WOEIP Business Incubator

November 11, 2013

Our Approach

EntrepreneursTwo-Sided Funnel

Incubators

• Leverage off work of Pablo, Casey, and Chris

• Use their work to assess needs of community

• West Oakland is actually made up of many sub-communities

• Focus on low-income, traditional population

• Felt our expertise could lie with incubators

• Have been around incubators and have access to them

• Apply more of a business approach to what was already done

• Bring new eyes to existing research

Who Did We Speak To?

OMSS

• Accelerator based in Nairobi, Kenya

• Focused on later stage businesses

• Primarily in agricultural technologies

• Open space in SoMa District of San Francisco

• Artists, tech, and community organizers collaborate to reimagine the urban experience

• Community-owned accelerator for food-based enterprises

• Starting with grocery store, but supporting other companies in space

• Parking space for trucks• Add-on services

including food, doctors, mini-markets, spare parts and repairs.

• Incubator in the Mission District of SF

• Targeting low-income food entrepreneurs

• Provides kitchen space and technical assistance

Stages of Business Formation$0 $1 million

Revenues

Early Stage Mid Stage Late Stage

• No steps taken to start business yet

• Dependent on incubator• Have idea or identified

need• Have people (but may

not have formed team yet)

• Targeting commuter/professional/maker buyers

• Business started• Early stage incubator grads• Familiar with but haven’t

mastered business and soft skills

• Relationships with suppliers

• Need:• own space• to formalize—legal,

accounting, etc. • financing

• Have own space• 50+ customers• Need vertical

integration• Need to scale• Have some

relationships with suppliers

• Business formalized

Key Themes

Empower local entrepreneurs to succeed in a formal economy

Identify, encourage, and teach would-be entrepreneurs

Listen to customer to identify needs

Local management and local solutions

Open space to find your purpose

Vertical integration and coordination needs to start at early stage

Framework for Vertical IntegrationNeed to focus on a specific industry to offer best value

WOSP brings in new customers and business opportunities

What are the wants of these customers?

Organize around skills of entrepreneurs

Organize around desires of entrepreneurs

Organize around resources available

Organize around constraints of WOSP

Results of FrameworkMost promising verticals for WOEIP to examine:

Food Historical / Cultural Tours

Car Repairs

Day Care

Recreational / Gym

Parking Lots

Clothing Bars / Live Music

Archetype for Early Stage Entrepreneur

• Traditional residents (low-income, African American, Hispanic)

• Potential entrepreneurs– No steps taken to start business yet– Unfamiliar with entrepreneurship and vocabulary

• Have idea or identified need• Have people (but may not have formed team yet)• Targeting commuter/professional/maker buyers

Early Stage Incubator

Incubator for Early Stage Companies

Needs Value Propositions

Encouragement

Mentoring

Work Space

Team Formation Making Tangible Sub-goals

Match market need and entrepreneur

People SkillsGeneral Business Skills

Develop existing skills to market need

Provide would-be entrepreneurs with

idea

Have view of entire value chain

Validate Business Ideas

Help locating working space

Partnerships and Activities

Activities• Marketing• Mentor matching• Team formation• Business relationships• Business model training• Community of entrepreneurs• Personal Asset Mapping• Product development• Startup residency• Tech assistance• Delivering financing

Partnerships• Buy-in of WOSP

beneficiaries– Politicians– Retail– Biotech

• Other stage incubators: ICA/Centro

• SMB financing institutions

How to Reach Early Stage CompaniesUse Pre-Existing

Space Build New Space

Get• Describe need -> help wanted +

offer training• Referrals• Offer free teaser training

Get• Crowd source for needs, people

have ideas to address them• Open space to explore, talk, find

purpose

Keep• Resources at space• Safe to fail here• Past success stories

Keep• Creating fail friendly culture• Encourage failures• Rotate to new teams

Grow• Transfer to ICA or rotate

Grow• Transfer to ICA or rotate• Mentors

Possible Revenue Streams

Rent from own space

Finder’s fee / split rent with pre-existing spaces

Profit share with tenants

Mid Stage Incubator

Archetype for Mid Stage Entrepreneur

Qualities• Started business• Early stage graduates• 15-20 customers• Familiar with but

