Some might believe this is socialism at work but many of the new thinking on community development is about obtaining profit – for you and the community.
In these economically troubled times entrepreneurs and communities are looking for alternative ways to move forward. They are forming new business models where everyone profits. For example, there are many successful businesses out there that may not be what you think. Did you know that Land O’Lakes and Organic Valley are “billion-dollar” “co-ops” according to Cortese?
There are many new models out there for “community development” that she points to including innovative community loan funds. For example did you know that one model she points to a “community development financial institution” exists in the community with the Adirondack Economic Development Corp?
Models she points to in her “Experiments in Citizen Finance” include:
• Creating a “Local Investment Opportunity Network The example given is what they did in Port Townsend, Washington who “doesn’t invest as a group, but facilitates investment by bringing together local investors with local businesses in need of loans or equity.”
• “Crowdfunding” This is defined as “an approach to raising money that aggregates small sums from many individuals via the Internet.” This “potentially revolutionary new model of finance that cuts out middlemen and lets individuals directly lend to, or invest in, other individuals and businesses, typically in small increments. Person to person lending sites has flourished in recent years…”
• “Slow Money” This is a “national organization made up of semi-autonomous local chapters dedicated to creating financing solutions for small-scale food and agricultural producers.” They often finance “Foodsheds” labeled after watersheds except that in this case it is a “region’s food production and distribution system. It encompasses the farm, the table, and everything in between. Like watersheds, foodsheds are vital to the health and security of the region.” With all of our farms and restaurants in the area I always thought a regional food distribution center may be an interesting idea worth exploring.
• The “Do-It-Yourself Public Offering” “DPO’s” are a “low cost way for companies to sell shares directly to the public.”
Regardless of how this is put together, should we consider innovative ways to attract jobs to our region? We know in most cases we cannot compete with regions outside the Park so should we take matters in our own hands and can this be a new opportunity for our businesses and communities?
In terms of resources we are rich in ingredients ranging from the expertise of local companies, interested local governments and experienced resident and second home populations. We also have a wealth of private and public partners including banks and economic development organizations.
The whole world of how we think of business and therefore how we attract it seems to be turning upside down. In the December issue of Entrepreneur magazine, one of their cover articles is “11 Hot Start-up Sectors for 2012: This Way Up.” Their #2 trend is “Collaborative Commerce” defined as growing marketing opportunity based on sharing products and services.
New Business & Community Opportunities?
Is it possible that we need to think differently about how to grow our business and our community? Perhaps instead of thinking in terms of” how I can expand my business by selling more burgers or finding more clients.” Is there is an opportunity for growth through “collaborative commerce,” networking and sharing?
We are asking our own communities to share, collaborate and network. Should we do the same? By breaking down our own business walls built on the old school of Business 101 and that is competition amongst ourselves, are we missing opportunities in this new economy to grow our company?
Perhaps the walls need to be more invisible between my company and yours. Perhaps we can grow our own customer base together more than we can as individuals in these troubling times. And that the community and government can not only be new partners but represent new collaborators.
The community needs new jobs. Businesses need new markets. It seems collaboration and sharing are new trends we may want to look at and there may be new models to do so, some already at our door-step.
We just may need to start with a project like a job-creating incubator and get everyone together. It may be a new opportunity.
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