How to Attract the Right Clients to Your Incubator
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1. Target specific markets rather than using broad marketing. Focus on leads most likely to become clients. 2. Highlight recent successes of current clients and the services provided rather than general plans or potential future results. 3. Develop a strategic multi-year marketing plan with specific, measurable activities and goals for each year. 4. Use a variety of traditional and non-traditional marketing methods, from newsletters and case studies to social events and speaking engagements. 5. Continually promote the incubator's brand and services through multiple communication channels.
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How to Attract the Right Clients to Your Incubator
- 1. AttractingClients© M. Long, 2013
- 2. John M. Hanak, J.D. – Statewide Director, Purdue Technology Centers, Indianapolis, IN Karl R. LaPan, M.S. – President & CEO, Northeast Indiana Innovation Center, Ft. Wayne, IN Mark S. Long, M.S. - President, Long Performance Advisors, Ellettsville, IN & Clinical Professor of Entrepreneurship, Kelley School of Business, Bloomington, IN AttractingClients© M. Long, 2013
- 3. Identifying your “Target Market” How to understand and effectively communicate your incubator‟s value proposition to prospective clients How to design and implement reasonably priced marketing strategies for client attraction – getting the “word out” How to evaluate clients for entry into your incubator How to design programs that encourage client retention and growth AttractingClients© M. Long, 2013
- 4. Finding the “right” clients? AttractingClients© M. Long, 2013
- 5. What is a “market”? And where is it? The $2.00 definition - The market for a particular item is made up of “existing and potential customers who need your product and have the ability and willingness to pay for it”. AttractingClients© M. Long, 2013
- 6. Cutting to the chase – are Incubators/Accelerators/Research Parks all about START-UP COMPANIES? Well… AttractingClients© M. Long, 2013
- 7. Typically, many incubators classify themselves based on the markets they serve ◦ To evaluate the markets, many municipalities/states/countries perform a “feasibility study” ◦ Feasibility studies can help determine “deal flow”, can assist with obtaining grants, and also determine “markets served”, among other things ◦ Universities often classify incubators according to Intellectual Property production AttractingClients© M. Long, 2013
- 8. Specialty Incubation – specific market niches – health/bioscience/biotech/manufacturing/kit chen/retail/IT/agribusiness/? Mixed-use – multiple opportunity Determined by systems/layout/capacity? Local/Regional markets, local “spin-outs”, sources of IP/companies? Resident/Affiliate/Associate Clients? AttractingClients© M. Long, 2013
- 9. Pre-Market Staging • Affiliates • Associates • Co-Space • Virtual Build relationships with companies in your target market even before they are ready to become a resident client. Find ways to deliver value to these ‘pre-market’ prospects tp such an extent that when they are ready for space they don’t consider anything other than becoming a resident client. AttractingClients© M. Long, 2013
- 10. Traditional Sources of IP – Universities as a source of start-up companies? 12 Stanford - Equity liquidated to date Equity Cash-out ($ millions) 10 8 ~$364 million 6 Amati (Texas 4 Instruments) 2 $8.0 million 0 Abrizio (PMC-Sierra) $9.7 million 5 7 9 1 3 7 5* 9 9 9 0 0 0 0 4- 6- 8- 0- 2- 6- 4- Google™ $336 million 9 9 9 0 0 0 0 FY FY FY FY FY FY FY Fiscal Year *Graph does not include Google equity cash-out in FY04-05 AttractingClients© M. Long, 2013
- 11. AUTM 2009 Survey Results: ◦ Products, startups and licenses/options: 658 new commercial products created 5,328 total licenses and options executed, 4,374 of which were licenses 596 startup companies formed, 435 of which had their primary place of business in the licensing institution‟s home state 3,423 startups still operating as of the end of FY2009 8,364 new U.S. patent applications, and 3,417 issued U.S. patents AttractingClients© M. Long, 2013
- 12. Where ARE these Markets/Clients? Tech or Non-Tech: There are many more sources…. • Community • SBDC Clients • Bank Clients • Kitchen Ideas • Schools • Associations and organizations • Networking events BOTTOM LINE: Make yourself known to all apparent market sources and connections so they can make referrals to you. Then you can assess and decide…at this point all you want is VOLUME! AttractingClients© M. Long, 2013
