Business Incubators Grow Up

A new generation of business incubators is appealing to serial entrepreneurs, veteran business owners, and tech whizzes

Bill Shander knows perfectly well how to start a business. Shander opened Chelmsford (Mass.)-based Beehive Media 15 years ago, and the six-employee, $3 million Web design group now boasts clients such as PricewaterhouseCoopers and the University of Chicago. But last year, when he started exploring the idea of a venture that would allow people to merge their online and offline identities, yet control the information available about them, Shander suddenly had the sense he was entering foreign territory. He had plenty of experience launching a services company, but "I never did a startup where we launched our own product," he says."It's a whole different beast." And one that he could use some help taming.

An inexperienced entrepreneur might logically have turned to a business incubator for help. Surprisingly, that was the best route for Shander, too. Most incubators require a major time commitment or even a residency—a dealbreaker for someone who already has one business to run. But the Founder Institute was different. The institute, which calls itself an equity exchange program, provides online access to mentors and workshops for those who can't come to its San Francisco offices. Shander enrolled as soon as the institute opened in June and is planning a soft launch of his company, Buzub, by yearend. "This experience has made me a better businessperson all around," says Shander. "And that is something I didn't expect."

Incubators, like the companies they support, are adjusting their business models to better accommodate a tech-savvy, time-pressed clientele. Some are offering new models of service delivery, others are targeting socially responsible businesses, and some are doing both. "I see a lot of experimentation going on these days," says Dinah Adkins, president emeritus of the National Business Incubation Assn. in Athens, Ohio. Many are taking advantage of the expertise of an entire generation of successful entrepreneurs who have cashed out and are eager to pass on their experience.

Still, these incubators aren't for everyone. For one thing, participation isn't guaranteed. You have to apply and be accepted, which generally means demonstrating that you have a unique product or service with the potential to fuel a high-growth company. Also, many are open only to Web-based or software startups. Or they may require that you devote yourself full-time to their program. But, like Shander, you may be able to find one that suits your needs perfectly.

By Anne Field