The document discusses business incubation as an economic development strategy and provides context on Craig Kettleson's experience in the field. It notes that new businesses account for most net job growth and incubation can be an important rural strategy. Key takeaways are that incubation facilities typically cost $3 million to build and $500,000 annually to operate. Incubation is a process of supporting entrepreneurs, not just providing space. For a facility to succeed it requires sound planning, market responsiveness, value for tenants, flexible space/services, mentorship, networking and strong management. The document concludes by listing options for Evansville to consider, such as a traditional incubator, virtual incubation, satellite facility, co-working space or makerspace.

1. Is Incubation a Winning Strategy?
Evansville Entrepreneurship Sub-committee
December 16, 2015
Craig Kettleson

2. Craig’s Economic Development and
Incubation Experience
• 27 Years in Economic Development
• Specific Incubation Experience
– Wisconsin Department of Development – CBED Program
– Wisconsin Business Incubation Association
– NBIA Certified Incubation Manager
– Two Feasibility Studies: Superior and Phillips
– Portage Enterprise Center

3. Entrepreneurship and Economic
Development: Some Context
• Economic Development a 3 Legged Stool: Entrepreneurship, BRE,
Attraction
• Ewing Marion Kauffman Foundation Study
– New businesses account for nearly all net new job creation and almost
20% of gross job creation in the US economy
• Entrepreneurship is Becoming and Important Rural ED Strategy
• Business Incubation in State and Region
– State: 35 Total Incubation and Kitchen Facilities (WBIA)
– Region:
• 17 Total Incubation and Kitchen Facilities (50% of State Total)
• 32 I&E Spaces

4. Is Incubation a Winning Strategy?
Key Concepts (Takeaways)
• Capital Costs of Business Incubation
– $3.0M for 30,000 sf Facility ($100 psf)
– Portage Enterprise Center: $1.8M for 30,000 sf ($60 psf)
– Janesville Innovation Center: $3.0M for 22,000 sf ($136 psf)
• Operational Costs
– $500,000 Annually
• Incubation is a Process (or Program) vs. Space
– “Starting a company is like throwing yourself off a cliff and assembling an
airplane on the way down” Reid Hoffman, LinkedIN co-founder

5. Is Incubation a Winning Strategy?
Key Concepts (Takeaways)
• Incubators are Businesses
• Success is Based Upon Sound Business Planning and Execution
– Good Market Research; Facility Responsive to the Market
– Provide a Value Proposition to Tenants
• Flexible Space vs. Below Market Rent (Process vs. Space)
• Mentorship
• Networking
• Technical Assistance
– Take Risks Around Plans for Each Tenant
– Strong Management and Well Qualified Service Providers
– Financial Plan to Break Even (ideally within 2-3 years)

6. Options for Evansville
• Traditional Incubation
• Virtual Incubation (Independent or as an Affiliate)
• Satellite Facility (maybe of the JIC)
• Co-working Space
• Hacker or Makerspace
• Other Options??