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- 14. AttractingClients© M. Long, 2013
- 15. Additional logos for Anchor Tenants AttractingClients© M. Long, 2013
- 16. What an Incubator Can Mean to Even More Mature Companies… http://www.youtube.com/watch?v=_oZva1U_0xg AttractingClients© M. Long, 2013
- 17. As Location Offices But remember: They must be accretive to the community you are constantly building. AttractingClients© M. Long, 2013
- 18. And HQ for our “SweetSpot” Clients AttractingClients© M. Long, 2013
- 19. What is Your “SweetSpot?” • Are you leveraging it? • Are you playing to it? • Does your market audience know it? • Does the community at large know it? • Do your current clients know it? AttractingClients© M. Long, 2013
- 20. Entrepreneurs – new and serial Existing companies/Business owners Students AttractingClients© M. Long, 2013
- 21. Displaced Professionals Hospitals/Entrepreneurial Physicians Faculty with Applied Research AttractingClients© M. Long, 2013
- 22. Residential Clients Affiliate Clients Coworkers Anchor clients EVERYWHERE! AttractingClients© M. Long, 2013
- 23. AttractingClients© M. Long, 2013
- 24. ElizaJ's distinctive deliverable restrooms include fresh flowers, designer soaps and lotions, name brand paper products, wicker waste baskets, air fresheners, and most importantly - fresh water. The Portable Sanitation Association International reports that the portable sanitation industry has developed into a $1.5 billion a year industry. Total Capital to Invest: $34,472 - $134,005 AttractingClients© M. Long, 2013
- 25. Don‟t overlook ANYTHING – opportunity can knock at strange times in strange forms… AttractingClients© M. Long, 2013
- 26. AttractingClients© M. Long, 2013
- 27. AttractingClients© M. Long, 2013
- 28. What are you offering your clients? AttractingClients© M. Long, 2013
- 29. What do you offer them? What do you have that is: ◦ Unique ◦ Necessary ◦ Important to them ◦ Not duplicated ◦ Helpful ◦ Recognized ◦ See as available? AttractingClients© M. Long, 2013
- 30. AttractingClients© M. Long, 2013
- 31. Getting the “word out” AttractingClients© M. Long, 2013
- 32. AttractingClients© M. Long, 2013
- 33. Some Examples…. http://purdueresearchpark.com/ What’s Pertinent? • Use of social media • Use of video • A platform for other communication methods • A reference point for prospects • The marketing of services AttractingClients© M. Long, 2013
- 34. “Marketing is not selling; marketing is building a brand in the mind of the prospect” – Al Ries What is your “brand”? ◦ An extension of your value proposition ◦ An extension of your mission ◦ A reflection of your goals ◦ A reflection of your sponsor(s) AttractingClients© M. Long, 2013
- 35. “We‟re not a University company” “We‟re probably not a fit” “We‟re not a start-up” “I don‟t think we‟re „that‟ kind of company” “I don‟t think we need/would benefit from/would fit into that kind of program” “A business WHAT?” AttractingClients© M. Long, 2013
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- 38. Identify yourself! Sources/States of Growth & Progress/Types &/or Industries/Qualifiers – be clear Exercise – one paragraph “elevator speech” – 60 second identifier AttractingClients© M. Long, 2013
- 39. Can you easily explain the difference between you and your “competition”? “Why should I come here and pay these prices when I can go down the street and pay $8.00/sf?” “An office is an office; why should I come here?” “Why would I move in someplace where I have to report my earnings, attend meetings, & eventually move out?” AttractingClients© M. Long, 2013
- 40. All the pieces… http://www.niic.net/downloads.aspx http://www.purdueresearchpark.com/incubat ion/index.asp AttractingClients© M. Long, 2013
- 41. Advertising & Promotion ◦ Brochures, pamphlets, information sheets ◦ Annual reports, newsletters ◦ Billboards, lightboards ◦ Emails, direct mail, newspapers, posters, bulletin boards, radio, television, web pages ◦ Press kits Public Appearances, speeches, presentations, special events, announcements, press releases, “free” publicity AttractingClients© M. Long, 2013
- 42. Do it yourself? Use University resources? Hire an advertising agency? ◦ Local? Regional? National? AttractingClients© M. Long, 2013
