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For an entrepreneur, figuring out how to get things done today with very little available capital is the key to successfully keeping his/her latest idea percolating. In the past, venture firms were eager to support early stage concepts because they could take a substantial stake, help control the decisions and directions taken by the company, and produce good returns for their investors if the concept proved viable. For the entrepreneur, this allowed the company to hire people, file patents, accelerate development, and, in general, make great strides on their road to success. In fact, some venture firms even financially supported incubator companies, such as Scout Medical Technologies and Seattle Medical Technologies, of which I was a part. Many such incubators had no upfront concept or product in mind.
In recent years, however, the early seed funding model of starting companies has fallen short of expectations, in a large part, due to the collapse of the economy. Venture firms are understandably taking less risk on early startup projects. Angel investing has taken up much of the torch bearing to assist entrepreneurs in their early quest, and angel investment organizations have sprung up in most major cities to foster this route. Still, there is a clear need for other mechanisms for entrepreneurs to get support in the early stages. So what other routes or mechanisms are available to the individual or small company before attracting venture level capital?
I was recently searching for help and advice in developing a mobile device app and was introduced to one new innovative mechanism by Seaton Gras, who has organized an incubator called Surf Incubator. Seaton has created an organization that fosters interaction between developers of apps for iOS and Android devices as well as web applications. This has been accomplished by hosting “meetups” and events in which people can discuss ideas and problems facing the small entrepreneur and find quick, low cost solutions to their problems. Now he’s acquired a substantial physical space on 2nd Ave in Seattle to permanently house Surf Incubator. In this space, digital entrepreneurs will be able to set up shop right next to others who are facing some of the same issues as they develop their apps and they can learn from each other. For a modest monthly fee, an entrepreneur can have his/her own office complete with all the resources typical of larger businesses as well as daily interaction with other developers. To me, this sort of entrepreneurial creativity is what is needed across the board for startup entrepreneurs in every arena. I could easily see a medical device or biotech startup company in an incubator similar the Surf Incubator, all participants sharing the overhead costs and helping each other when needed. To me it’s much like the barter system only more an exchange of intellectual commodities for mutual benefit. For the times, this feels right to me.