For more than seven years, the Incubator without Walls program at the Nussbaum Center for Entrepreneurship in Greensboro, N.C., has drawn industry attention – not only because it is an effective affiliate incubation service, but because it charges affiliate members more for services than it does resident clients.
"Even so," says Sam Funchess, president and CEO, "it's a very good deal for the affiliate. It's especially useful when we have clients that come to us knowing very little, including whether entrepreneurship is right for them. It doesn't make sense to load them up with overhead, with an office and phones and Internet service. We'll say, 'Let's start off slow – you'll learn quickly whether you can run your own business.'"
If things work out, the transition to incubator residency is easier, he says. Sometimes, people get a job, lose enthusiasm or decide the strains of owning a business aren't what they expected. "This lets them find out before they've done a stack of paperwork and entered into contracts," he adds. "And it benefits us; in some ways, you might think of it as a defensive tool. But it's also a tool that lets clients find their comfort, too."
An inexpensive testing of the waters isn't the only reason that entrepreneurs participate. Some already have facilities where they produce their products but need access to conference rooms, Wi-Fi, and copy and fax machines. "For some, a place to meet clients and have a street address is important." Use of the Internet, he says, is one reason affiliates pay more than residents. "We let them use our Wi-Fi, while resident clients need to contract for their own Internet service."
Nussbaum's IWOW program has never been a focus of the incubator, nor a crucial part of its income stream. "We've always looked at it as ancillary income," Funchess says. "It has been more of a tool that we use."
That could change, though, when the 25-year-old center moves into its new facility, a former Carolina Steel fabrication building. When the $3.2 million renovation project is completed later this year, the new building should have plenty of room for the incubator's current 60 clients – and perhaps an enhanced affiliate program.
"The challenge we have had from a marketing perspective is that we're not currently on a busy thoroughfare, not in an aggregated work environment like a downtown," Funchess says. "The new facility is on one of the main north-south corridors, so it will be more convenient, and more aggressive marketing of the affiliate program makes more sense."
The affiliate program, Funchess says, provides all the advantages of incubator residency without the residency itself.
"The thought and reasoning is to have a very low entry point, very low risk, low hurdles to get an idea up and running," he says. "The interesting thing is that for it to work, you really need to be in a high-traffic area and have a landing spot or meeting space from time to time. And don't underestimate the importance of a street address. We'll now have all those things."—Dennis E. Powell
Keywords: affiliate program, incubator without walls
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