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Which came first, the incubator or the concept?

by Carol James

February 2002

Joseph L. Mancuso of Batavia, N.Y., has been in business incubation longer than anyone. More than 40 years ago, Mancuso combined nearly 1 million square feet of empty space with a strong desire to put people to work, and developed "America's Original Business Incubator." Mancuso, now 82, continues to work at the Batavia Industrial Center, the incubator he founded in 1959, providing his experience and advice to the incubator and serving as chairman of his family's business.

"I still have what I think is my purpose – to put people to work," he says. His son, Tom Mancuso, is president of Joseph L. Mancuso & Sons. Two other sons also work in the company that operates the mixed-use incubator housing such diverse clients as craftsmen, nonprofit groups and artists, and manufacturing and technology companies.

Serendipity and a chicken producer led the family to incubation. The story began when Massey-Ferguson closed its Batavia plant in 1958, vacating 850,000 square feet of multistory buildings and driving unemployment to more than 20 percent in the community of about 16,000 residents. The Chamber of Commerce couldn't find a tenant for the facility, so the Mancuso family purchased it. "The Mancuso family wanted to reverse the situation," Joseph Mancuso says. His father, Ben, who was president of the company, gave Joseph the job of finding a tenant for the empty buildings. "He gave me an impossible job – and I'm good at that," Mancuso says.

It took him about a month to figure out that no large company was going to move to Batavia to occupy the empty space. But he had to start somewhere. "My first tenant occupied 2,000 square feet," he says. "It's crazy to go after those big guys in a little town like Batavia. It made more sense to go after the little guys." Mancuso filled up most of the ground floor, then second- and third-floor spaces. At one point, a chicken-growing company leased 80,000 square feet. That's when it hit him: "They were incubating chickens and we were incubating companies."

It made sense to give the name incubation to what Mancuso was doing because he didn't just rent space – he provided companies all kinds of assistance, from shared office services to below-market rents to help securing financing. But unlike today's incubators, which open their doors planning to provide those services, Mancuso provided new services as needs arose.

"The first thing that I noticed [was] they didn't understand the bookkeeping," Mancuso says. "I had a really good secretary, so I would loan him out."

Mancuso quickly learned that financing, too, was a major hurdle for his prototypical clients.

"The biggest problem was money," Mancuso says. "Sometimes we backed loans, or made the loans ourselves." On other occasions, Mancuso stumped for individuals willing to make loans. "I went out and hit all my friends to help start some of these [businesses]; some of us got killed and some of us made real money," he says. "We did well altogether, but it was risky."

The Mancusos also performed repairs and maintenance on the buildings – some of which were built before 1900 – and used their trucks to help businesses move and distribute products.

Failure was not an option for Mancuso or the companies that sought space in the center. He refused to listen to entrepreneurs who didn't think they would succeed. He just asked them "Why not?" and did whatever he could to help them – all the while giving more meaning to the term "business incubation."

According to Mancuso, once the community saw what the incubator could do, businesses started looking for it. Perhaps the incubator's success grew from the entrepreneurial family's knowledge of what it takes to run successful businesses. The family owned a hardware store and three auto dealerships, built a dance hall and restaurant, and began to buy property in the town.

Dedicated staff and unwavering resolve kept the center going. "It took five or six years before we got manageable, to have enough to pay the bills," he says. "We weren't full by any means." Mancuso was determined to help the local economy, and the center now serves more than 100 companies. Those clients employ between 400 and 450 people. That's not as many as Massey-Ferguson once employed, but over the years clients have employed as many as 1,200 people at a time. BIC has graduated more than 1,100 companies, most of which moved into Batavia and Genesee County.

Sometimes Mancuso's actions paid off in ways that he couldn't foresee. He gave one organization, the Board of Cooperative Education (BOCE), free space in the incubator on the premise that it could pay once it got going. BOCE began by teaching youths how to solder and repair cars. It grew to 100,000 square feet in the incubator (for which it was paying $1 per square foot) and eventually built its own building.

"Now we use them to help us – they can train welders or woodworkers or whatever we need," Mancuso says, to maintain the buildings (including an adjacent 100,000-square-foot facility purchased a few years ago), build out space to meet client needs, and provide services to clients. BOCE also is returning to the incubator – setting up a classroom program there to better integrate its youth and adult students into the workplace.

Today, the city boasts an unemployment rate of about 3.2 percent for its 16,000 residents. That's not directly attributable to the BIC, but Mancuso has been successful enough in his business development efforts to earn recognition from the Northeastern Economic Developers Association and the State of New York. He's also among 14 incubation industry pioneers to receive NBIA Founders Awards.

While Mancuso was collecting awards and speaking engagements (he's spoken at several NBIA events), the BIC continued to garner clients and today offers services unheard of when the BIC opened – such as a variety of Internet bandwidth options. Of course, the BIC still provides assistance locating sources of financing and continues to offer accounting, bookkeeping and distribution services. However, the incubator's program is more formal than in the days when Mancuso simply responded to individual company needs.

He didn't have a concept for incubation then, but knew that what he was doing was different. "It had never been done that I can remember," he says. Now it's a vibrant and growing industry.

Keywords: history of business incubation, people

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