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Whom You Sit Next to Matters More Than You Think

Chicago incubator 1871 operates on the assumption that brilliant tech ideas get better only when they're in proximity to others.
Chicago's nonprofit incubator 1871
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Business incubators are everywhere: Most cities have several, and many smaller towns have at least one. Often they offer the advantages of shared space and shared services--but some offer a lot more.

Here's another in my series in which I pick a topic and connect with someone a lot smarter than me. (There's a list of more installments at the end of the article.)

This time I talked about business incubation with Kevin Willer, the CEO of the Chicagoland Entrepreneurial Center and 1871, a nonprofit co-working space in downtown Chicago dedicated to early-stage digital start-ups.

You run 1871. If I were a branding expert, I might feel that was a poor name choice.
That's because you don't live in Chicago. 1871 is the year of the great Chicago fire--the name resonates for that reason and because it speaks to the spirit of innovation of the people of Chicago who rebuilt and revitalized our awesome city.

Most incubators I've seen are more about shared space and a few shared services than about truly helping a start-up get going.
Here's how 1871 works. We provide co-working space for early-stage digital and tech start-ups to build their companies using very flexible terms: pay month-to-month leases, leave whenever you want.

We have approximately 200 companies in the space; the average has 2.3 employees--most of our entrepreneurs have gotten a start and are eager to go to the next level.

How do you choose the companies that become members?
We've accepted about 200 out of 800 or so applicants. Everyone fills out the same application: What is your business, who is involved, what kind of traction do you have, what are your goals? Plus, there's a video component where people talk about their  journey as entrepreneurs. Because it's a shared space, we're very serious about cultural fit.

We don't focus too much on the idea. It's really about the team--its capability, its resources, its advisers. Can it execute against its strategy? There is no dominant industry: business services, marketing, gaming, technology, energy. The common denominator is they're all building digitally.

My team reviews the applications and makes recommendations, and then an independent committee votes. They take their responsibility very seriously. We have a high bar for entry.

In some cases, it seems as if the only thing incubating is the revenue of the owner of the space. 
The basic idea is not a new idea. These models are all over: We studied them, learned a lot, and decided to make 1871 a nonprofit. We don't take equity, and we have no legal connection to the companies once they leave. Our model is based on helping the community through pure economic development.

When you have a stake in the company, you might push people to do certain things that are in your best interest but not in the best interest of the entrepreneurs.

Every space touts the benefits of working alongside other entrepreneurs, but that can be a fairly passive benefit.
We provide a number of programs: Every weekday night, we hold a large-format event that we either put on ourselves or with partners like universities. Those might be tech talks, panel discussions, entrepreneurs who tell their stories, hackathons, meetups, user groups--they're all kinds of ways entrepreneurs can get together with other people who are working on similar things. Typically around 100 people attend. They're very popular, because they connect members with people outside who are part of the larger business community.

Every Friday, we have a member TGIF: Companies talk about what they're doing and whom they would like to join them. It's a great platform to engage with the 1871 community.

Then we have office hours, which consist of a one-on-one session with a mentor. It's like speed mentoring with quick questions and answers. We do about 200 of those sessions every month. We don't pay the mentors--it's an awesome giveback from the community.

I would probably spend all my time in meetings and workshops.
The key to success is often access to resources.

What's neat about it is that our members have a lot of resources available, but they can also just sit at a desk and build. Younger, less experienced entrepreneurs tend to take advantage of lots of resources. Serial entrepreneurs less so; they're more selective and strategic.

With all the resources you provide, how important is the shared workspace aspect? It seems that could pale by comparison.

Resources definitely matter. Space also matters, because proximity matters. In the digital world, sitting next to someone matters greatly.

Shared spaces narrow the distance from a question to an answer. You run into someone in the kitchen, at an event, and all of a sudden you have a partnership. You can't manufacture those moments. They happen organically.

Sometimes success is all about mixing molecules.

Check out other articles in this series:

IMAGE: Courtesy of company
Last updated: Feb 7, 2013

JEFF HADEN | Columnist

Jeff Haden learned much of what he knows about business and technology as he worked his way up in the manufacturing industry. Everything else he picks up from ghostwriting books for some of the smartest leaders he knows in business.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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