Forget Incubators: Here Comes The Cauldron

Next Story

Opera’s First Mobile Ads Report: Rich Media Rules, iPhone Rocks

During our recent road trip through the American Southeast, a few things popped out at me. First and foremost, real innovation and entrepreneurial energy is coming out of the places you’d least expect. The secondary lesson is a bit more interesting and could change the way we traditionally look at startup incubators and accelerators. It’s an idea posited by Manoj Govindan, a partnership executive at Bank of America in Charlotte, North Carolina and I’m calling it the “cauldron”.

Everyone is building accelerators and incubators. But the results, while interesting, rarely live up to their promise. There’s only so much value and synergy to be gained by putting 15 disparate startups into the same derelict office and offering them $45,000 or so to stick around. Remember: before startups appropriated the word, most incubator denizens were hatched, stripped of their feathers, fried, and eaten.

What Manoj was proposing was a sort of anchor model. A major corporation – say a media entity or manufacturer – would take over the majority stake of the cauldron, creating an off-site skunkworks. ESPN could move their web staff into a certain area or Ford could set up a design center in a loft workspace. On other floors companies with an ancillary relation to the main anchor would set up shop. They could be early or mid-stage companies, but they all have to be related to the main company. No more foodspotting start-ups next to robotics makers. Instead, everyone is working on a similar goal.

The traditional mentor model works here as well, with mentors from inside the anchor company helping out the little guys and outside mentors mixing things up a bit. You’ll also need a “cauldron-stirrer” who will keep the interactions going. Back and forth will be key, with the anchor employees bouncing ideas off of the little guys and vice versa. If the products are interesting enough, the start-ups will find instant clients in the anchor company and the anchor company gains the insights of the entrepreneurs.

The benefits here are three-fold. First, there is a goal – to get the anchor’s attention. Second, there’s a benefit to both the start-up and the anchor employee. Startups get to interact with the corporate world while anchor employees get to enter an interesting new relationship to their product. Bored cubicle drones would jump at the opportunity to staff the skunkworks. Maybe cauldron access would be a perk or a bonus for energetic employees? Finally, the traditional model of choose, launch, and dump is further streamlined. Because each startup is carefully curated and on topic, and because working with the anchor partner will be an interesting experience, I could definitely see start-ups being more interested in moving to odd places in order to work in the shadow of the skunkworks. This reduces geographical bias.

After seeing rooms full of people who never talk to each other and don’t know what the other companies in the incubator are doing, I really see the cauldron concept as a bit more interesting. Media access is a bit easier because of the big name involved and raising capital essentially leads to tapping the R&D budget of the anchor.

Maybe no major players will jump at the chance to work with small-fry businesses. That, in short, is their loss. Companies must take advantage of the amazing talent afforded them by the energetic startups popping up around them or perish. Start-ups also need to start thinking bigger and this is the perfect opportunity for growth.