In that brief amount of time, he has to be intrigued enough to want to know more. If he does, your elevator speech was successful. If he doesn’t you have one of two problems. He doesn’t like the concept, or, you need to work on your elevator speech.

Obviously, the speeches need not be limited to elevator rides, but the idea gets the point across. There are many venture clubs, chamber of commerce luncheons, civic organization meetings, etc., where you can deliver your elevator speech. Most of these organizations give people an opportunity to stand up and quickly introduce themselves (or their product).

There are innumerable opportunities to pull someone aside and give them your elevator speech, but how should your speech be composed? You might think of this as an executive summary of an executive summary. If your business plan’s (you do have one, right?) executive summary has all the important parts, then so should your elevator speech. Unfortunately, an executive summary is typically a whole page of information. You can’t deliver that in 30 seconds. So, try to put yourself in the shoes of a venture capitalist, who is constantly approached by “the next great idea.” They have a limited amount of funds, and they hear these speeches all the time. Here’s what I recommend you include in your elevator speech:

• The nature of your product or service and how you differentiate it from competition.
• Why people will want to buy your product or service.
• How fast you can get the product or service to market.
• How much money can be made from the sale of the product or service. This MUST be realistic. Telling them “This will make you rich beyond your wildest dreams” will not work.
• PASSION. If you don’t have the passion oozing from your pores, don’t expect them to get excited.

Finally, for your speech to be effective, you should really be able to deliver it at the drop of a hat. It should be polished and ready for delivery at a moment’s notice. For most people, that means it should be practiced–in front of a mirror–over, and over again.

Business Incubators and Accelerators

The concept of business incubation began in 1959 with the first business incubator in Batvia, New York.  Incubators as we know them today began to become popular in the 1970’s and they flourished in the late 1990’s during the initial dot-com boom.  By and large, the general purpose for incubators has remained the same throughout their history, i.e., to promote economic development through entrepreneurial activities for small, emerging companies.

Throughout their history, incubators have supported nurturing companies from various industries.  Many accept a mix of industries; yet others concentrate heavily on industry niches.  These niches vary widely, with the most prevalent being “high-tech.”  Others include manufacturing, food-service, life sciences, business services, environmental technology, the arts, etc.

In 1985, the National Business Incubator Association (NBIA)5, a  non-profit organization, was formed and has since thrived.  Much of the research material for this study was obtained from NBIA resources.  The organization currently boasts over 1,700 members, mostly represented by incubation program managers and developers.

In 1980, there were only 10 to 12 business incubators in  the United States.  Today, it is estimated that over 1,100 are in operation, a fact that offers substantial credence to the concept of business incubation programs.

In the late 1990’s, economic development professionals began to place more emphasis on entrepreneurial activities.  Today, as one of the “three legs” of economic development (attraction, retention, and enterprise development), economic development professionals are increasingly relying on enterprise development as the more effective method of promoting economic growth.  Business attraction is an extremely competitive, difficult, and often disappointing method of development.  It can sometimes take  years to entice even a single company to set up shop in a community.  Business retention is important, but typically does not contribute to growth–it simply maintains it or prevents negative growth.  But through entrepreneurial activities under the enterprise development concept, the results can be both profound and effective.

Although the incubation industry suffered some setbacks as a result of the dot-com bust in 2000, it proved remarkably resilient, by not only surviving, but it continued to grow and thrive.  The NBIA estimates the incubators in North America serve over 35,000 companies and have launched some 19,500 graduate companies.

Defining Business Incubation
There are a number of definitions for business incubators, although the concept has been around long enough that there is typically little difference among these definitions.  For purposes of this study, we have adopted the definition provided by the NBIA as follows:

Business incubators nurture the development of entrepreneurial companies, helping them survive and grow during the start-up period, when they are most vulnerable. These programs provide their client companies with business support services and resources tailored to young firms. The most common goals of incubation programs are creating jobs in a community, enhancing a community’s entrepreneurial climate, retaining businesses in a community, building or accelerating growth in a local industry, and diversifying local economies.6

The NBIA suggests that the terms “incubator” and “accelerator” can be used interchangeably and that the term “accelerator” is simply a new, more fashionable way of referring to incubators.  There are however some accelerators that take issue with the idea that they are the same.  For example, the Western Kentucky University (WKU)  Business Accelerator in Bowling Green Kentucky makes a clear distinction between incubators and accelerators.  The following distinction between the two was provided by Buddy Steen, Executive Director of the WKU Business Accelerator.

Business Accelerators Versus Business Incubators

With few exceptions, an accelerator restricts its tenant companies to those that are attempting to enter, grow and sustain a national or international market. In order to recruit, grow and retain these types of companies, the resources provided by the accelerator and surrounding network become critical. Resources include but are not limited to high-tech workforce, management mentoring, business development mentoring, i.e. business plan development, 5 year financial pro-forma, etc., fund raising mentoring, introduction to investment prospects, prototype development (mechanical, electrical, software), access to requisite information technology infrastructure, and information technology technical support.

