Incubators

Incubators Aren't Only for Tech Startups

Incubators Aren't Only for Tech Startups

Design engineer Marcel Botha is thriving at Brooklyn’s New Lab.

Image credit: Jesse Dittmar
This story appears in the December 2014 issue of Entrepreneur. Subscribe »

In Philadelphia, what is old is becoming new again, thanks to a 2-year-old incubator that seeks to restore the city’s luster in the fashion trade. The Philadelphia Fashion Incubator at Macy’s Center City aims to recapture the city’s nearly forgotten history with yearlong residencies for designers focused on breaking into the market and staying there.

“Philadelphia has an outdated and old-fashioned image, and [this] is part of a strategy to up our credibility in fashion and retail,” says Michelle Shannon, vice president of marketing and communications at Center City District, the business development corporation that’s a partner in the venture. “You could say it’s a little bit of glitz and glamour, but we have a rich history of fashion in this city, and I think people forget about that.”

Fashioning a new incubator

Say the word incubator, and thoughts turn to tech-driven business-development hubs. But according to the National Business Incubation Association (NBIA), just 37 percent of North American incubators are focused on technology. The rest come from fields such as manufacturing, arts, fashion and food, and are helping launch businesses across the country.

Today’s incubators look like the new crop of entrepreneurs in our startup nation: diverse, collaborative and community-based. Mixed-use incubators—those supporting a cross-section of nascent companies—comprise 54 percent of the mix. 

“In many programs, if someone graduates from the incubator, they will go out into the community, be a purveyor of services and help develop the community,” says Bridget Lair, former publications director at the NBIA. She attributes the rise of the nontech incubator, in part, to the last downturn in the tech economy. “When the market crashed, so did a lot of those incubators.”

In many cases, the nontech incubator has grown in places rich with historic industries that have fallen on hard times, helping to reclaim lost heritages.

Such was the case with the Philadelphia incubator, which hosts six designers who undergo what executive director Elissa Bloom calls an “accelerated MBA.” A former accessories designer in Manhattan, Bloom devised a program that reflects her own startup experiences. 

“I created the program based off what I knew my needs were—to really understand [fashion] from the business side,” she says. “There’s so much talent in the city, but they’re not getting the know-how to run and launch a business.

“We’re looking not just for talented designers, but people who want to make it into a business,” she adds, noting that residents must attend workshops in trend forecasting, business development, production, sales, marketing and branding. 

The program was modeled after Macy’s fashion incubator in Chicago but tailored to leverage Philadelphia’s resources, including four fashion schools and the Wharton School at the University of Pennsylvania. The designers-in-residence get industry mentors and monthly trips to Manhattan for trade shows, tours of the Garment District and critiques of their work.

Getting beyond gritty

In a similar vein, several entities in Detroit have adapted the incubator model to reflect the city’s design and manufacturing history. The Detroit Creative Corridor Center (DC3), an economic-development organization in partnership with other private and public entities, provides programming, acceleration services, outreach and support to the local creative economy. Their collective mission: to reclaim the city’s standing as a global center for design. 

“Our thesis was, this is a city where you can design, manufacture and distribute anything,” says DC3 director Matthew Clayson. “But when it comes down to the craftsperson who wants to mass-produce, there are very few support structures available and almost none to help them get to market.”

DC3 estimates that Detroit’s creative corridor is home to 200 companies with 4,000 employees. The organization helps facilitate relationships between creators, captains of industry and other business-development entities, such as the Artifact Makers Society, a virtual creative collaborative for local artisans that launched in September 2013. 

When Detroit native Shaun Reinhold returned to his home city after working out of state in supply-chain management, he enrolled in DC3’s yearlong program to help him launch Canvas Watch Company. He entered the program at the prototype phase, tapping the resources he needed for a fundraising campaign, R&D, branding and identifying local market opportunities. 

“They helped me with the things I needed to launch a watch company—building a brand and thinking about it beyond my interest in making watches … to something [bigger] for consumers,” Reinhold says.

His goals were in sync with those of DC3: repositioning “Made in Detroit” to reflect the city’s reemerging maker movement and shed its gritty image. “I saw the missed opportunity; there was a very strong creative community and manufacturing expertise in the area, and they feel separate,” he says. “That was part of the idea, to marry my background in supply-chain manufacturing with other designers to make well-crafted products outside the auto industry.”

Designed for success

No one can say that Brooklyn is lacking in maker-based businesses. The borough is home to two incubator-friendly campuses, both historic industrial parks revitalized with the buzz of new light manufacturing. Within the city-owned Brooklyn Navy Yard, once the country’s leading military shipbuilder and now a center for local economic development and job creation, New Lab has created a high-tech design and prototyping center where like-minded entrepreneurs can incubate their businesses under one roof, sharing equipment and ideas. While the Navy Yard hosts businesses from film production and light manufacturing to textile and furniture workshops, New Lab—created in 2012—focuses on product design. 

“We thought the space was inspiring, and we could create shared resources and tools for businesses centered around physical products as opposed to virtual products,” says co-founder Scott Cohen. New Lab is expanding beyond its beta space into 84,000 square feet that will be retrofitted with studios, collaborative shops and prototyping equipment such as 3-D printers. “Unquestionably, we’re not building something because we think something is going to happen—we built in response to what’s happening,” Cohen says. 

One tenant with a growing business is Marcel Botha, a design engineer who took up residence in New Lab in 2013 to bring his product—Spuni, an ergonomically designed baby spoon—into production. Within eight months he brought it to market, selling it on Amazon and in the Museum of Modern Art’s design shop. New Lab, he says, “met and exceeded” his expectations in a way that couldn’t happen in a nonincubated space.

Botha, involved in New Lab since its launch, says his company benefited from the attention the new incubator received and from being in the midst of a bigger conversation on the rebirth of local manufacturing.

“Because of where we were positioned, there was a lot of interest from the outside on how do we do more things like this with more complex products,” he says. Being able to build a community of like-minded entrepreneurs facilitated collaboration, too.

Cooking up startups

In the space occupied by nontech niche incubators, kitchen and food programs claim 9.8 percent, the largest segment of creative or maker incubators tracked by NBIA. 

In Hardwick, Vt., about 35 minutes south of the Canadian border, the Vermont Food Venture Center is part of a larger organization that supports a local network of new-generation farmers and food businesses that have revitalized the agricultural economy. Sarah Waring, executive director of the Center for an Agricultural Economy, which operates the incubator, says the model supports the local community as well as producers who travel from nearby states. 

The center, which hosts specialty producers including Vermont Kale Chips and Hill Farmstead Brewery, offers workshops in accounting, social media and expanding into national markets. Waring points out that the incubator’s flexibility allows it to assist at precisely “the right stage” of a business. “Some entrepreneurs want to go right to a co-packer, but some are interested in a soup-to-nuts approach—how to create a brand that includes a social impact. Or they’re a chef; they may want to connect with local farmers for products and ingredients.

“Knowing your vision when you start the incubation track will help the incubator know how to deal with you,” she adds. “If you want the shortcuts, you’ll probably be there for a year, but if you’re willing to dig in, you’ll probably work with an incubator longer.”