Business Incubator Series: Fred Hoch And Terry Howerton, TechNexus, Chicago, Illinois (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: Is there an ideal company that would benefit from your incubation?

Fred: It’s an ideal mindset. It’s a company that’s open to the idea, it’s collaboration, it’s community.  There are benefits of working with not only the people who are here in the space itself, which is a traditional incubator space, but also the fact that we have the [Illinois Technology] Association headquartered here, along with the Community Trust – which is another nonprofit organization headquartered here – that bring in a constant flow of people.

We have about 2,500 people a month who come through here. The [ideal company has] the mindset that they believe our program will help them get their company going faster, stronger, and so on.

Terry: That’s right. It’s a company that understands the value of collaboration and the collaborative environment we’ve created here. As Fred said, 2,500 people a month flow through our facility and use it for meetings, roundtables, training, and coworking.

It’s really the central hub of the entrepreneurial and tech community in Chicago, or one of the central hubs for that. So, the entrepreneurs who incubate here, who appreciate the opportunity to collaborate with that kind of community that is drawn here, is an important distinguishing factor. Also, to build on what Fred said, another important piece is that the companies we’re going to be successful at helping are the ones for which we’ve already got strong industry relationships or contacts.

We tend to favor companies in, for example, the payments industry, where we know we’ve got strong industry contacts who can help them from a capital standpoint and a customer standpoint. It could be innovative in that particular vertical … or in healthcare, mobility, navigation or some of the other industries where we’ve got great industry relationships.

Irina: How many companies have been incubated so far?

Terry: We’ve had 102 startups launch or grow from this facility since 2007. They’ve raised a little over $45 million in capital and have employed somewhere around 300 people as of July 2011. It’s a nice win.

In addition to that – keep in mind that’s just the startups that have grown here – in the first three months of the year, so in any given quarter, we have almost 1,000 companies are represented in this area.

Over 1,000 companies … people from them are coming here and meeting and collaborating in one way or another. There are 102 new companies that have been created here, but then we’ve also got quite a collaborative environment from existing companies here as well.

Irina: How many companies have been incubated in the past 12 months?

Terry: At any given time, we’ve got about 20 companies that are full time in residence. I don’t know the number off the top of my head. In the past three years, it’s been 102.

Irina: What are some core benefits your incubator provides?

Terry: I think unequivocally that the most important core benefit is community collaboration. That we first focused on building trade associations like the Illinois Technology Association and bringing organizations like the Clean Energy Trust and others in underneath the roof and all of the programs that both ITA and Clean Energy Trust bring to the community here, that was an important factor.

When you’re a growing company that wants to be based in this space, the chance to interact with or run into somebody in the hall or jump in front of a whiteboard with any number of entrepreneurs or executives who are coming here each month is the most important factor. That’s the informal aspect of it.

Then there’s also the formal matchmaking, the formal connections that are made as a result of being here, the opportunity to sit down with Fred or me or someone from the staff and say, “What I’m really trying to solve is this specific problem,” or “I’m really trying to get to somebody in this specific company or this specific industry.”

Through the formal process of being able to help entrepreneurs make those connections, we see ourselves as gateways, not gatekeepers. We serve both formally and informally as gateways for the companies that are growing here.

This segment is part 2 in the series : Business Incubator Series: Fred Hoch And Terry Howerton, TechNexus, Chicago, Illinois
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