- 43. Do you have a “marketing budget”? What does it “cost you” if you DON‟T market? “I don‟t need to market” ◦ Clients come to me ◦ I have plenty of clients ◦ I already know/understand my market ◦ I can‟t afford to market ◦ Everyone already knows me AttractingClients© M. Long, 2013
- 44. How do you make your decision? AttractingClients© M. Long, 2013
- 45. AttractingClients© M. Long, 2013
- 46. Example 1 – the Simple Application Why simple? AttractingClients© M. Long, 2013
- 47. The Initial If Positive, Application goes Application to Advisory Board Committee Initial Review by Incubator Manager Re-application in 6 Company does presentation Months or admission For Advisory Board Advisory Board makes recommendation For admission/re-application Company Admitted/advised to re-apply AttractingClients© M. Long, 2013
- 48. Example 2- an assessment tool AttractingClients© M. Long, 2013
- 49. A Quick Guided Tour AttractingClients© M. Long, 2013
- 50. We have a multi-purpose (mixed-use) University-affiliated incubation facility, 40,000sf, 40% occupied, 3 years into our program. We are approached by the following company: ◦ (describe company here) AttractingClients© M. Long, 2013
- 51. How do you review/retain clients? ◦ Regular financial reviews – quarterly financial reports (requirement built into lease/master relationship documents) ◦ Regular meetings (with CEO/CFO) ◦ Occasional “drop-ins” ◦ Formal reviews (semi-annual) – with committee ◦ Milestones and progress requirements Financial Personnel Funding AttractingClients© M. Long, 2013
- 52. Programs? Facilities? Counseling? Money? AttractingClients© M. Long, 2013
- 53. Define Your Retention Strategy • How critical is ‘retention’ to your operation? • How do you balance retention against graduation? • How long do you want to keep your clients? • Long-term? • Until they can survive on their own? • Are you robustly servicing your clientele? • Survey, Survey, Survey AttractingClients© M. Long, 2013
- 54. Elements of a Marketing Strategy AttractingClients© M. Long, 2013
- 55. Marketing Principle #1: The marketing strategies must aim at precise targets verses “shotgun” distributions of information to the general public or trade and professional sectors. Casting wide nets to scoop up good leads among a large volume of responses is not productive. AttractingClients© M. Long, 2013
- 56. Marketing Principle #2: The marketing strategies should showcase the feature services of the incubator and results of what has recently happened to advance the business interests of particular incubator clients versus focusing on general plans and what might be an expected result for a client in the future. AttractingClients© M. Long, 2013
- 57. 10 ELEMENTS OF A STRATEGIC MARKETING PLAN TARGETED ACTIVITY 2011 2012 2013 1. Newsletters Monthly Monthly Monthly 2. Case – Records six/year seven/year eight/year 3. Pro-Active Speaking 3/12 4/12 5/12 Engagements/Total Speaking Engagements 4. Sponsored Social Event 1 2 4 5. Collaboration 1 X 3 clients 1 X 6 clients 1 X 7 clients 6. Pro-active Host to Meetings 2/year 3/year 6/year 7. Recruit Mentors 2 to 4 4 to 6 6 to 10 8. National Collaborations 1 1 2 9. Taster Demo’s 2/year 6/year 12/year 10. Support Services Suite Members 2 6 14 In addition to the Traditional Marketing a continued focus will be placed on: Brochure Leasing Guide Press Conference Billboard Site Signage Co-sponsorship of Local Events Facility Tours AttractingClients© M. Long, 2013
- 58. Identify the Principles You Need to Follow _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ Please share one or two with the group……….. AttractingClients© M. Long, 2013
- 59. Identify three elements of a strategic marketing plan for immediate use __________________________________________________ __________________________________________________ __________________________________________________ AttractingClients© M. Long, 2013
Hinweis der Redaktion
- Ask – “How many are contemplating planning or building/acquiring a facility? How many have a “new” (one year or less) facility? How many have an established facility and are new to incubation? I guess the rest of you are just here because you have to be! Regardless – bear with me today as we go over some key topics in facility management – taking care of your building, your clients, your operations – hopefully this will be interactive, informative and valuable as we cover a variety of topics, ideas and information!