haven’t mastered business and soft skills

• Have relationships with suppliers

Needs• Own space• To formalize—legal,

accounting, etc. • Financing

Incubator for Mid Stage CompaniesNeeds Value

Propositions

Formalization of Business

Business Partnerships

Encouragement

Network connectionsOverarching view of value chain Product Development

Community of Entrepreneurs

Legal formation Help locating work space

Adoption of Technology

Accounting practice Financing

Partnerships and Activities

Activities• Help evolve product/service• Maintain business network• Integrate business with WOSP

goals/stipulations• Building partnerships with:

– Banks– Real estate firms– Lawyers– Accountants

• Monitoring/collecting data on businesses• Marketing• Coordinating with other entrepreneurs• Formalizing process for a business going

formal

Partnerships• Banks• Other stage incubators

(ICA/Centro)• Lawyers• Vertical players—suppliers,

distributors, etc. • Real estate firms• Buy-in of WOSP beneficiaries

(politicians, retail, biotech)• Mentors

How to Reach Mid Stage Companies

Single, Integrated Space

Get• Early stage incubator grads• Early in life of incubator: outreach to midsize

businesses

Keep / Grow• vertical partnerships• ongoing monitoring and support

Possible Revenue Streams

Entrepreneurs pay incubator for consultation

Lawyers/accounting/banks/real estate brokers pay incubator finders’ fee or otherwise support incubator

Late Stage Incubator

Archetype for Late Stage Entrepreneur

Qualities• Mid stage graduate• Own space• 50+ customers• Formalized some

business processes

Needs• Scaling (multiple

spaces/services)• Vertical Integration• Financing

Incubator for Late Stage Companies

Needs Value Propositions

Resources for Business

Business Partnerships

Encouragement

Network connections with suppliers and

customers

Overarching view of value chain

Relationships with community and

politicians

Community of Entrepreneurs

Hiring employees & managers

Help locating 2nd or 3rd location Operational advice

Financing Marketing

Partnerships and Activities

Activities• LearnUp model job training• Operations

training/optimization• Shared traditional departments

(HR, finance, biz dev, marketing)

• Bank financing / working capital• Marketing for incubator and

clients• Community engagement /

hosting community events

Partnerships• Banks, real estate agents• LearnUp• Business consultants• Biz Dev: Big box retail

brands, other WOSP stakeholders

• Key community advocates

How to Reach Late Stage Companies

Single, Integrated Space

Get• Mid Stage incubator graduates

Keep• Mentorship• Hiring help/job board -> LearnUp model training

Grow• Promise of ICA/Centro

Possible Revenue Streams

Charge entrepreneurs for job placements

Finders fees for banks/real estate agents

Development grants

Charge community advocates for services provided at early stage and funnel to later stage

Consulting fees

Adopt-a-business or corporate marketing partner

Capitalize on segmented communities; market as social good to affluent WO professionals

ConclusionsEarly Stage Mid Stage Late Stage

Key Needs • Encouragement• Mentoring• Work Space

• Formalization• Partnerships• Encouragement

• Hiring• Financing• Operations• Partnerships

Key Service Offerings

• Team formation• Idea validation• Mentor matching• Work space

• Process for formalizing business

• Network of relationships

• Ongoing monitoring

• Job board / training

• Consulting• Connections to

banks/real estate agents

How to Reach • Open space• Referrals• Classes

• Early stage grads• Outreach to

community

• Mid stage grads

Revenue Stream • Rent• Profit Share

• Consulting fees• Finders fees for

partners

• Job placement• Consulting fees• Charge partners