Les Neumann makes the case for an increased need within the industry for virtual incubation, acceleration and commercialisation

The world is shrinking. Growing up in the Bronx, a borough of New York City, there was sheer excitement in the household when the phone rang and a live operator announced, “You have a long distance call from Uncle Alfred. Will you accept the charges?” Wow! Uncle Alfred lived all the way in Ohio; this must be really important. Now that you have an idea of my generational status, let’s continue. On July 1, 1881 a phone call was made from St. Stephen in New Brunswick, Canada, to Calais, Maine in the United States. This was the first international phone call ever made. Western Union installed the first telephone exchange in St. Stephen two years before using Edison’s systems and a few days later Dominion Telegraph installed a competing but incompatible exchange. And no, I was not around for this event.

Then there was mail. International mail always came in a light weight envelope with red and blue markings. As a kid, I was always excited to see the stamps from foreign countries. Letters from abroad were seldom thrown away. For some reason they had a higher level of importance.

Changing with the times

How do these memories relate to incubation and acceleration? Simple - the world has changed, as well as how we communicate with each other. I start each working day by communicating with international colleagues via video conferencing. I send emails to individuals all over the globe expecting immediate deliveries and responses. Every other month my company stages a conference on business, technology and other issues important to developing companies. These conferences are broadcast online via webcast, feature real-time interaction and are archived in the public iCAN-Global Video Library. Virtual attendance and post-conference viewing was impossible only a few short years ago.

All industry, including entrepreneurship, is affected by the digital revolution. According to Babson College, there are over 400 million entrepreneurs worldwide; the majority of these entrepreneurs use the internet to conduct business with smartphones, tablets, laptops and wearable devices. Why then would these 21st century entrepreneurs be attracted to a traditional, location-based incubation facility that does not incorporate global connectivity in its business model?

Across the globe, manufacturers source materials, labour and expertise to reduce or maintain cost controls without sacrificing quality. Universities extend their reach and brand by offering distance learning courseware to remote and urban locations. There are even Fortune 500 companies that require employees, not engaged in manufacturing, to work remotely. As a result, these companies reduce infrastructure expenses and increase productivity. I propose a similar revolution take place in the incubation and acceleration industry.

Stating the Problem

Incubators have sprung up in record numbers from rural enclaves within emerging nations to long-standing communities to establish clusters and stimulate economic growth. By today’s standards, incubation is a mature industry. And, like every other established industry, it is time for change. Not change just for the sake of change, but because it is what our clients demand. There is no doubt we live in an era of technological and industrial specialization. In New York, there are incubation facilities with specialized areas of expertise in medical devices, energy, food preparation and fashion. However, the majority of incubators have a more generalized scope of expertise that is used to stimulate economic growth, entrepreneurial activity and job creation in emerging enterprises. I pose the question: “In this era of specialization, how do incubators obtain the broad range of skills necessary to foster enterprise development?”

In 2005, I founded a traditional non-profit incubator in upstate New York called iCANny. A regional economic development agency asked our team to launch a new incubation facility to reinvigorate an economy negatively impacted by the closing of a major computer developer and manufacturer. This region had positive characteristics such as an educated workforce, close proximity to a major metropolitan area, developed roads and infrastructure and a culture of generational job security. The negative aspects of the region included the absence of an established research focused academic institution, inadequate sources of funding for early-stage ventures and a population unaccustomed to the travails of entrepreneurship; these factors made it difficult to retain youth and attract new technologically advanced companies.

We did not fully grasp the gravity of what we were being asked to accomplish. But it was clear that operating as a traditional technology incubator with all of the service offerings of a traditional facility (low cost rent, shared administrative services, mentoring and networking) made it impossible to help every budding entrepreneur and inventor. We needed to specialize. We needed to hone in on ‘investor friendly’ emerging industry sectors that could produce sustainable companies capable of generating long-lasting and wage-competitive jobs. During this period, the nation was becoming energy-conscious and we were attracting an overwhelming number of early-stage venture clients in the energy and cleantech space. Our sector focus became clear. The cleantech and renewable energy sectors met each of the criteria we addressed and more importantly, were compatible with our existing executive, mentoring and advisory expertise.