- Transition – today – talk about critical issues first – checklist of primary issues you will be faced with in managing a multi-client facility – first, we will talk about the most common issues most managers face and how those issues affect you and your clients, and what “best practices” to use in dealing with these issues/problems/items…We’ll be using a LOT of powerpoint slides, I will apologize in advance, but there are not a lot of good “acceptable” videos out there on Facilities Management, and to get all this information across to you as rapidly and cleanly as possible, it was necessary to put it on many, many slides. I’ll do my best to keep you awake today – we’ll take breaks, don’t worry! And I hope you chip in with questions and comments whenever you like. This is “critical information”, and I try to get as much of it to you in a day as possible, and to “stay in touch” in the future as a resource after today!
- Yes, there IS an “International Facility Management Association” – a group dedicated to those who “manage buildings/facilities” – they assist with design tips, maintenance ideas and other valuable information on facilities management. The IFMA has a website (IFMA.ORG) that is full of good information about managing a multi-client facility.
- When people think about “business incubators/accelerators/research parks”, they typically think about “brand-new companies”, or “start-ups”. But, we all know, that’s typically not the case – for many different reasons. An incubation facility may certainly contain brand-new “start-up” companies, companies just being formed out of Intellectual Property, concepts and ideas from various sources. But incubators may also contain companies that have ‘been around’ for a while – whether those companies need the programs and assistance being offered by the incubator to finally grow and mature to meet their potential; or whether the incubator takes on “anchor clients”, companies that may be more mature but provide goods and/or services for other companies and can also pay the type of rent that supports and sustains the incubator. Also, incubators may take on companies as “projects” – they may be companies that have been around for a while but just need help to grow and be a good economic benefit to the community.
- Incubators “classify” or identify with the types of clients they serve, and those clients form a “market”. Those markets are identified by market research – and that market research is often done by performing a “feasibility study”, a comprehensive evaluation of the local “entrepreneurial climate” in a community/area/region. A full feasibility study is often performed as a requirement for funding, to determine if there is enough “deal flow” to support an incubator facility, to evaluate sites for an incubator, and to determine the ‘type’ of an incubator needed in a community/area/region, among other things. A good feasibility study can help determine the presence of client “types” in an area to assist in building the best support structure into an incubator. Often, universities will classify their incubators according to Intellectual Property production from the university; for example, a University with a strong engineering school will want a predominantly engineering/technical incubator, while a University with a large medical school may prefer a biotech/life sciences incubator. Most places prefer a “mixed-use” model, as we will visit on the next slide.
- Typically, as mentioned, most facilities are “mixed use” models – handling a variety of client types. When you manage a multi – client facility, or a large facility dedicated to a “varied use” environment, there are many rules and regulations to consider – and many physical systems to consider, as well! Among them are all of these – safety and health of the occupants and staff; security and access control to various areas of the building; maintenance systems to provide comfort and control of the environment; testing and inspections which can affect any or all systems – also -
- Traditionally, people look to large sources of Intellectual Property as generators of start-up companies; Universities (typically large public and large private Research Universities) generate significant patent portfolios, and certainly with larger numbers of patents comes the higher probably that some of those patents will lead towards generating start-up companies rather than licenses. AUTM data indicates around 12% of University technologies are “spun out” into companies. A study (Di Gregorio, Shane) done in 2003 showed significant variability among major Universities – for example, Stanford & MIT typically generate Start-ups, while Columbia and Duke had zero. Also, the evaluators found that policy and the presence of Venture capital in the area were the 2 dominant factors on whether or not start-ups were generated; the presence or absence of an incubator had no effect, and the presence of a University-based VC fund had no effect. A study in 2005 (Wright) in the U.K. backed this data, showing very few start-ups actually generated by U.K. universities. Certainly, some Universities are the “exception to the rule”, but those (again, according to the latest published AUTM data and a recent presentation from Stanford University itself) are few and far between. Stanford, in a presentation at Washington University in 2008, showed an excellent case of why one should not depend on equity as an income source – Stanford has collected $364M in equity to date (as of 2008); $336M of that was one company – a “home run” in Google”.
