[dropcap]W[/dropcap]hen the federal government decided to invest $31.4 million into four of B.C.’s largest technology based incubator and accelerator organizations late last year, it was no big surprise. The technology sector in B.C. produces approximately $15 billion in GDP and accounts for over 84,000 jobs according to a recent report released by KPMG.
Incubators are organizations that are specifically designed to help companies mature by offering services such as office space, marketing support, management advise and more. While business incubators have taken on many different shapes and sizes since their early inception, there has been substantial interest from the technology sector in particular for these types of organizations.
[pullquote align=right]It was one of the best learning experiences for me as a CEO[/pullquote]Sean Kerklaan was already a seasoned entrepreneur when he was hired on as CEO of Fatigue Science two and half years ago.
He had already gone through many of the challenges most entrepreneurs experience when he started his first company back in 2007. He taught himself some of the basics running a technology-based business by investing his savings in what some might consider ‘the school of hard knocks’.
Shortly after joining the Fatigue Science team, Kerklaan met with a good friend and local entrepreneur for lunch and was instructed to meet Bill Tam, the president and CEO of the local incubator known as BC Technology Institute Association (BCTIA).
Within a week, Kerklaan signed Fatigue Science up to BCTIA and was taking advantage of the many programs available.
About a year ago, Kerklaan was looking to raise a significant amount of capital for Fatigue Science. BCTIA put together a panel of seven experts in his industry and they watched his team present their investor pitches and critiqued them for hours.
“It was one of the best learning experiences for me as a CEO. They helped us refine our approach and ultimately we were extremely successful in raising that capital last year,” says Kerklaan.
The B.C. incubator scene
Vancouver, much like other tech hubs around the world, has experience tremendous growth when it comes to entrepreneurial cooperatives such as incubators, accelerators and co-working spaces.
More than half of the 25 organizations included in the BC Innovation Councils list of incubator, accelerator and co-working spaces in the province have launched in the last few years.
Timeline of technology incubators, accelerators, and shared office spaces in B.C
A history lesson
The idea behind business incubators came to be in 1959 when a small town in New York lost its largest employer and 2000 jobs vanished.
Members of the Mancuso family, which had originally moved to Batavia, New York as labourers to help build what was then the Massey Harris Ferguson plant, found themselves buying the empty one million square foot factory and attempting to fill it up again.
“My father, who had been given the job of filling the old Massey plant, came up with the idea of doing whatever you could to help people start businesses, relocate their businesses – anything that would get them to invest and create jobs in the community,” said Thomas Mancuso, Mancuso Business Development Group.
The late Joseph L. Mancuso, who is known for having started the first business incubator in the U.S., helped his community to thrive by providing a shared office space, a place to network, and a string of services to make the space more appealing to future tenants.
Thomas Mancuso, the son who later took over the family business, shares his story (1’32”)
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What makes Vancouver special?
In order to get a better sense of what incubator programs are all about, I made my way over to two of Vancouver’s largest technology incubators – BCTIA and Wavefront.
In the following video, Bill Tam, President and CEO of BCTIA, describes some of the programs that are available through Centre4Growth. Centre4Growth is a program organized by BCTIA which helps companies accelerate their businesses and gets them to one of four stages:
- the think it stage, which helps companies realize their ideas
- the build it stage that assists companies in acquiring customers and creating revenue
- the grow it stage, which looks primarily at increasing revenue
- the scale it stage, which finally helps companies to focus on global markets.
[vimeo 124432638 w=1000 h=551]
How BCTIA helps
BCTIA received $10.4 million from the federal government and matched that number with investment brought in from their own business community.
They decided to move into a new 26,000 square foot office space with the goal of bringing in up to 30 companies interested in accelerating their business.
[vimeo 124432639 w=1000 h=551]
Wavefront looking for next big thing
Wavefront works with a variety of companies from early stage wireless technology startups to larger multinational corporations across Canada.
To better understand the kinds of services Wavefront offers companies, Brad Lowe, VP of Wavefront, provides the example a company that believes they have come up with the next big thing in mobile apps.
“We think we’ve nailed it. We think we have a great app. People are going to love it. It’s usable, it’s easy and it’s very intuitive,” says Lowe.
Having the ability to connect companies that are starting out with others that have already gone through many of the same growing pains is one of the key benefits to being part of an incubator/accelerator program like that of Wavefront. Not only is there a strong community of companies at multiple levels that are accessible, but as Lowe argues, there are subsidized services that can be the difference between a products success and its failure.
“They come to us and we say, well…maybe but maybe not. So why don’t we set up a formal usability study for your app. We can bring usability experts in and they can set up a set of test scenarios that they want to run users through.”