Editor's note: This is the second in a three-part series by Christine Wolf exploring Evanston's Technology Innovation Center. Yesterday she wrote about an Internet startup that works out of the space. In writing about that business, she became intrigued by the TIC and wanted to learn more, especially given the debate over its funding at a recent City Council meeting.
I’m not a tech geek, and I’ve never given much thought to what goes on inside an incubator. Furthermore, prior to my tour of the Benevolent.net office, I’d only considered an incubator as a go-to place for baby chicks and/or distressed newborns.
But, seeing the Technology Innovation Center for myself, I witnessed a thriving community of startups — 43 to be exact, with a waiting list of many others — utilizing the space at 820 Davis as well as within a second building at 825 Chicago Ave.
Benevolent’s office space is compact — I’m talking smaller than the bathroom in my house. But, for anyone passionate enough to run a startup, I’m certain that affordable office space — no matter how cramped — is far more appealing than a basement or garage.
So, what exactly happens in an incubator? I reached out to Chuck Happ, the TIC’s Chairman since 2006, to gain some insight. I wanted to know where the operation started, what’s been accomplished and where it plans to go. I also wanted to discern whether Mr. Happ is simply a “landlord” as Ald. Colleen Burrus (8th Ward) referred to him at the Feb. 13 City Council meeting. Here’s a rundown of what I learned:
The TIC, a 501c3 non-profit, began in 1986 and turned 25 years old in November. Over the years it’s supported more than 350 startups of approximately one to six people each. The startup companies generally come from — you guessed it — basements or garages, often having burned through family and friends’ money because of their specialized needs and goals. They also often need a source for support in areas ranging from marketing, legal advice, structural consultation, positioning and so on.
The TIC began as a joint venture between the City of Evanston and Northwestern University in the Research Park. According to Happ, for a long time it was one of the only vehicles where the city and Northwestern actually worked together.
And then they didn’t.
While Happ's experience has primarily been in real estate, (construction, development, sales, brokerage, finance, and now, investment), he’s also been involved in four business startups ranging from water filtration, a finance company, equipment leasing, and genetic testing.
According to Happ, The Incubator came to him in 2005 “when they were broke, homeless and in debt. I had the time (having run my second elected term on the New Trier School Board) and I had space, interest and the money to revive this award-winning incubator which was started in 1986. I did not want it to close up.”
Those first four years, Happ says [from 2006 to 2009], he was at the helm, creating new headquarters, leadership, capital and infrastructure. For instance, according to Happ, The Incubator is the largest private provider of bandwidth in Evanston.
In 2009, according to Happ, resources began falling short. Happ also felt the city benefited in numerous ways from The Incubator, and hoped to see it contribute to its operating budget.
Happ says during the 21-month period it received funding from the City of Evanston (in 2010 it contributed $100,000, then $75,000 in 2011 when the city changed its fiscal calendar), the organization met or exceeded its agreed-to goals.
He also points to The Incubator’s economic impact on the city. For instance, “Fifteen of our startups hired 23 new people in the last half of last year. That is what we are most proud of, helping these companies with the tools and networks they need to grow and expand. We now have seven companies doing over $1 million in sales.”
Think about it. That’s 23 new jobs here. Twenty-three more people having lunch here, shopping here, parking here and holding meetings here — often with even more individuals visiting from outside of Evanston.
What does The Incubator offer startup companies besides low-rent workspace with flexible terms? According to Happ, The Incubator:
* Assists businesses with plans for their expansion and marketing
* Helps businesses tweak their presentations
* Aids companies in identifying and articulating their core mission
* Helps with locating interns, employees and advisers
* Offers seminars on health insurance, SBA loans and Internet marketing
* Arranges pro-bono legal seminars
* Coordinates face-to-face networking with alumni of The Incubator and others, including venture capital contacts, angel investor sources, banks, etc.
The current Board of TIC consists of 1) Chuck Happ, 2) his wife of 37 years, Mary (who manages IT for a LaSalle Street law firm), 3) Tim Lavengood (their executive director for 12 years), and now (only for one month) 4) Nancy Radzevich who works in Economic Development for the City of Evanston. This was a requirement of the funding from the City. TIC also has a part-time, pro bono lawyer on staff and a very part-time marketing person (newsletters, reports, brochures).
Tim Lavengood is the only one who draws a salary. Happ reports that he himself works at the TIC nine hours a day; the lawyer works seven hours per week; and the marketing professional on an as-needed basis. Mary does the IT work and billing for phone and Internet plus financial reporting. Tim works a 40 hour week and receives a salary with insurance benefits.
Check back tomorrow for more of my interview with Chuck Happ and what he sees as the value of the TIC and its goals for the future.