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Article: Want to Work at an Incubator? Hatch an Employment Plan

Article Group List / Entrepreneurship / Want to Work at an Incubator? Hatch an Employment Plan

Want to Work at an Incubator? Hatch an Employment Plan

Maybe you're not interested in starting your own company and nurturing it to health in one of the incubators and hatcheries springing up on the entrepreneurial landscape.  Why not find your career on the staff on an incubator? Even if you're not focused on dot coms, there are incubators that are right for you.

On the timeline of incubators, research and science-oriented incubators have the longest histories.  The Incubator Program at Rensselaer Polytechnic Institute, for example, started in 1980.  Yet the giving of space and professional assistance to Internet start-ups is a relatively new phenomenon.  "Most Internet incubators have sprung up only in the last year and a half," explains Cate Cavanaugh, a principal of Panasonic Digital Concepts Center (PDCC), Panasonic's incubation program.  "The rules haven't been written yet."

"There are a lot of incubators out there," continues Cavanaugh, who has an MBA from Stamford and considerable experience in the financial services industry.  "But the business models and hiring practices vary for each." While incubators may differ, they do have a common denominator: stiff job competition. 

Internet Incubators: Where the Opportunities Are

So what are a candidate's chances of getting a foot through the door?  Consider the numbers.  While incubators are springing up wherever there is fertile ground for Internet development, the total numbers remain small. 

~ Each incubator has a unique business model, and consequently, unique hiring needs. James Finkle, an employee at Long Island High Technology, a not-for-profit incubator, works with only one other partner and a receptionist.  "We're not planning on hiring other people," he explains.  "As a nonprofit incubator for scientists, we have specific needs.  We don't have a 'I'm going to make a million here' mentality.  Our decision to accept a tenant is based strictly on the needs of faculty members and researchers.  We do have a couple of Internet tenants, but they are in the minority." Nevertheless, financially speaking, LIHT has a solid track record for its grads.  "Since 1987," Finkle continues, "we've had 25 graduates who collectively generate over $100 million a year."

For-profit incubators, especially those that work exclusively with Internet start-ups, most often have more extensive staffing needs.  Arnie Papp is the CEO and Founder of AJA Ventures, which provides incubation services and capital to many Internet companies, especially those based in Japan.  Papp states that incubators seek to match employee skill sets with the needs of its client companies: "An incubator must employ a team of professionals with a high degree of expertise in their related field - whether that be engineering, marketing, sales, business development, finance, law, or human resources. This expertise usually requires advanced degrees and/or professional certifications." However, an A-list education isn't the only requirement.  Coaching and mentoring skills are also paramount.  Papp continues, "Degrees and certifications alone do not guarantee the entrepreneurial qualities [we need].  We are looking for leaders and mentors who know what it takes to roll up their sleeves and kickstart a company from the ground up."

Are you qualified?

No matter where a candidate searches for an incubator job, he or she isn't going to get far without exceptional credentials.  Because so many incubator employees emerge from the investment banking and high tech fields, most have extensive finance, computer, and/or business backgrounds - not to mention impressive graduate degrees. Haley Coleman, who works at a small boutique incubator in New York City, says that everyone at his workplace has an MBA.  "And at scientific incubators," Coleman divulges, "PhDs are the norm."

~ Not only do most incubator employees have advanced degrees, they also have entrepreneurial spirits.  Indeed, the experience of working at an incubator may be second only to starting one's own company.  Arnie Papp elaborates, "Competition to join an incubator is quite high, because many candidates rightly recognize that such work offers tremendous exposure to many business models and challenges.  Also, through equity participation, [incubator employees reap] the benefits of working for a start-up and the financial rewards of a diversified set of companies with diversified performances."

Finding the Job

The key to grabbing a coveted position at an incubator may be topnotch networking skills.  Coleman heard about his position "through a random friend of a friend." He concludes, "If you want to work at an incubator, it's a good thing to have friends who are investment bankers, VCs, or dot.com executives.  These are the people who generally have direct contact with senior people at incubators." The importance of connections to people in these industries isn't surprising, concludes Cate Cavanaugh: "Incubators evolved from VCs; and VCs evolved from the intersection of high tech and finance.  [Many people who work at incubators] are coming from these industries."

While networking may be common among jobseekers, it is also prevalent among employers looking to fill their ranks.  Papp of AJA Ventures explains, "Networking is key to any job search and [this] is especially true in the Internet industry.  We are constantly asking our partners and industry associates to keep an eye out for the right talent.  Other than having worked directly with someone in the past, there is no better assurance of a candidate's credibility than a reference from a trusted associate." Since an incubator's portfolio companies may range, active jobseekers should attend industry-specific events, where incubator staffers sometimes scout for fresh talent.  AJA Ventures also recommends the National Business Incubation Association (http://www.nbia.org), which offers conference information, resources, memberships, and - perhaps most valuable - job contacts. 

~ What to Ask and to Avoid During the Interview

Once a candidate has been invited to interview for an incubator position, he or she must do basic research on the company's history, business methods, and clientele.  A good place to start is on the Web.  Candidates can perform a key word search using the company's name and/or the word "incubator" in The New York Times and The Wall Street Journal.  Technology sites such as Red Herring and The Industry Standard are also rich with incubator-related news. 

In preparation for the interview, savvy candidates anticipate the questions they may receive, and also, prepare a set of questions they want to ask their interviewer.  As a seasoned veteran of the incubator world, Cate Cavanaugh of PDCC says she expects to hear the following questions from prospective employees:

What is the nature of your business model?

What is your equity structure (how much equity is taken from a client company and how is it distributed among incubator employees)?

What is your client track record (how many companies have succeeded and how many have tanked)?

How are you funded and what is your budget?

What strategic partnerships do you have?

Do you have plans for expansion-if so, what is the timeline?

What is your deal flow like (how many new clients are you planning on nurturing and at what rate)?

~ Cavanaugh warns prospective employees not to ask about hours ("They're long," she cautions, "just like in the rest of the Internet industry").  In addition, job candidates should not harp on salary issues, explains Haley Coleman, who underwent a grueling seven interviews before being offered his job.  "Incubators don't want greedy people," he posits.  "They want people with strategic thinking abilities, the ability to identify and break down different kinds of problems, and business development skills."

While it is difficult to generalize about salary issues and interview procedures among incubators, most companies fall within a certain range.  Cavanaugh states that, with the exception of "very senior people," most new incubator hires receive salaries between $80 to $130k, not including equity in client companies, which can be bountiful.  Successful employees comprehend the link between their financial earnings and the progress of their client companies.  Papp summarizes: "We have to eat our own dog food, so it is important that employees be highly motivated by the equity participation of our start-ups." As for interviews, candidates can expect at least three to four and sometimes more, especially if the company is concerned with "fit."

Lastly, job candidates should keep in mind that applying for an incubator position is no different than applying for any other job.  The rules of thumb remain the same: dress up for the interview, act as professionally as possible, and don't be discouraged if you aren't offered the job.  "In terms of hiring new employees, I'd say our rejection to acceptance ratio is 50 to one," remarks Coleman, "This business - it's very competitive."