Fortunately each member of our Board of Directors had multi-disciplined senior level experience and contacts in both technology and business development. Our ability to adapt to the cleantech sector was not difficult. From inception we recruited mentors from the Hudson Valley region (about 30 miles north of New York City) experienced in business and technology industry development fundamentals such as business plans, marketing, finance, manufacturing, etc. Word spread quickly about our cleantech specialization and we were inundated with requests for inclusion by entrepreneurs from as far away as Arkansas and Illinois. Business plans and concept abstracts were presented on wind, solar, water purification, bio-fuel, battery and fuel cell technologies. The majority of prospects we interviewed were inventors and innovators with business proposals which primarily improved on existing processes, products and services instead of scientific breakthroughs. But with our guidance, many of the concepts and products presented could be transformed into viable commercialized and licensed technologies. This new crop of prospective clients were largely inexperienced in launching enterprises and because of the national recession, found it difficult to self-fund, secure new equity funding or pay for incubator services. As a direct consequence our company found it more challenging to obtain grants, subsidies and client service fees. Our Board was forced to make critical operational decisions; downsize, cut programmes and services or close the doors entirely. Instead, we reduced expenses by divesting the company of costly real estate and infrastructure and took full advantage of the digital sphere and became a virtual organization.

Transitioning to Virtual

As stated, the decision to transition to a virtual organization was based on the cost-effectiveness of a digital infrastructure. But we soon realized that a digital infrastructure brought other positive attributes to our organization such as a client base in favour of the transition, reduced operating costs, an increased geographic reach and the ability to recruit a global network of experienced mentors, advisors, executives and technologists who digitally engaged with clients.

It was also evident that we could not incubate and accelerate the commercialization of high-level technological innovations without academic and research support. Our newly-developed research and academic institution affiliations and partnerships along with our network of industry specific technologists, investors, professionals, mentors and advisors exposed our clients to the best resources regardless of location.

iCANny continued to grow and gain notoriety. We were contacted by other incubators to fill voids in their mentoring staff and provide on-demand business and technology acceleration and commercialization services at attractive rates. In 2012 we extended the iCANny brand and launched iCAN-Global, an internet platform that provides expertise for the accelerated development, commercialization and globalization of energy, cleantech, renewables, information technology and potentially disruptive technologies and innovations on an international level. Through the iCANGlobal network a technology company in a rural country has access to the same human expertise as a competitor in New York or London.

Additionally, we added Business Development Executives (BDE) to the iCAN-Global team. BDEs are experienced executives familiar with incubation, economic development and the technological, import and export needs of their regions. Operationally, BDEs determine opportunities for commercialization, licensing, partnering, funding and government support within their specific regions. And because they understand the cultures, languages and methods of doing business in their regions, they are invaluable to the iCAN-Global infrastructure. iCAN-Global has BDEs in 16 countries, with additional locations being reviewed on a continual basis.

iCAN-Global provides on-demand business, technological and commercialization advisory services to clients from any location through our network of academic institutions, advisors, mentors, service providers, technologists and BDE’s. To maintain a global collaborative presence, we developed the iCAN-Global Cloud, a cloud-based information management system that provides file sharing, video conferencing and data backup software. This cloud platform allows employees, clients and management in different locations and time zones to communicate and share resources securely and efficiently. The iCAN-Global Cloud, a key component of the iCAN-Global brand, provides clients with a unified and cohesive image of a collaborative and digitally connected organization.

Moving on

In summary, virtual incubation is more than just a philosophy; it is a mindset. In many cases, a virtual transition is a complete departure from the norm and is not for everyone. We have invested an inordinate amount of time and resources cultivating a geo-diverse network of experts, instituting a cloud-based collaborative information technology data management system and developing an innovative management team. We would encourage you, your incubator and most of all your clients’ to consider a shift from from traditional to virtual incubation - for us there has been no looking back.