- Licensing to small companies is a different matter. Universities, by the very nature of the Bayh-Dole act, are “pre-disposed” to license to small companies – and many do just that. AUTM reported, in 2009, 5,328 total licenses & options executed – they do not break out this data by “large and small companies”. They also reported 596 start-up companies formed, 435 of which stayed in their licensing institution’s home state – a significant statistic. They report 3,423 start-ups “still in business” from previous licenses. They also report 8,364 new U.S. patent applications, and 3,417 issued U.S. patents – but this is a dubious statistic, as less than 3% of U.S. patents ever earn a nickel – an important fact to keep in mind. However, some small companies do form around licensed University technology, even when they are “not formed directly by the University” – this is the essential “take-away” here.
- Some classic examples of Industry spin-offs are listed here – Lilly spun off their Cardiovascular division, Guidant, in 1994 from their Medical Devices & Diagnostics Division – it was later sold to Boston Scientific. Hewlett-Packard spun out Agilent Technologies in 1999 from their former test-and-measurement division. While this “occasionally” happens, some companies are more adept at this than others – it becomes “part of the culture”. For example, Novartis spun out a record 9 companies in 2007. However, traditionally, most large companies do not “spin-out” divisions or groups anymore unless it becomes a tax advantage for them – and they certainly do not spin-out small projects or non-core businesses. They occasionally will “sell-off” non-competitive intellectual property to non-competitive firms, or will set up a “skunk works” to test the validity of some projects for addition to core product lines. Looking to adjacent industry partners for a steady supply of clients is typically a “pipe dream”, as spinning out companies is just not a cultural phenomenon in most mid-to-large size U.S. corporations.
- You can take advantage of a Corporate Spin-out, when it does occur, as an “anchor client” – someone who takes up residence on a larger scale for a longer time to help you “pay the freight”, essentially, of building and operating costs. Some examples are listed here – at the Purdue Center in Indianapolis, Advion is an Eli Lilly spin-out that is considered to be an “Anchor Client” of the Ameriplex in Indianapolis, paying market rate rent and being allowed to stay on the property for an extended period of time to help defray operating costs and construction costs. AAM is a larger corporation that has placed a subsidiary in Ft. Wayne, Indiana, on the premises of the Northeast Indiana Innovation Center as a “secondary site”, but this also helps NIIC pay for costs and expenses by having AAM on the premises.
- A survey of over 130 incubators in the U.S., Europe and Asia revealed, in the majority of cases where the incubator was a “mixed-use” facility (primarily NOT a “life sciences or biotech” facility), over 50% of the clients of those facilities came from the “community at large”. Local entrepreneurs, whether repeat or first-time business owners, comprised the majority of clients in these facilities. The majority of these companies had been in existence for 1-4 years, operating out of homes, garages, warehouses, and some industrial office space. The typical company was 1-2 people, and was “bootstrapped” with personal and/or “Friends, Fools and Families” funds.
