Business Incubator Series: Fred Hoch And Terry Howerton, TechNexus, Chicago, Illinois (Part 3)

By guest authors Irina Patterson and Candice Arnold

Irina: Can you think of anything else that makes your incubator unique?

Terry: One is the community collaboration aspect. The other one is the fact that we are not focused just on a certain type or certain size of company or certain type of entrepreneur. It’s important to have a good, balanced ecosystem here.

I’ve not actually seen that in any other incubator anywhere. Most other incubators that we’ve studied tend to have a strong connection to one university or one government entity, or they tend to be narrowly focused on specific industry segments.

We pride ourselves on having a balanced ecosystem of various sizes and types of companies that can add to the value. I think that makes us pretty unusual.

The other thing – again, we’re not connected to any specific university or any specific government entity. We are a completely for-profit, private incubator that happens to have not-for-profit organizations like ITA and Clean Energy Trust based inside of it and as core partners to this approach.

If you look at successful clusters in places like Silicon Valley, you see a lot of collaboration between the universities but also between the universities and the private sector.

That’s not something that has historically happened in Chicago. There has been very little collaboration between universities and between universities and industry.

What’s happening right now inside of TechNexus is that students from the University of Chicago, the University of Illinois and other schools in the area are all under one roof.

They’re interacting with more mature entrepreneurs and companies, and they’re interacting with each other. It’s one of the first times that that’s actually happened in Chicago. I think that’s another unique aspect of ours.

Irina: What is your application process for the incubator?

Fred: It’s not a traditional application process. It’s more people come to us and say, “We’re starting this or that; we want to be part of the environment,” and we figure out whether or not they fit into the overall environment that we’re creating here, both in terms of type of company and type of person, as well as what their needs are in terms of space and other things.

Terry: There’s not a specific schedule, and there’s not a defined cohort of companies that comes through. It’s more of a rolling [process]. We’ve got companies moving in all the time and, occasionally, companies that are moving out. There’s no seasonal schedule.

What we do is sit down and talk to the entrepreneurs. We try to figure out if we can add value to what they are doing and if they will contribute to the value of the facility; that is, if having them inside the space makes sense not just for them but for the other people who are here. If after that interview process happens it makes sense, then we proceed.

Irina: How many inquiries do you usually get a month?

Fred: We get half a dozen a month, at least, if not 10 a month.

Terry: Yes. Let’s distinguish here. We may get 10 formal requests to move into the facility each month, and which we obviously can’t accommodate all of them. Those are full-time move-ins. We can probably accommodate maybe half of those.

We have dozens more each month who we give what we call a clubhouse key to. They have 24-hour, seven- day-a-week access. They just might not have dedicated space inside the incubator.

How many companies come to us and say, “I need dedicated space for a few of us to sit and build our business over the next few months?” That’s probably around 10 a month. We can probably accommodate maybe half of those.

Irina: When a company is accepted for the full-time move in, what is the next step?

Fred: The next step is to get the know the business more deeply. Terry and I work closely with all the companies to understand what they’re doing.

We’re diligent [about getting] them connected with others in the space, but more important – because we have this relationship with the entire community – with those in the community who are appropriate for the businesses, both the ones that they’re looking for, but also where we see their businesses going and where we see opportunities for them.

We get them integrated into various events. We do the ITA events. TechNexus does a lot of events. We try to get them integrated with those programs to network, collaborate, and learn.

This segment is part 3 in the series : Business Incubator Series: Fred Hoch And Terry Howerton, TechNexus, Chicago, Illinois
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