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Wednesday, September 23, 2009
Born in the Recession
Recession leading unemployed engineers to incubators
By Jackie Noblett
Breaking down the MIT $100K
MHT's Efrain Viscarolasaga: Tech companies may have to wait for stimulus funds
The Great Recession may have put a damper on startups' ability to raise capital and grow, but the lousy economy hasn't seemed to stem the flow of technology companies getting started.
Officials at several incubators say the downturn has boosted interest in their small, shared space offerings: Recent graduates and laid-off engineers are looking to break out on their own rather than search for work. The combination of inexpensive lab space, connections with companies or universities and the opportunity to take on student interns makes starting a company on a shoestring slightly less daunting when you have a project ready to go.
“The entrepreneurs we see here are trying to solve a particular pain point, either in their own experiences or in the market, and that doesn’t track the New York Stock Exchange,” said David Bradbury, president of the Vermont Center for Emerging Technologies in Burlington. “Up here, entrepreneurs have always needed to be more entrepreneurial and independent.”
Bradbury has seen a shift in the types of companies coming into the center to more mature concepts.
The Advanced Technology and Manufacturing Center at the University of Massachusetts Dartmouth has seen an uptick in demand for space among biomedical and clean technology companies, according to director John Miller. The ATMC recently opened a cleantech lab to provide equipment needed to test energy-generation prototypes.
In addition to access to expensive technology equipment, startups are enjoying the benefit of a cheap and plentiful work force: students. Most academic incubators request that companies take on student interns.
“Not only are interns inexpensive to pay, but they don’t carry the medical insurance or other benefit needs that regular employees have. It really is a huge attraction to small companies,” Miller said.
Yet both Bradbury and Miller warn that starting up in a down economy is not easy where angel investment is off.
"Be prepared for a roller coaster,” Bradbury said. “Entrepreneurship is not for everyone."
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