Inside SC - USC Business Incubator Program

Wendy: Today we are talking about a Technology Incubator Program that was established out of the University of South Carolina. Now through a partnership with Greenville Tech and USC both colleges are teaming up to establish an Incubator Program here at Greenville Tech. Joining me now to talk about the program is Joel Stevenson of USC and Dr. Chuck Morton of Greenville Tech. Gentlemen welcome. We’re glad to have you with us. Joel we are going to start with you first. You are the Executive Director of the Incubator Program at USC. Let’s ask the very obvious question first. What is an Incubator Program?

Joel: I can tell you Wendy, what it is not.

Wendy: Okay

Joel: Because a lot of people who don’t understand incubators think it has to do with chickens being that I’m a game cock.

Wendy: chuckles

Joel: and want to know if it’s a new chicken program or a baby program. What it is specifically is a place for someone to start a business

Wendy: okay

Joel: And our job is to take you after you have written a business plan and you are accepted into the program, is to help you go from that point A to when you graduate Z and do it very, very quickly.

Wendy: Okay, now so let’s break it down a little so students who are at USC and Greenville Tech if you have a vital business idea, you can write a business plan, submit it for approval, and if it is accepted you gained entry into the program where you have sources that can help you develop and nurture that program and turn it into a business.

Joel: That is very well said

Wendy: okay, just want to make sure I have it right.

Joel: Yes ma’am, you have it right

Wendy: One of the purpose of the program also is to develop or grow economic development within the community is that correct for the program?

Joel: yes ma’am

Wendy: Okay, Tell us a little about the process if the student is interested in getting into it. What do they have to go through and how competitive is it?

Joel: Well, since the one at Greenville Technical College is just now starting, I will speak of the one at the University of South Carolina in Columbia. We are in partnership with our student government and the student government president forms a committee and it is going on right now as matter of fact. And they ask for ideas from the entire student body. They advertise. They are looking for the great idea. He forms a committee, the great ideas are given to them. They go over those ideas and decide, we think these are the ones that could go forward to the incubator program so they have to compete at that level.

Wendy: Sure

Joel: That is the first level. Then they come to us. We have an advisory committee that reads their plan and they have to go before that advisory committee and give their plan.

Wendy: Okay

Joel: And what we call an elevator speech

Wendy: okay

Joel: they have just five minutes to give their plan to the committee.

Wendy: A sales pitch

Joel: exactly

Wendy: okay

Joel: exactly, that is exactly what it is. And they are real, real, the committee is real, real strict about the five minutes because they want the students start getting used to going and making sale call, trying to raise money, you don’t have a lot of time so they just don’t let them ramble. They stick with the five minutes. They ask them questions and then they vote on whether or not they get in the program. If they get into the program, then they are given free office space for two years. Their given a free telephone. They are given all the internet they can stand and for free. They are a thousand dollars in start up money and then they are given access to all the service providers. Service providers being lawyers, accountants, bankers that support our program.

Wendy: Wonderful, Now there are other companies that support our program. Do they have mentors also?

Joel: They can if they want to.

Wendy: Okay

Joel: and that is part of our job is to hook them up with somebody who wants to work with them and we have several that do. It is not a prerequisite. They don’t have to.

Wendy: Sure

Joel: They don’t have to do that because you have two people that are involved with the program on a daily basis that have between the two about forty years experience in the business world. And we try to help them and mentor them as they go along.

Wendy: Now are you accepting new companies into the program every year or is it every other year?

Joel: In our student program, we’re doing it every two years

Wendy: gotcha

Joel: because it’s a two year program and we have ten slots for those students and so every two years we go through this selection process

Wendy: What has been the success rate of the companies? We have had twenty five companies, student companies that have gone through there. And we have had five companies that have gone on to the next level. And people ask me all the time: are you pleased with that? I am very pleased with that. If you go to a venture capitalist and ask them how many they think out of ten would make it, they may say one. And we have five. We have now in our new group that we have now which is another ten students companies, we probably, and this is just an opinion, we probably have four that will go on at the end of this year.

Wendy: Wow

Joel: at the end of this year. We’ve been very, very pleased.

