THE INTERNATIONAL BUSINESS INCUBATOR 1776 IS WORKING ON A SPRAWLING NEW CAMPUS AT THE BROOKLYN NAVY YARD, ALONG WITH WAYS TO MAKE HIGH-TECH AND GOVERNMENT WORK SYNERGISTICALLY

BY MATT SCANLON

Though “business incubator” as a concept can be sourced as far back as the first time an iron plow was forged next to a bronze one, the term was formally coined in 1956, when Joseph Mancuso opened the Batavia Industrial Center in the Western New York city of Batavia. At the time, the urban area’s largest employer, Massey-Ferguson, suddenly shuttered, leaving not only an 850,000-square-foot unoccupied complex, but an unemployment rate of more than 20%. The Mancuso family purchased the building, and, unable to find a single tenant, offered a multitude of spaces to small and medium-size businesses that shared not only basic office services, but also assistance with capital raising and other startup challenges. Still open, the Center has filled millions of square feet of regional office space and created thousands of jobs.

From a mere 12 in 1980, the number of business incubators in North America is now approaching 2,000. And though their applications are as numerous as the number of business sectors they service, in the end, incubators’ mandate of sharing strategies, resources, and street smarts can be boiled down to reducing waste and saving lost hours. Because, as computer science professor and co-author of The Last Lecture (Hyperion, 2008), Randy Pausch, memorably put it, “The key question to keep asking is, are you spending your time on the right things? Because time is all you have.”

For 1776—a global business incubator launched and headquartered in Washington, D.C., but with additional campuses in Brooklyn, San Francisco, and Dubai—the majority of mentoring time is spent creating change in industries that impact essential human needs, such as education, energy, food and agriculture, financial technology, and making cities run more efficiently. These areas, not coincidentally, involve a significant amount of government and business interaction, and that nexus is a sweet spot in the 1776 mindset. Its events, speaker series, mentorship programs, and other resources help new businesses address areas as diverse as refining pitch ideas to structuring a capitalization table, from fundraising and marketing to building a sales team and outfitting technology needs. Brooklyn Members range from drone-based construction information facilitators AeroAnalytics (aeroanalytics.io) to Hacking Alzheimer’s, an app-based service that helps people with Alzheimer’s initiate memory triggers, provides companionship and entertainment, and helps ensure healthy routines (hackingalzheimers.com)—from smart radiator cover maker Radiator Labs (radiatorlabs.com) to CTY (cty.io), developer of the urban data analytics system Numina. All share (or have shared) custom-tailored resources to help solve startup challenges, particularly as they apply to governmental interaction.

“Entrepreneurs in these areas face hurdles they don’t face anywhere else,” explained Rachel aot, managing director of 1776 New York. “This is not as simple as putting an app on an app store; these businesses require partnerships…interaction with government regulators and industry leaders, because there are structural and regulatory barriers to entry. We want to be partners in helping startups navigate those challenges.”

“Corporations are finding a storm of technology and disruption raining on them from seemingly every direction,” reads part of the incubator’s on-line material. “A Member gains a lens into bold new solutions, as well as the culture, mindset, and tools entrepreneurs employ to think differently about the future,” with the ultimate goal of creating “scalable businesses in regulated markets, poised to drive change in areas that will make a positive impact on our world’s biggest challenges.”

The Brooklyn campus was launched last September, and currently occupies space in Building 280 at 63 Flushing Avenue at the Brooklyn Navy Yard. In March, it will begin the build-out, however, of a 30,000-square-foot top-floor space in Building 77 at the Yard, scheduled for completion in September.

Startups, which must apply for membership, are analyzed for both business potential and essential need applicability, and once approved, are provided with a range of resources, both in person and virtually. The latter is conveyed through an on-line platform, Union, which digitally presents material offered in the various campuses.

“You can take a class virtually…follow, say, our entrepreneurship roadmap, which walks you through all the stages of developing a product and bringing it to market, and you can also connect to our network of mentors,” Haot said. “We have hundreds of active mentors, and the way our system works is effectively on-demand. Instead of a traditional mentorship, where you are paired for, say, a year—and because some of these relationships can be hit or miss—ours fits within the needs and schedules of the people in our network. First we identify skills needed and challenges to overcome, and our system will algorithmically analyze and match Members with mentors for the best fit. When they log onto Union, they will be fed a list of classes and mentors who have office hours. They can reserve hours and meet either virtually or on campus. We support 5,000 mentorship sessions per year, and at the end of each, the startup will rate the mentor and vice versa, so we can further refine who’s best matched with whom.”

Haot pointed to Aero Analytics as a representative example of where the right advice at the right time is pivotal. The company uses drones to examine structures like bridges, cell phone towers, and cranes, and visually identifies the presence of rust or other worrying conditions. The potential of reducing the need to send human inspectors aloft to do the same work is just one of its advantages, but the learning and procedural curves of market entry in sectors like this one can be daunting.

“First, there are specific regulations regarding where you are allowed to fly a drone,” said Haot. “These are from the NYPD and airport authorities, and then there’s the FAA. The industry itself is also changing so quickly that it can be difficult to keep up, but we were able to help them navigate all those challenges.”

Key players in the incubator are 1776’s Partners—companies that offer financial and/or advise assistance to startup Members, and which can (along with 1776 itself) choose to directly invest in Member enterprises. Partners include Microsoft, Dell, AARP, AT&T, Capital One, Xerox, and Uber, and their size and industry sweep mean that, as Haot put it, “We want our [Member] bar to be very high…want to make sure that every single company that’s a part of our community is adding value not just to that community, but also to partners and investors in the industry as a whole. To that end, we are not a typical three-month accelerator or incubator program; the companies we are working with require longer runways and timelines to handle the challenges they’re experiencing.”

“One of the advantages of 1776 is that it’s a place where Members are regularly connected to leadership in government and industry,” said A. Pérez-Benzo, co-founder and CEO of Aero Analytics. “As a member of the 1776 Fellowship Program, our team has participated in private roundtables with some of the top venture capitalists on the planet, as well as government officials from around the world. In November, we got to compete in Dubai for the 1776 DEWA Future Utility Cup, where we won $20,000, office space in Dubai, and more importantly, the opportunity to contract with the Dubai Water and Electricity Authority.”

Part of a $185 million renovation of Building 77, the new 1776 offices will feature a 3,000-square-foot event space, collaborative open-plan work spaces (many custom designed for Member needs), and private outdoor areas for events. Part of the appeal of the renovation will be its street access (no security perimeter or gates), a local food court with Brooklyn Brewery as an anchor tenant, and the fact that it’s now the terminus for a December 9-approved free City bus shuttle service stemming from 13 subway stations.

The proposed next step in 1776’s community building process will be moving beyond even its Member/Partner network to embrace other incubators. Capital Factory in Austin Texas, and the Richmond, Virginia-based Annex are currently sharing resources, relationships that Haot described as part of a “connective fiber that can knit together the global tech ecosystem.

1776
Building 77, Brooklyn Navy Yard / 1776.vc
memberships@1776.vc