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(Varick Incubator Brochure)
NEW YORK—When Anand Sanwal wanted to move his start-up company out of the his 20-by-6-foot office in downtown Manhattan, he looked to buy an apartment in New Jersey that could function as an office. It was in 2008, the beginning of the economic crisis. Not the best time to launch a start-up business and Sanwal was looking to save money.
Luckily, in 2009, Sanwal landed a spot as one of the 36 businesses at the 160 Varick Street Incubator, part of a network of 16 affordable workspaces for emerging entrepreneurs and artists in New York City.
Since then Sanwal and his company, CB Insights, continued to grow despite the hard times and are now right in the middle of Manhattan. Currently, CB Insights provides information service on high value private companies to over 2,000 subscribers.
The affordable workspaces are sponsored by the Economic Development Corporations(EDC), in partnership with academic institutions, commercial landlords, and space operators. Other workspaces include exhibition space for artists, industrial kitchen and workspace for fashion designers.
“It has been awesome,” said Sanwal about being part of the incubator. “We got customers just by being here.”
A City-Wide Effort
The 160 Varick Street Incubator is home to 36 companies in different fields from social media to green technology. The incubator is operated in cooperation with NYU polytechnic institute and Trinity Real Estate. By now, companies in the incubator have raised more than $20 million and created about 300 new jobs.
Companies in the incubator pay $300 per seat per month. Services like high speed internet connection, print services and conference rooms are included. So is the view, which overlooks Soho and Midtown.
“We look for companies that are in line with the strength of the city. Our focus for our tenants is not simply to find a venture capitalist that would invest in them, but to find customers,” explained Bruce Niswander, the director of 160 Varick Street Incubator.
NYU-poly formed an incubator in Brooklyn in 2004. After the economy crashed in 2008, the city approached NYU-Poly to set up the Varick Street incubator.
The Network of incubators is part of the mayor's Five Borough Economic Opportunity Plan, published in 2009 and meant to bring New York City through the current economic downturn as fast as possible.
In addition to the affordable workspaces the EDC sponsors, it also has additional programs to promote initiative and entrepreneurship in the city like programs to increase access to capital and international outreach.
One of the major benefits of the incubators is that they are not just on Varick Street, but across the city, said Niswander.
“There is an incredible number of entrepreneurial people in the city, who, prior to this, used to work from coffee shops. New York is a hot bed of small businesses,” said Niswander.
The investment in innovation paid off. In the last quarter of 2010, New York passed Boston in venture capital investments for the first time, said Sanwal. The city is now second only to Silicon Valley.
Free Flow
For the companies in the incubator, the open space shared by other like-minded entrepreneurs is a great benefit. The free flow of people who come to visit the incubator, may present an unanticipated business opportunity. Something that most likely would not have happened if the companies had their own offices.
“Everything would have been much slower [ if we were not in the incubator],” said Joe O'Connor, Vice president of Sollega, which manufacturer racks for solar panels. Since moving into the incubator, everything accelerated for the company, he said.
For The Hotlist, a social media company, moving into the incubator was a life changer. There they met their investor, Joseph Grano. Grano is the father of another incubator tenant who set the meeting up, after hearing about their product.
The flow of people in the open space in very helpful, said Chris Mirable, CEO of the Hotlist. The company is now looking for an office outside of the incubator to further expand the company.