- Often, displaced professionals have grown weary of the “job search mode”, and will decide to “take their future into their own hands” and start a company – this has been more and more prevalent over the last 2 years in the current economic climate. Longer periods of unemployment have spurred individuals to take control of their own destinies and pursue an entrepreneurial future. Major Medical Centers/Local Hospitals are often sources of great ideas/new Intellectual Property- physicians often “invent” new procedures/products out of necessity or convenience, and opportunities to start companies around those products/services often exist. Sometimes, at Universities/Colleges of any size, Faculty may have outside “applied” research interests that lead to productive concepts that may be amenable to start-up formation – for instance, at a University where I worked, a Physics Professor invented a robotic cleaner for the inside of cement trucks – it had nothing to do with physics, basically, but it was certainly a great invention and turned out to be a big seller on the market, as the job of cleaning the trucks was originally tedious and dangerous, done by a person who had to crawl inside the cement truck with a shovel and a water hose – he solved the problem, created a small company and did very well. It CAN work – just be on the lookout for opportunity!
- It’s also good to ask current clients if they know of anyone – whether they use particular suppliers who might be potential clients, or if they have any contacts who are “interested”. An affiliate program is always a good practice to maintain, to potentially ‘groom” future resident clients. Tapping co-workers for contacts, discussing potential of new contacts with anchor clients, and evaluating the potential of “fast-track” clients who may be able to come in and rapidly grow to full potential in a brief period of time – these are all avenues to explore. It pays to speak up anywhere and everywhere to evaluate everything for possibilities!
- So what kind of businesses are out there? Where are they? I’ve seen MANY different types in incubators – food service/restaurant, photography, dental services, construction, life sciences/biotech, computing (including web services, hardware repair, software of all types, networking, etc.), call centers, security, retail, medical records, health-related, bakeries, consulting, agribusiness, auto repair, plumbing/electrical, architecture, legal, accounting, music, art, educational, government services, winery, textile, auction - what about yours?
- Any type of business can be profitable – a classic example is Eliza J – a business started by Eliza J. Kendall, Women’s Business of Boston 2003 “start-up of the Year” winner. A successful caterer and event planner, she was looking for a place to “park some money” when she came across a ‘Port-a-Potty” business for sale – she told her husband “it’s about time a woman built these FOR women” – she’s now an extremely successful franchisor, and her husband works for her! As for her business – the Portable Sanitation Association International reports the Portable Sanitation Industry has developed into a $1.5BILLION dollar a year industry – there’s a lot of money in – Yep, port-a-potties!
- So – don’t get “too picky and too calloused” – take the time to listen to people and ideas – you don’t know where your next multi-million dollar winner will come from…None of these guys has an MBA (Bill Gates, Steve Jobs, Michael Dell) – in fact, only one of them – Jobs – even has a Bachelor’s – but, they seem to have done well with a few ideas they came up with – being educated does not correlate with being smart!
- What companies/type of companies/sources of companies are the right “fit” for your facility? It’s okay to explore anything and everything, but be wary of taking “anything and everything” - make sure the companies you admit (we’ll discuss the admissions and screening process soon!) are a good fit for your “type” and mission, and that they have the potential to grow and contribute to economic development in your community. Don’t fall into the trap of “any port in a storm” and bring in companies you don’t want to keep – it’s never easy to get them out once they’re in!
- So – now that you’ve settled on your “Type of Facility”, and you’re out beating the bushes, looking for clients to and fro, tapping every source, networking and contacting everyone everywhere, and you understand what/who you want – how do you get them in the door? What ‘attracts’ clients to you? How can you get THEM to contact YOU? You can’t find all of them – there’s too much ground to cover and too little time to cover it.
- That’s where your VALUE PROPOSITION comes in – what you offer to your clients – and how you communicate it. This is your “attraction connection” – this is what brings companies to YOU – people seeing, hearing, and comprehending the VALUE you bring to their company. This is “your answer to the $64,000 question”. This is the strength of your programs, educational efforts, counseling, mentoring, guidance, facilities, business network, and assistance package” all rolled into one – it’s the “bait on the hook” – that will make people say “I have to be in that incubator program – TODAY!”
- What do you “truly offer” to prospective clients that is “all or some” of the above? Do prospects even know what they need THEMSELVES? Would they know it if they saw it – and, do they see it? What are you offering to prospective clients in your service area – is it the “right mix” of programs and services? Do you effectively, consistently and frequently communicate what you have to the right audience? How do you know?