Wendy: Now let me ask you how have the companies contributed to the local economies once they have graduated? Have they produced jobs? Have they stayed within the community?

Joel: Yes that is a very good question. Our incubator is supported by the community financially.

Wendy: Okay

Joel: so we have to make a report back to our financial backers every year

Wendy: Sure

Joel: and that is what they want to know is how many jobs and up to this point we have had up to twenty graduates from the program and both our student program and our regular program

Wendy: sure

Joel: And there have been about 555 jobs that have been created from that and of the twenty companies that have graduated, one has gone out of business and two have been sold. The rest are right there in Columbia.

Wendy: Sure

Joel: I always get the question: do you require if they get into the program, do you require them to sign some document that they stay in Columbia for a certain period of time. We have not had to do that.

Wendy: Right

Joel: I am also asked why haven’t you had to do that. The reason is because when a company sets up their network, sets up their bank, their lawyer, their accountant. Unless somebody buys them like two of our companies, one they took to California and one to North Carolina, they are going to stay in Columbia. Seventeen of them are in Columbia.

Wendy: Now - Now are the colleges vested into these businesses once they have graduated through the program or is there any ownership?

Joel: The research foundation owns a percentage of the company.

Wendy: okay

Joel: a very small percentage

Wendy: okay

Joel: The only time they get anything for that is if the company is sold.

Wendy: okay

Joel: Thus far we haven’t had any companies that have been sold and given back because the two companies that were bought were in the program before we started taking equity.

Wendy: gotcha

Joel: The rest of them now if they are sold, we will get something

Wendy: yea. One of the nice things, I might add too, about this program is that a lot of start up companies are not developed as quickly because they don’t have the resources available as in an incubator program. So this is a true benefit for a student companies. And I know you touched on different type of companies that is part of the incubator program which we will get into in a few minutes but this conversation we are going to focus on the student aspect of it. Dr. Morton, nice to have you with us.

Dr. Morton: Nice to be here

Wendy: Now let me ask you, is it going to be housed at the Northwest campus the newly built Northwest campus I might add. What are the components? Will the components be the same as in the component at USC program?

Dr. Morton: Exactly the same. We will provide students space for their companies. We will provide administrative assistance for the students as is necessary, provide telephone support. We will provide the computer, the thousand dollars start up seed money there. We are trying to emulate success is what we are trying to do. And that is what we see in the USC Incubator Program.

Wendy: Wonderful

Dr. Morton: So that is the direction we will be going in

Wendy: Good, What was impotence behind the program between partnership between USC and Greenville Tech?

Dr. Morton: We’ll several things, success factor, the nature of the program being centered on students because that is what we want to do here at Greenville Tech to infuse this idea of entrepreneurialism with our students that they don’t necessarily have to depend on a larger corporation that they can do things themselves. And we will be looking for students with that kind of drive and those kinds of ideas to help those students create companies that will be a benefit to the community.

Wendy: Wonderful now when does your program start?

Dr. Morton: Well we’re starting almost immediately. We are working on the policies and procedures. We are also working on a time line. All that should be implemented in the next few weeks. Part of that time line is announcing when we will take applications from students and that is going to be right after the first of April. Hope everybody does not think it is a cruel April Fools joke.

Wendy: chuckles

Dr. Morton: but we are going to do this because it just sounds too good to be true in so many cases as least in some cases so well probably have the selection by committee. Excuse me. Sometime in July and then the students will actually start working on their companies.

Wendy: okay

Dr. Morton: in the fall

Wendy: okay. How many companies are you looking to bring in each year or every other year?

Dr: Morton: We’ll start off with two the first year and not the year after but in two years we’ll take two more companies

Wendy: okay. So we are assuming at the end of two years, the companies are mature enough that they can sustain themselves in the market place? That is the goal of the program too correct?

Dr. Morton: That is correct.

Wendy: Okay, Is the entry program the same as at USC?

