Monday November 12, 2018

NY Convergence ORIGINAL

NYTECH: Incubators, Accelerators and Free Roundtrip Tickets (#nytechIS)

Micah Kotch, director of operations, Polytechnic Institute of NYU explains the differences between accelerators and incubators. (Credit: Joly MacFie)

By Lauren Keyson

The New York Technology Council met at Pricewaterhouse Coopers earlier this week to talk about the myriad of services that are available at incubators. In the process, the panelists discussed the differences between incubators and accelerators. Panelist Charlie Kemper is managing director of Revel Partners and general partner at Entrepreneurs Roundtable Accelerator, a NY-born community-driven incubator. He said, “Incubators are something like Idealab, which Bill Gross created; something that pretty much owns an idea and then helps build it in its entirety — owns it from a concept but also owns it from an economic perspective. The accelerator is a platform where we help other people’s ideas in co-working spaces as primarily a fee-for-service environment.” Kemper’s organization’s edge? American Airlines is one of its sponsors and gives his startups roundtrip tickets to visit customers.

Matthew Shampine, co-founder of  WeWork Labs, an innovation co-op in SoHo, gave his own definitions for startup work spaces saying, “Accelerators usually take equity and give you cash in exchange – they aren’t really for everyone. Others like WeWork are co-working incubator mixes that don’t take equity from the members; they just try to help out the members. We provide 50 of New York’s most talented community members with the essentials, and then leave the rest up to them.”

Shampine continued, “It’s about listening and being responsive to what they need. It’s about building community – the idea is to build relationships and friendships and not acquaintances. It’s much easier to ask your friend for help or for an introduction; someone that you have a relationship with. That’s what makes our space attractive to entrepreneurs – we are building relationships with people. And you will meet people there with every possible skill set that you will need to build out your company in the future.”

Daria Siegel is the director of the alliance for downtown New York’s Hive at 55, the largest co-working facility in Lower Manhattan.  She said,  “Hive is about community, and it is mainly for freelancers and independent workers who could benefit from getting out of the house; it’s not a library, it’s a place where you can interact and hang out with other people. Community is important —  you can’t do it alone for a startup or small business.  You need to get out of your kitchen, out of your table at Starbuck’s, and meet with other people and share ideas and skills.”

David Hochman, executive director of the Business Incubator Association of New York State, said that there are different meanings for co-ops, incubators, accelerators, and mixed co-working space, saying, “They mean different things for communities – and that’s fine — it doesn’t require a single interpretation. What is required is that we listen clearly and understand how people are using the words differently.” The Incubator Association had two association members on the panel, the Polytechnic Institute of NYU and NYDesigns, and a third, Franklin’s Lab, was in the audience.

Micah Kotch, director of operations for the Varrick Street incubator for Polytechnic Institute of NYU, was impressed by Kemper’s idea of getting an airline to donate roundtrip tickets. “I really like this idea of getting free tickets to the entrepreneurs in the space.  I like it because the answers don’t exist in the building. So if you think you’ve figured it out, you probably haven’t. Most entrepreneurs spend all their time on product development and none of their time on customer development so they build something that no one is willing to pay for and that doesn’t solve a problem. So we think that model should be turned on its head. We encourage our tenant companies to get out of the building and go talk to 30 customers.”

Kotch continued, “We find ourselves the time where last quarter, New York companies raised about $540M, and 90% of it was in internet and mobile. If those waves continue to crest that’s a beautiful thing. But California is way out in front of us; compared to NY they raised $3.6B last quarter. So we have a ways to go — it’s really a battle for second place in terms of how much funding and deals are getting done.  But we have a tremendous opportunity for innovation here — it’s an exciting time.”