Business Incubator Series: Tim Lavengood, Technology Innovation Center – Evanston, Illinois (Part 2)

By guest authors Irina Patterson and Praveen Karoshi

Tim: So, the fourth thing we have is this peer group where companies get to learn from each other and from us. Over the 26 years we have been around, we have had more than 350 clients.

We have just in Evanston, which is a small suburb of Chicago, about 25 companies providing about 430 high-quality full-time jobs, so there is a lot of learning that takes place here. It has become a big network over the years that a company gets to come in and be a part of, both in terms of getting personnel and learning from mistakes.

Once or twice a month we bring somebody back to give a seminar or presentation, sometimes tell war stories, about what their experiences were, what worked for them and what didn’t. It is a great opportunity, I think, for this sort of sort of peer-to-peer learning.

Again, we give space, we provide services, we provide links to universities and we provide that peer-to-peer learning. That is pretty much what we do.

Irina: Does your incubator have any particular industry preference?

Tim: Not really. What brings efficiency to our service model is the strategy. We provide some strategic support in understanding how to get a customer to buy something he or she has never heard of before because what you have is new, particularly, in business-to-business.

That is the challenge that our companies, whether they are in biotech, business software, or industrial equipment, all have.

Irina: What is your geographical focus?

Tim: In the past six months, we have brought two companies from overseas. We’ve got several companies from the Chicago area and from other states. One of our sponsors is the City of Evanston because most of the companies we draw in are not from the town.

So, this is their first exposure to Evanston. Then, the city, the real estate community and everybody else tries to work together and try to hold them here, as they grow beyond their six employees. We have one company here, it started with us with two people. They now added 105 employees.

We are fortunate because we are so old. For instance, our URL is theincubator.com, so anybody from anywhere in the world who goes on the Internet and decides to look up “incubator” is going to find us.

Irina: Do you have virtual clients, those who don’t rent a space in your incubator?

Tim: We have some virtual clients, not many. It is something that people have talked with me about building. I am not as comfortable with it as a lot of other people are. I like to have them here, if I can.

Irina: What are the ranges of the fees for your services?

Tim: We charge rent. We do not have a free space. We are a tenant in our space [ourselves]. Unlike a lot of incubators, we have to find our own space, which means we have to cover that rent bill every month, and it is the market rate.

Some services, like broadband and telephone service, we resell to our companies, cover the cost for that from them, and charge an additional fee for being part of the incubator. So, we charge bundled fees and then there is a rent check that they pay.

Irina: What is the range of fees?

Tim: A one-person, small 200-square-feet-deal, with your telephone, with broadband access, furniture, and conference rooms, is going to run probably about $450. Then we go up from there because we have a lot of small modular spaces, so some people have gotten up to four or five spaces and they are paying a couple of grand a month.

Irina: At what stage do companies usually apply for your program?

Tim: Most of our companies are fairly early stage. We do not even require a business plan. I found that most business plans aren’t very good because people don’t really know how to do them, and so I found that that was inefficient exercise.

What we deal with, I would say, fairly early-stage technology-oriented companies. We have [usually] people who have a significant technological background and often no business background but who have made the commitment to start their businesses.

This segment is part 2 in the series : Business Incubator Series: Tim Lavengood, Technology Innovation Center - Evanston, Illinois
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