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Article: An Interview with an Incubator Insider

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An Interview with an Incubator Insider

By Doree Shafrir

Christian Evans (not his real name) is senior vice president of business development for a New York-based consulting company that plans to launch an incubator focused on b2b startups this summer.  (Since they're still in "stealth mode," he requested that we not reveal his or his company's name.) Vault writer Doree Shafrir caught up with Christian recently for a look inside the process of starting an incubator. 

Vault: What kinds of companies is your firm planning to focus on?

Christian Evans:Mainly b2b, and specifically our niche is business to small business.

V: At what stage will your company start incubation? CE: Really early stage, before seed.  We are going to take everything from the single, lone entrepreneur with a lone idea, all the way up to the semi-completed management team.  Of course, if they already have a robust management team in place, we're not going to be able to provide as much input.

V:Will your company provide financing?

CE: That's still to be determined.  Right now, we're focusing on business knowledge and infrastructure support.  Our goal is to help them get financing - I think the founders will selectively invest as they see fit.

V: Is your incubator starting up with any partners?

CE: We have a couple of VC partners and a couple of large corporate customers.  The goal is for them to add a kind of credibility to the mix.

V: How would you compare your company's incubator to a well-established one like idealab?

CE: It's probably more narrowly focused - idealab is hugely broad.  It's all over b2c, and I think they're trying to get into b2b.  Breadth of knowledge is something we have no desire to duplicate.  We're focused on one segment of the b2b market, and we already have proprietary knowledge and processes built around that and processes built around that.

The incubators I know about are dividing along two lines.  There are those with a ton of money - VCs, angel investors, corporations.  They say, "We have a ton of money, and we want to differentiate ourselves from typical venture capitalists - we want to provide infrastructure and management support beyond money." The other group is driven by a knowledge base - they understand a certain market very well.  I've heard rumblings of telecom-ish incubators where the top management is telecom-ish type people.  Ours is also a knowledge-based type of business - our niche is small business.

V: Why did your company decide to start an incubator?

CE: My firm does consulting to large Fortune 500 companies who want to move into the small business arena.  They do development-type stuff, site-specific site development.  The skill sets matched pretty naturally.  Plus, the firm got tired of giving advice to clients and not seeing a huge potential financial return!

V: How is your company going to find companies to incubate?

CE: There's a huge amount of ideas generated internally, and part of it is going to be capitalizing on those ideas.  Once we run through that, we'll use the "friend of a friend" network.  Then we'll start actively looking for entrepreneurs, but I don't see that happening for awhile.  There's a huge backlog of ideas.

V: Why did you come to work for a company that was starting an incubator?

CE: The reason why I chose my firm over a "traditional" dot-com opportunity was because I felt like I could still get a lot of the risk associated with a single dot com while also being allowed some ownership around a company.  I had an offer from a VC, but I didn't go that route because I was tired of transactional relationships.

V: Please describe a typical day at work.

CE: I get here at 8.  And then the usual day begins - 30 percent of it is broader, company-wide issues.  Seventy percent is associated with the specific dot-com that we're starting up.  Within the 30 percent of company issues, it's really thinking about new ideas, going over pitches, and kind of refining our thinking.  The 70 percent - my role - is I'm senior VP of business development.  Half of that time is doing business development.  BD breaks up between cold callish type stuff - you've targeted someone and you try and contact them.  Then there's the "lukewarm" calls, "friend of a friend" contacts.  A "warm" call means that they know you or know someone.  Half of that time I spend just talking with people and describing our value proposition. 

The other things I do are for the web site, because I'm also in charge of site development.  We're outsourcing the technology component right now because we felt that we couldn't get tech up fast enough - we're using both a front end and a back end agency.  I coordinate what they do - I make sure deadlines are being hit, milestones are where they should be.  Basically, all facets of what they're doing. 

The third thing I do every day is I'm in charge of our call center.  We have four people right now, which will be going up to 12 in the near future.  I make sure that all of their calls are efficient.  So my day is those four things, broken up that way.  I came from consulting, and it's really different.  In consulting you're focused on one client and one project intensely - here, I have a ton of different things.

A typical day

8:00 Arrive at work.  Check e-mail, listen to voicemail, and read a bunch of newspapers online (The New York Times, Wall Street Journal, Industry Standard, Daily Deal, etc).

9:00 Meet with the president of the company to discuss potential partners for the incubator.

10:30 Get a call from one of our corporate partners - he wants to make sure that we're on track for July launch.

11:30 Call a couple of potential partners on my contact list.

12:30 Eat a sandwich at my desk.  Play a game of solitaire.

1:00 Go down to the call center and sit in on a series of calls.  It's the first week for one of our employees, and I need to make sure that he's got the lingo down pat.

2:30 A contact at a potential partner finally calls me back - I've been trying to get in touch with her for a week.  We discuss the first company that our incubator is starting, and she sounds interested in investing in it.

3:30 Work on the web site.  It's in development right now, and I'm in charge of coordinating both front-end and back-end operations with two companies that we've outsourced the job to.  It's really important that I stay on top of what everyone is doing.

5:30 Come up with an idea for the web site and call the head of our back end team to see if it's technologically feasible at this point.  He's not sure, and will get back to me.

7:00 Get a phone call from a friend from college who's starting up an Internet company who had heard through the grapevine that we're starting an incubator.  I tell him that we haven't launched yet, but to send along his business plan and we'll take a look at it.

8:00 Go out for drinks with a couple of people from work.

10:30 Head home and watch reruns of "The Simpsons" before falling asleep.