Incubation Station Turns Eye to Austin’s Consumer Products Startups

5/20/14Follow @angelashah

Austin is rightly known for its tech hardware and software startups, but Shari Wynne felt there was a need to support other entrepreneurs, namely, those making consumer products.

So, she took a page out of the book of tech accelerators like Techstars and Capital Factory and founded Incubation Station in 2012, a 14-week program to guide consumer goods startups along their way to growth and profitability.

“A lot of people weren’t paid attention to because of the focus on tech,” says Wynne, who moved to Austin 18 years ago to found MWR Legal, a consultancy geared to startups.

On Tuesday evening, Incubation Station’s third class will be showcased in front of 300 investors and entrepreneurs. The startups are:

SlimRitas is a margarita mix made with fresh juice and a combination of all-natural, zero-calorie sweeteners that the company says has no diet aftertaste.

PrideBites makes foam-based dog toys that are durable, customizable, and stylish.

The Seaweed Bath Co. designs bath products to naturally nourish and soothe dry, irritated skin, hair, and scalp with a combination of a specific species of seaweed with other natural ingredients.

Truth Spirits is an absinthe distiller.

Bona Dea sells bulk whole grain and gluten-free flour mixes for retailers and restaurants.

Incubation Station invests $5,000 per founder plus $3,500 worth of legal expenses—as well as providing mentors and programming—to each startup, in exchange for a stake of between 2 percent and 10 percent of each company.

While it, at first, might seem an odd focus in the backyard of Michael Dell, Wynne points out that Austin has also had notable successes in retail. Consider, for instance, Whole Foods. (NASDAQ: WFM).

Among the retail entrepreneurs and investors in the audience this evening will be Clayton Christopher, who founded Sweet Leaf Tea and sold it to Nestle for $200 million in 2011. Christopher is also the co-founder of Deep Eddy Vodka, which has expanded its distribution to 36 states since its founding in 2010. Another mentor is Scott Jensen, co-founder of Rhythm Superfoods and former CEO of Stubb’s Bar-B-Q.

Wynne admits that reaction to a consumer-products incubator was skeptical, at first. “Now, they’re very interested,” Wynne says. “They wondered if it would work; we have quite a bit of momentum now.”

Among Incubation Station’s successes include Thunderbird Energetica, a maker of nutrition bars that, prior to entering the second class last year, had sold $30,000 in product. Today, the company is selling one million bars a month, Wynne says.

The Austin program is among a handful across the country that cater to consumer-facing startups, including The Brandery in Cincinnati, OH, and AccelFoods in New York.

“People are hungry for different kinds of investments,” Wynne says. “We can help to build a diversified economy.”

Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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