In the same week Google announced the officlal birth of Google Capital, stating a goal "to invest in the most promising companies of tomorrow," Constant Contact, the publicly traded software-maker based in Waltham, Mass., is taking a markedly different approach.
Specifically, Constant Contact will launch what it calls the Small Business InnoLoftin June. Three to five startups, selected by Constant Contact after an application and vetting process (deadline: March 31), will share dedicated space, resources, and connections at Constant Contact's headquarters.
It's similar to the old-school incubator model--in which multiple startups share the space and resources of a common investor--with one definitive exception: Constant Contact will not be an investor.
But the 1,300-employee company, which was founded in 1998, still believes the InnoLoft can yield a rich internal payoff in two key areas: Talent (retention, engagement) and branding.
Joining the Local Tech Culture (and Being Cool Again)
Why did Constant Contact decide to do this? "We needed to help change the culture internally and jumpstart our reputation externally," says Andy Miller, chief innovation architect at the company and the leader of the InnoLoft initiative. "Five-to-seven years ago we were a hip cool company. And now [we're] not the hip cool Cambridge startup anymore."
Some of that, of course, is just the price of success. A publicly traded 16-year-old company will never be as cool as a startup because it is, well, a grownup.
But some of it has to do with the dynamics of Boston-area tech culture. Waltham, where Constant Constact is based, is a suburb. You need to drive there. It is where grownups live. It is where city buses seldom go and bands seldom play. It is literally miles away from Cambridge's Kendall Square, home not only to MIT, but also to many of Boston's hottest startups and venture capitalists. In addition, Kendall Square is the base of many biotech, life science, and technology mainstays. The Microsoft NERD center (the acronym stands for New England Research and Development) is there, as are offices for Google and Facebook.
All of which has a real effect on Constant Contact's branding, talent acquisition, and retention. Boston's top tech talent will always be tempted by Cambridge's charms; it behooves Constant Contact, therefore, to develop charms of its own.
That was a key impetus behind the InnoLoft idea. Miller envisions it as "an excellent recruiting and retention tool" that "will further position Constant Contact as a leader in the tech community, particularly in the greater Boston area."
Making Entrepreneurship a Daily Habit
Miller joined Constant Contact about two years ago, when the company acquired his Boston-based startup, CardStar. At the time, CardStar had more than two million users of its mobile applications, all of which helped consumers use loyalty cards and mobile coupons.
Part of what Constant Contact hoped to acquire--in addition to CardStar itself--was Miller's talents and experiences as a tech entrepreneur. Already, Constant Contact held quarterly Innovation Jams, which had yielded many fruitful ideas, including trackable coupons and so-called "basic mode" (in which customers can select to see a basic mode rather than the full features of Constant Contact's campaign editor).
Miller wanted to make internal entrepreneurship more of a daily habit and less of a quarterly outburst. With the help of one of his early hires, C. Todd Lombardo, he sought to instill a process around the way the company vets and greenlights ideas. Adapting principles from the worlds of design and so-called "lean" startups, Miller and Lombardo codified and taught what they call the Green Light Process: A way to "quickly churn through" ideas to see which ones were worthy of becoming "minimal viable products" (MVPs).
After one year on the job, Miller's 15-person team had gained a measure of respect within the organization for its teaching of processes and for the four internal startups it had launched.
With their strong early track record in the organization, Miller's team pitched its supervisor on the top team, SVP Ken Surdan, about InnoLoft. With Surdan's help, Miller's team drafted the proposal. Gradually, over the next several months, they convinced the other executives at Constant Contact that InnoLoft was something they had to do.
Taking a Page From Microsoft
The InnoLoft space is 30,000 square feet, designed to be three separate areas: One where Miller's team will sit; a coworking space, where Miller's team and other Constant Contact employees can spend time and collaborate with the startups; and one auditorium-style conference room, allowing the company to host events and become, in Miller's words, "the Microsoft NERD Center for Waltham."
Since the InnoLoft is still months away from launching, it's impossible to say as yet whether Constant Contact will realize the hoped-for gains in terms of branding and talent. What's certain, already, is that the initiative has created a stir and an excitement among the company's employees.
On March 31, the application process will close, and Constant Contact will begin to screen which startups will become members of the InnoLoft's inaugural class.
In other words, startups will be coming to Waltham and, with them, a sense that the grownups who were once hip in high school can, as adults, be hip again.