Campus incubators boost small business in South Jersey, but for how long?
After 12 years working in the corporate offices of an independent cable contractor, 47-year-old Mount Laurel resident Keith Reynolds still remembers the day he was shown the door.
Reynolds, a father of six and the company’s safety director, was dismissed along with 150 of his fellow coworkers in a sweeping and unexpected layoff. The stunned feeling never left him, he says. “I said to myself, ‘I will never be complacent like this ever again,’” Reynolds says. “I started applying myself to never go back to that world again.”
Reynolds spent some time honing a vision of what his career could be in a world where it was contingent on his own sweat equity. Two years later, he sits at the helm of WTER/Talk Exchange Radio, an online broadcast platform that streams live, original content four days a week. Some 35 broadcasters from the local real estate, financial, and small business sectors comprise its lineup.
“We bring real people on, and we get people to talk about their business,” Reynolds says.
Entrepreneurism is a subject with which Reynolds is quite familiar: He developed the idea for WTER essentially in his backyard, in the business incubator at the Mount Laurel campus of Burlington County College (BCC). One of 11 such facilities in the state, the BCC incubator offers a low-rent, brick-and-mortar office space as well as access to many other resources for emerging South Jersey businesses. Tenants specialize in everything from technology to retail, health care, and finance, and include the Burlington County Regional Chamber of Commerce.
According to Rebecca Corbin, vice president of institutional advancement and BCC Foundation director, the 20,000-square-foot incubator is “a real partner” in the development of these startup companies that “help[s] them realize the dream” while providing some small-scale workforce development.
Some of the most successful tenants may “become serial entrepreneurs,” Corbin says, selling off one business and starting up another soon after; others will tweak several ideas until they find success. Some employ several workers; some are “solo-preneurs,” she says. Since the space was dedicated in 1998, more than a hundred startups have passed through its halls.
By situating the incubator on the college campus, tenants like Reynolds also may access the roster of BCC educators and administrators, who provide not only a sounding board for ideas, but valuable input on growing their businesses into sustainable entities. Through the college, start-ups also enjoy “a broader array of training and educational services,” Corbin says, including intern recruitment, grant writing, and legal assistance.
“With startup businesses, there is a high rate of failure, but with that kind of incubation support, we give them every opportunity to help things happen,” Corbin says.
The feedback is more than just encouragement, Reynolds says, recollecting how the instruction he received from his advisor at the incubator turned around his thinking on something as elementary as how to treat his business plan.
“At one point I was having trouble getting customers in to generate my business,” Reynolds says. “We went back in and looked at the business model and we changed it; just a few words; how I was saying the message. As simple as that, and we started taking off.”
The incubator also fosters in its tenants a culture of collaboration that contrasts the typical corporate office environment, Reynolds says. That community spirit is a key component of the co-working environment that emergent businesses need to develop, he says.
“In the work world, people don’t like to ask,” Reynolds says. “I don’t know why. But by being here ... it’s kind of our own community, which I love. If I need some IT help, I know there’s guys out there in the hallway that I can go and talk to, and it’s not like his meter’s running when he’s talking to me, and vice versa.
“I think that camaraderie and that community type of feel is really good,” he continues. “Business is hard, and the economy being what it is, you need a good network, and I think that’s what the incubator is.”
The incubator isn’t just a think tank or a make-nice playground, though. Reynolds considers it an intentional creation of the entrepreneurs involved, many of whom have soured on the disposable experience of the corporate hierarchy. In a world where even Thanksgiving is no longer a guaranteed day off and fringe benefits are being whittled away from the bottom up, Reynolds views the choice to become self-employed as a statement against the expectations of cubicle life.
“The corporate world is tough,” he says. “It’s not a friendly thing, and a lot of people have health issues from being in that type of environment. I think people say, ‘I never want to go back to that,’ and that’s why I see a big surge in family-owned businesses.”
The difference this time, Reynolds says, is that the mom-and-pop shops of today aren’t corner pharmacies and delis; they’re software companies and financial consultancies. And he believes some big companies are going to emerge out of this. “A lot of these companies that are huge that are popping up weren’t developed in the corporate world. That’s what people are really trying to do,” he says.
Seeing his neighbors succeed is also motivation. “When we do have a success story, where one of these businesses can make it and move out of here, it’s a great feeling, and it’s really through the help of all of us,” he says.
But migrating tenants from the incubator into the larger regional economy is often a process more easily planned than executed. The Rutgers University-Camden business incubator, home to some 15 tenants in its 20,000 square feet of office space, has had “an up-and-down history,” says Larry Gaines, vice chancellor of administration and finance at Rutgers.
“The goal is to bring in businesses, incubate them, and, when they’re ready to leave the nest, push them out so they can go and expand,” Gaines says. “Sometimes it’s a little difficult to get them to grow to the size that you want them to be to leave the nest, and even if you are ready for them to leave the nest, they don’t want to leave.” The incubator aims to keep a mix of 80 percent technology-related tenants, with an emphasis on smaller, but established companies that “have a pre-ready or at-revenue-stage product,” says Greg Gamble, CEO of the Rutgers-Camden incubator.
According to Gamble, the incubation process is meant to take no more than three to five years, but some tenants remain with the facility longer than that.
“Economy plays a big role in how many people are going to start businesses,” Gamble says. “Some businesses have great products, great ideas, but how do you package that? Where are the resources, where’s the financial backing to turn into investment capital for these businesses?”
Part of the problem, Gaines says, is that even though the city of Camden offers tax credits and other incentives for businesses that locate there, many of the home-grown start-ups that would be willing to aid in its economic renaissance can’t put down roots there for a lack of infrastructure. Instead, many incubated businesses settle in nearby Pennsauken, or across the bridge in Philadelphia.
“The goal is to build the capacity of both the need and the inventory here in the city so these people can graduate and develop,” Gaines says. “One of the major issues that we’ve found is finding space in Camden.”
Another challenge comes in quantifying the successes of the incubators themselves. Neither Gaines nor Corbin could offer immediately any hard data on the economic impact of the business incubators to the regional economy of South Jersey, in terms of job creation, tax ratables, or revenues generated. Gaines says that the university has much more data on the economic and civic impact of the Camden “eds and meds” sector than on incubator-related business development.
Even if the incubator model itself doesn’t hold up, Gaines foresees that the co-working and cohabitation features of its model could be carried forward more easily in an alternative setting that fits the realities of the current real estate market. In whatever form the new startup economy of South Jersey materializes, the optimism of entrepreneurs like Reynolds is unfazed.
“Don’t be scared,” he says. “People are scared to make a move, I know the banks are scared to lend. There’s going to be tough times. There’s going to be great times where you’re going to compete. There’s places like this that will definitely support you.
“Take the leap of faith.”
Published (and copyrighted) in South Jersey Biz, Volume 4, Issue 8 (August, 2014).
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