- No, not an “Extra-Value Meal” – but a VALUE PROPOSITION. The basic definition is “A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings”. What does that truly mean? Well, it means – Karl, take it from here…
- Transition – today – talk about critical issues first – checklist of primary issues you will be faced with in managing a multi-client facility – first, we will talk about the most common issues most managers face and how those issues affect you and your clients, and what “best practices” to use in dealing with these issues/problems/items…We’ll be using a LOT of powerpoint slides, I will apologize in advance, but there are not a lot of good “acceptable” videos out there on Facilities Management, and to get all this information across to you as rapidly and cleanly as possible, it was necessary to put it on many, many slides. I’ll do my best to keep you awake today – we’ll take breaks, don’t worry! And I hope you chip in with questions and comments whenever you like. This is “critical information”, and I try to get as much of it to you in a day as possible, and to “stay in touch” in the future as a resource after today!
- Marketing is actually NOT selling – it is “building a brand in the mind of the prospect” – you have to make your prospect understand what you are all about, and make them understand how you can be a benefit to them – before they will ‘buy in’ to you and your product. What is your “brand”? It is an extension of your value proposition, of your mission, and a reflection of your goals and your sponsor(s). People “identify” you with what you offer, what you have, what you do, and who you are associated with – for better or for worse!
- Preconceptions/misconceptions affect your ability to reach your client base. These are some “typical responses” of individuals who may not be “getting the message” – or the complete message – of your value proposition. Perhaps they see you as a “University-affiliated facility” – and since they are not a “faculty/student” start-up, they may feel they do not belong there; or they may not comprehend the mission of your facility, and thus may feel their particular “type” of company is “not a fit”; or, they may see incubators as “serving start-ups only”, and therefore not suitable for companies like theirs (as they may have been around for a while, although not exactly a larger corporation!). Or, perhaps they have a general misunderstanding of what you offer and they may feel they are “past that” – or too good for it – they don’t “need help” – (in my opinion, EVERY company can use help!). Or they may have a deeper misunderstanding - what IS business incubation? Thus the “chicken”…
- The American Marketing Association defines a brand as a "name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller. If used for the firm as a whole, the preferred term is trade name.
- Do you remember this picture? Chief Iron Eyes Cody, walking alongside a highway littered with trash, with a tear in his eye? The ultimate statement for environmentalism. A concept brand is a brand that is associated with an abstract concept, like breast cancer awareness or environmentalism, rather than a specific product, service, or business – this is what you are striving for with BUSINESS INCUBATION. You want people to understand business incubation (you don’t want them to cry about it – well, maybe they SHOULD be crying over lost economic opportunities, if they don’t support you!) – you want people to understand that YOU stand for economic opportunity; business advancement; business assistance; business guidance, mentoring, and support; business education; access to business networks, business cooperation, and entrepreneurial advancement.
- In every municipality/area, there is “cheap real estate” – and it IS your competition, like it or not. Typically, it’s because, once again, people do NOT understand your mission/purpose/strategy. You’ll get statements like these – and, perhaps, some of the people asking these questions are NOT a fit for your program! However, others may simply not understand who/what you are all about – thus your “elevator pitch” and a concerted marketing campaign comes in handy!
- It’s important to have “all the pieces” of a concerted marketing campaign – not just a “good website” (what MAKES a good website, anyway? More on that, later), and not just “nice advertising pieces and brochures”. You have to address the entrepreneur, the sponsor, the total audience. A couple of good examples of “addressing the total audience” are here with Karl and John today, and I’ll let each of them address how they reach their respective audiences. First, Karl and his website at the Northeast Indiana Innovation Center, with all the pieces –Second, John, with the Purdue Statewide Incubator Network –
- Many forms of advertising are EXPENSIVE – and may not reach the “right audience”. What really works for incubators? It depends on the market – the size and area and type – and the need for market penetration. Typically, “word of mouth” is high-quality, but low penetration. The best marketing is “personal” – public appearances/speeches, telling people your story directly so they will completely understand. Secondarily to that is “visual” marketing – where people can read/see pictures and be compelled to “visit” or try out your facility – to find out for themselves. Special events, such as open houses, educational seminars, dedication ceremonies, and other “on-site” activities are valuable in this respect.