In contrast, an incubator may or may not have tenant restrictions…in many cases they exhibit a “welfare with walls” mentality. Also, the resources provided are often in the form of educational workshops or support from an academic perspective.  They also typically exhibit overly government-like policy based management, which results in bureaucratic layers that are counterproductive to innovation and  entrepreneurship.

Some accelerator managers differentiate between themselves and incubators by having no defined exit strategy for their clients.  In fact, they encourage clients to stay in the facilities rather than leave at any defined time in their development.

With the distinction between incubators and accelerators defined above, we can safely assume that an accelerator is simply a refined form of incubator; however, whenever you encounter the term incubator from this point forward in this document, you can assume it is referring to the concept of incubation with accelerator properties.  Consider the terms to be used interchangeably unless otherwise noted.

Accelerator Services

The NBIA has collected a long list of services that can be provided to client-tenants.  Note that some of them can be applied to clients that are not tenants as is used with virtual incubation programs.  Each of the following (except where otherwise noted) were identified by the NBIA.7

Business Basics. This includes assistance with creating business plans, understanding federal, state, and local regulations, financial management and accounting, applying for bank loans and or grants, and assistance with human resources functions.  Some incubators require that potential clients take a class (usually offered by the incubator) as a pre-requisite for being considered for admission to the incubator.  Others offer these services through seminars, one-on-one meetings, or by pairing clients with mentors.

Professional Service Providers. In some cases, the services needed by an accelerator client or tenant exceed the abilities of the accelerator manager or the staff.  For example, if someone needs to prepare a patent application, they might be referred to a reputable patent attorney.  If a company needs to develop a prototype, they might be referred to a specific company that can assist them with that process.  Other common referrals to professional service providers include accounting and financial management, regulatory compliance, e-commerce, federal procurement, manufacturing assistance, technical advising, legal services and international trade assistance.

Networking. Much is made of the concept of networking–and for good reason.  An accelerator can help with networking opportunities, particularly with other accelerator clients.  A struggling start-up company can often endure frustrations and being among others that are experiencing or have experienced the same difficulties will typically give an entrepreneur the added boost that’s needed to move to the next level of success.  Accelerators encourage such interactions by hosting formal events, introducing clients to one another, and by taking advantage of the physical features of the building.  Sometimes the physical layout of the accelerator building can positively affect networking.  Simply having wider hallways where people can socialize, offices with glass fronts, or even a cafe style eating center can promote conversation and mutually beneficial activity.

Seminars and Training Programs. Seminars and training programs not only offer critical educational benefits, they can also be the source of revenue for an accelerator program while simultaneously promoting networking among clients or potential clients.  Sometimes the seminars and training sessions are conducted by accelerator staff.  Other times they are provided by outside organizations such as the Small Business Development Centers (SBDC), Small Business Administration (SBA), Service Core of Retired Executives (SCORE), economic development professionals, and even graduates of the accelerator itself.  These classes should also be considered as part of the overall marketing strategy for the accelerator.

Shared Administrative Services. Offering shared administrative services can frequently help a small start-up company with initial operations.  Sometimes these companies may have only two or three employees, so an accelerator can offer these services at low-cost, proving to be a valuable amenity they could not otherwise afford at a time they are most vulnerable. The variety of services is vast.  They can include (but should not be limited to)

• clerical help,
• reception services
• payroll services
• telephone services
• fax machines
• voice mail
• conference rooms
• daycare services
• Internet connectivity
• web site hosting and other data center services
• photocopiers
• data entry services
• mail room support
• package shipping

Accelerators can build some of these services into lease or license agreements or they can charge for them on a pay-as-you-go model.

Affiliate Programs. Accelerator programs can offer their services to start-up companies not located within the accelerator building through an affiliate program.  By offering these services to entrepreneurs outside an accelerator’s facility, they can increase their scope and effectiveness while generating revenues at the same time.  Some incubator programs actually receive as much as 20 percent of their revenues through affiliate programs.  These additional revenues can often mean the difference between self-sufficiency and failure.
Micro-loan and Financing Programs.  Not all companies need millions of dollars to get off the ground.  Some business that cannot qualify for bank loans can obtain small amounts of funding through microloans, typically provided by the SBA or the Economic Development Administration.  Others are available for specific reasons through state and local agencies.  The Kentucky Innovation and Commercialization Centers often assist start-ups with applying for loans and grants provided by the Commonwealth.

Computer Labs. Most start-up companies will come equipped with basic computer resources for office applications, development, etc; however, sometimes software applications being developed may require access to computer resources that are outside the abilities of the companies to obtain.

Resource Libraries. Some accelerators provide resource libraries that contain everything from how-to books to sample documents to technological research papers.  These libraries provide clients with immediate hands-on information and give accelerator staff the tools they need to properly assist clients.

Technology Commercialization Assistance. This can include innovation and technical assessments, prototype development, assistance with intellectual property issues, and accelerated business basics designed to turn scientists into full-fledged entrepreneurs.

