Ready For Takeoff

Multiplying Like Fruit Flies

Incubators aren't new by any means, but the concept has taken years to finally catch on. Although the first incubator opened in 1959 in New York, by 1980, only 12 existed.

Today those numbers have skyrocketed: "There are 600 incubators in North America alone, and it's estimated there are 2,500 in the world," says Dinah Adkins, executive director of the National Business Incubation Association (NBIA). "North American incubators have created nearly 19,000 companies still in business, and more than 245,000 jobs. It's a real positive, considering [large] corporations have been downsizing every year for the last 10 years."

Except for restaurant and retail operations, most start-up businesses are well-suited for an incubator, says Adkins. "The main areas [incubators] cover include research and development, manufacturing and service."

Entrepreneurs can find support in one of three main types of incubators. NBIA statistics show that most incubators are mixed-use, meaning they serve a variety of industries. Technology incubators, which target clients involved in creating and commercializing new technologies, are another major category. Generally, these two types of incubators aim to bring outside investments into a particular geographic area to expand the tax base.

The third type involves a smaller number of incubators (only 5 percent), but it appears to be a fast-growing segment. Known as empowerment incubators, these mixed-use facilities focus on clients considered underprivileged and underserved, such as minorities and women. Such empowerment incubators are often situated in economically distressed areas in hopes of revitalizing the regions.

Incubators provide a win-win situation for both the entrepreneur and the community, says Sandy Bourne, president of the Pasadena Enterprise Center in Pasadena, California, a mixed-use, private, nonprofit incubator. The center is located in an urban area targeted for revitalization and helps local minority- and women-owned businesses.

"Not only do incubators provide entrepreneurs with critical expert help during their start-up phase, they also tend to produce companies that survive," says Bourne. "NBIA statistics show that more than 87 percent of incubator businesses are still open five years [after leaving the incubator]. The supportive environment and accessible expert services really give [entrepreneurs] the edge needed to thrive."

Marisol Barrios-Jordan is a case in point. She feels she owes much of her rapid success to her incubator experience at the Pasadena Enterprise Center. In less than a year, the 26-year-old publisher of Latina Bride Magazine has built her publication's circulation to 50,000.

"The incubator experience has been invaluable for us," says Barrios-Jordan, who started the magazine in December 1997. She and her partner, Michelle Nordblom Hottya, also 26, came up with the idea after planning their own weddings and discovering a lack of wedding information for Latina brides.

"We've taken advantage of the many consultants available at the incubator, whose services we wouldn't be able to afford on our own," Barrios-Jordan says. "We were even able to connect with a printer, who extended us credit for the first and second issues of the magazine."

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This article was originally published in the February 1999 print edition of Entrepreneur with the headline: Ready For Takeoff.

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