- There are certainly many qualified national, regional, and local agencies who can put together a “concerted” campaign for you – or, some incubators use the “University Public Relations and Marketing” departments they are associated with – or some attempt to “do it on their own”, and “wing it”. It’s important to insure you are “singing off the same songsheet” at all times, telling the same message and emphsizing your “strong points” at all opportunities to the right audience. Advertising doesn’t have to be expensive, just effective!
- Do you have a separate budget for marketing? It should be at least 10% of your “total budget”, and include publications, web presence, events – such as seminars, presentations, educational events, etc. – and be used to “spread awareness” of your message and purpose. Be sure your message is CONSISTENT – you have your “elevator speech” nailed down and it is always the same, always emphasizing the points you want to make to your “potential clients”.
- Okay, now that you actually HAVE some potential clients – how do you decide whether or not to “let them in”? How do you “Judge” whether or not they are a “good fit” – or whether or not they have “real potential”? How can you tell if they’ll “make it” or not, or if they’ll “play by the rules”? Well, if I could really do that, I wouldn’t be here – I’d be on Wall Street – but nonetheless, there are some ways and some tools you can use to help you make better judgment calls -
- First, you need a PROCESS? How do you determine “suitability” for your program/facility? We’ve previously discussed “classifying” your program/facility based on “types” of companies (particular industries, mixed-use, etc.), “stages” of companies (start-up, small companies that need assistance, spin-outs, etc.), affiliations (with the University, or not, etc.), or based on your ability to serve particular companies. But do you have requirements for “admission” clearly spelled out so everyone can see them, and are they “easy to understand”?
- Keep the application simple. Why? If they had a “full business plan”, they wouldn’t need you in the first place! Get more of a “concept statement” or business concept draft – what is their business all about? Can they state their “Total Available Market”? Can they tell you who they will sell to, and why those people will buy it? Are they aware of their competition?
- It helps tremendously to have a defined ASSESSMENT TOOL – like this one (use example two, the IUETC Advisory Board Admissions Criteria Table). Right off the bat, note there’s no “3” on the grading scale – so there are no “maybe’s” at the end of the day when determining if a client is appropriate for the program/facility. This is a “definitive decision tool”, used to force decisions. Companies are “graded” in several key areas, and a decision is “forced” – yet there is room for suggesting improvements on both ends, whether a client is admitted – or not. Let’s look at the tool and take an imaginary company “through the process” of judging whether or not they are a “good fit” for our imaginary facility” – EXERCISE 2 – next slide – use this tool -
- A typical “company” from the OUTSIDE – a new startup; less than $250k in funding; new managers; new technology; not “the same as the rest”; perhaps it’s IT, you’re more biomedical, or vice-versa; but – you need the RENT MONEY; you need the PRESTIGE; you need the COMPANY – but – how do you objectively determine whether or not to admit them?
- Typically, for client retention, each client is required to submit quarterly financial summaries (a typical P&L statement) to management of the facility/program. This report lets management know the “financial health” of the company, and the general “direction” of the company’s finances. In addition, most leases/relationship documents require regular meetings with the officers of the company, and if you maintain a healthy relationship with your clients, you “drop in” on them from time to time and “chat”. In many circumstances, “formal reviews” for progress are required on an annual or semi-annual basis (the “dog and pony show again”) in front of the Advisory Board/Committee to determine progress. Also, agreed-upon milestones are typically set, which may include financial milestones, the number of hires, and/or the amount of funding/capital acquired by the company.
- It’s all the above. Clients stay in your facility because they are “comfortable” with it; because they need the help; because they like the facilities and can’t find what you are offering anywhere else; because they’ve developed “relationships” with mentors/advisors you’ve provided; because of your “business network”; because of access to funding; because they are “saving money” as opposed to being elsewhere; because of - ??? (Ask audience) what else??
- EXTRA SLIDES -