Access to Investment Capital. One of the biggest challenges to start-ups is obtaining capital.  A good accelerator should establish a relationship with various capital sources.  This can include seed-stage or early-stage venture capital firms, angel investor individuals or groups, and state and federal programs that oversee capital infusion for business start-ups.  Key to this process is that the accelerator identify the main characteristics or criteria that each of them requires prior to any introductions.

Mentors and Advisors. Mentoring and advisory board programs match entrepreneurs with seasoned professionals whose experience and successes suit the needs of the emerging companies.  A good accelerator program should try to establish a board or panel of experts in various fields, particularly those that fit the focus or concentration of the accelerator program.  Additionally, outside services provided by organizations like SCORE can be extremely useful.

Security. Because most small start-ups do not have the financial resources to afford office space with high security features, it is important for any accelerator to consider both the physical and information security infrastructure and to provide as much security as feasible for their clients.
Facilities and Specialized Equipment.  An accelerator should offer office space that is professional, flexible, and specialized to the needs of their clients.  Although it is tempting at first to occupy the most dilapidated facility in town, it is typically unwise to do so.  Because attracting clients to the facility is crucial, it should be one in which the client is comfortable occupying.  Providing an attractive space is paramount to attracting clients.  Flexibility is also important.  This can often be accommodated by allowing clients to initially occupy small spaces and then allowing them to grow in their space to larger offices within the accelerator.  Many accelerators offer office space as small as 300 square feet, with the understanding that the space may be expanded when their company grows.

Marketing and Promoting Clients. The accelerator should take an active role in marketing and promoting it’s clients.  This is often as simple as submitting press releases or even phone calls to local media organizations.  Additionally, the clients should be showcased prominently on the accelerator’s web site.  Finally, attending or participating in trade shows provide good opportunities for marketing.
University Linkages.  Establishing a strategic relationship or direct linkage with a university can help build meaningful community relationships.  Additionally, if there is an applied research component with the accelerator, the relationship with the science and engineering departments of a university is critical. These can be used to spur technology transfer and commercialization.  Establishing a relationship with a community college can also be quite useful because the students are typically non-traditional and can be entrepreneurial hotspots.

Marketing Assistance. Accelerators often assist their clients with marketing efforts by helping them identify markets for their products or services, which can be crucial to an entrepreneur’s success.
Pre and Post Incubation.  In Kentucky, the ICC programs should be considered effective pre-incubation programs.  ICC programs should be considered as an integral part of the pre-incubation services for an accelerator.  Post incubation services such as relocation assistance, ongoing contact with accelerator staff, etc. are often a part of the strategic plans of accelerators.

Linkages to Strategic Partners. Partnering clients with established companies, organizations, and international groups allow companies to minimize risk and maximize profit.  This can be in simple form such as reducing costs by buying in bulk, designing complementary products, and commercializing one another’s technologies.

An informational site is a modern day version of a brochure–only you don’t have to print it, mail it, or hand it out.  Now, having said this, I will offer the following caveat:

“It’s better to have no web site at all if it looks unprofessional.”

When I shop online or look online for information, I use the 5 second rule.  If I get to a web site that looks like it was designed by your brother-in-law, I’m gone. On to the next site. I can spot it in 5 seconds.

Now, does this mean you have to hire a professional web designer to do your site?  If you can afford it, I would highly recommend it.  And, you can expect to pay handsomely for it.  Well designed web sites can often cost between $5,000 and $10,000.  On the other hand, if you’re on a tight budget, there are ways to do it for much less money and still have it appear like it was professionally developed.

Try to anticipate what your customer might want to know.  Make sure you can tell them how to get in touch with you, how to find you, etc.  And whatever you do, make sure you keep your site up to date.  If the first thing they see in July is your Christmas special, you can be assured your customer is going to wonder if you’re still in business.   Finally, make generous use of white space, and use professional looking photographs.  I highly recommend stock photography.  I’ve found an amazing web site where you can purchase stock photos at unbelievably low prices: www.iStockPhoto.com .

How can you do all this this on a shoestring?  Well, thanks to the widespread use of blogs, there are some wonderful tools available to you that allow you to not only put up a great looking web site, but you can keep them up to date without the help of anyone–all without knowing anything about HTML, web site development, or any of those other things that scare you.  And best of all, most of these tools are free or available at a very minimal cost.

Now, I’m not saying this is easy, but if you’re willing to learn a little about blogging software, you can do it yourself.  On the other hand, if you don’t have the time or inclination to delve into the world of blogging software, you can likely find someone to customize one of these sites for you in the $500 - $1,000 range.

Finally, you may be wondering what you have to pay to have it hosted somewhere.  One of the best values I’ve found is www.hostmonster.com.  I use them for quite a few of my web sites, and their support is VERY good.  And believe it or not, you can get everything you need for an informational web site, including email addresses, for $6.95 per month.  Add to that the cost of a domain name for about $10 to $40 per year, and you have everything you need.  If you’re interested in getting an account with them, you can sign up by clicking on the graphic below: