Tandon in the News
New York helps tomorrow's employers
- Claire Prentice for BBC NEWS October 12th, 2009
- Source: http://news.bbc.co.uk/2/hi/business/8290555.stm
Even on a grey Monday morning, the offices at 160 Varick Street, in the heart of Manhattan, are abuzz with creativity, energy and entrepreneurial spirit.
This is clearly no ordinary place of work.
The 12th floor open-plan office space, just off Broadway, is part of New York City's effort to kick-start the economy by encouraging entrepreneurialism.
At this start-up incubator, the city is offering 27 budding new companies desk-space with a prestigious address and access to some of the city's leading business brains.
They pay as little as $200 (£126) a month per desk, a fraction of the market value.
Small businesses have a famously high failure rate and New York is an expensive and fiercely competitive place to set up shop.
To help the 27 succeed, the incubator - the result of a collaboration between the City of New York, Trinity Real Estate and NYU Polytechnic Institute - gives them access to business seminars, mentoring services and networking opportunities.
Crucially, they also have the chance to meet angel investors and venture capitalists.
The start-up companies at the Varick Street incubator were selected from more than 300 applicants and represent a cross-section of technology and other firms.
They include a green retrofitting company, a digital forensics firm, an online brokerage company and a social networking website.
"We selected companies who would benefit the most from what we had available and who could, in the quickest time possible, start creating jobs," says Bruce Niswander, the director of the incubator.
Some of the entrepreneurs are in their 20s and just out of college; others are pushing 60 and come with a lengthy business pedigree.
"Even though we are working in diverse fields, we are all going through similar trajectories and dealing with the same issues, so there's a sense of camaraderie," says Tim Hobbs of Torch Films, a film fund management company and distributor.
This view is echoed by Jonathan McClelland, director of MJ Beck Consulting, an energy consulting company.
"Being an entrepreneur can be lonely," he says.
"It's inspiring to come to work here every day and to be around all this entrepreneurial activity."
Many of the business people have yet to draw a salary from their enterprise.
Rather than fostering resentment, it has created an environment in which the companies exchange expertise, contacts and information.
The start-ups can tap into the business and entrepreneurial expertise of the staff and students of New York University and its Polytechnic Institute.
They can also hire people from the student body of both institutions and the incubator will pick up the tab.
"One company needed 10 graduate mathematicians," says Mr Niswander.
"We put out the request and 25 came forward."
Stamp of approval
The incubator has enclosed offices around the edges, open-plan cubicles in the centre and a number of informal break-out spaces and a coffee area to encourage interaction.
One of the busiest cubicles belongs to Chubby Brain, an information services technology company that compiles data about start-up companies and the investors that back them.
"Being selected to be here is like a stamp of approval," says Anand Sanwal, one of the founders of Chubby Brain.
"It's like a validation, which makes us stand out from other start-ups."
Michael Chuang, founder and chief executive of ITB Exchange, an electronic fixed-income brokerage, agrees.
"Just by being here you pick up a lot of useful information and connections by osmosis," he says.
Next generation employers
Some of the start-ups are now working together.
Clifton Charles, a bespoke online shirt company, is collaborating with Iconcept Media Group, a company that provides fashion branding expertise.
In order to ensure the companies are "investable", they each had to compile a 24-month plan, addressing products, operations, marketing, selling and staffing.
They meet formally with Mr Niswander each month to focus on tasks, budgets and cash flow.
The goal of an incubator is to produce successful businesses that will leave the programme financially viable and independent and go on to create new jobs.
As they leave, they make room for new companies.
Demand has been so great, and the standard of applicants so high, that the Varick Street incubator will be expanded this autumn to house another 15 start-up companies.
Mayor Michael Bloomberg recently announced plans to create up to four additional incubators, which could house as many as 150 additional start-ups or 2,000 workers.
"The next generation of successful employers is being developed now," says Mr Bloomberg, himself the successful entrepreneur behind financial software services company that shares his name.
"We want to make sure as many of them as possible start and grow in New York City."