Dr. Morton: It will be. I have been looking closely at the student program at USC. The application process that includes the business plan as Joel has stated, and we will be looking at those business plans closely. We will probably lean on USC a good bit the first year to figure out exactly what this application process should look like so we will be as fair as we possibly can to everybody concerned. A lot of times, you know we’ll want to throw the first two people in there that come across our desks and that is not necessarily what we need to do. So we will be leaning on Joel and his staff to help us make those decisions and be a good partner with us.

Wendy: And the resources will also be to the students here at Greenville Tech will also be from the resources from USC as well as Midlands Tech because Midlands Tech is also part of partnership with USC correct?

Joel: That is correct.

Wendy: Joel, what are some of the companies, types of companies that have graduated from the Incubator Program. If you can tell us.

Joel: Oh sure, I would think that your viewers are probably familiar with X-Box

Wendy: yes

Joel: If any X-Box game that is out there has trees, or if they have trees the trees were designed and software written by one of our graduates companies. IDV Interactive Data Visualization, exciting, little company. The first company we ever had to go public is a company called Collexis and you can goggle them and hopefully watch their stock up go up.

Wendy: Is that a hint, we should start to buy. And chuckles

Joel: No, no I can’t. I would not.

Wendy: You can’t predict that.

Joel: I can not predict that. You can certainly watch and see how they do. We call them goggle on steroids.

Wendy: wow

Joel: Let’s just say that you wanted to know everything there is to know about people who have angina who have cancer. You type in what you want to type and get a list of all the people, places like John Hopkins and Emory use their services. We have another company that is in the data mining business. Data mining is in the state of South Carolina for instance, if you have a disaster, God forbid we have another one, but if we were too there are several different agencies that are involved in that disaster recovery. And what this company will do is it will mine through software all the information and put it into one report so now you don’t have to read ten reports. I thought that was interesting.

Wendy: That is pretty interesting.

Joel: We have some people who have a company called Bywatch that makes a harness that goes around your chest that really a lot of diabetics use because it measures your heart rate and other vital signs and also has a GPS system on it so if you happen to collapse and you can get to the button, you would put out a signal and people can come and pick you up and hopefully save you your life. That is a very interesting company. We have of course website companies. We have companies involved in cancer patients. We have one exciting company called twotoads.com that does software and filtration software because a lot of people out there children are doing a lot of internet and you can sign up with them and what they will do is filter the things that you don’t want your children to see. That nine or ten year old you have there is probably very computer literate.

Wendy: chuckles

Joel: You don’t want him looking at things that

Wendy: And they are more computer literate than I am, I must say.

Joel: chuckles they are more computer literate than I am, I can assure you.

Wendy: X-Box that’s pretty impressive.

Joel: Yea the X-Box one is pretty interesting.

Wendy: Yea that is pretty interesting. Now the Incubator Program is this a model that is more and more colleges and universities are adapting or is it coming up rather quickly or is it just growing?

Joel: Actually incubation has been around for about thirty years. Probably the best program in the country is Georgia Tech. University of Florida, University of Arkansas, Louisiana State University, North Carolina have incubator programs that have been around longer than we have so this is not something that is brand new. It is something that has been around at universities. Now what Universities are doing, their professors commercialized the great ideas that are coming out which is one of the reasons universities got interested in to begin with. Our research foundation will help you commercialize your idea if you are a professor and they will take equity in your company. So that’s kind of what the incompetence was.

Wendy: Right, Now you guys have won awards for the incubator program so congratulations on that.

Joel: Thank you

Wendy: Now this is one aspect of the incubator program. There is also a standard company and a lending company that is part of the program which we have not touched on. Tell us a little about that and for you Dr. Morton will we have the same programs at some point?

Joel: The standard program is anyone whether it be a faculty member at the university, just someone that just wants to start a business as long as they are technology orientated and I think the key to someone getting into the incubator is they want to use Greenville Technical College or Midlands Technical College or the University of South Carolina. I tell people all the time if someone comes to me for the cure for cancer doesn’t want to use one of the three institutions, doesn’t want to hire our faculty, doesn’t want to hire students, just all they want is cheap office space; we won’t help them.

Wendy: This is not the place

Joel: This is not the place for them. But if you do want to use one of the three institutions and you do want to start a business then it is a place to get started and so that is the regular program. The student program came after that because we had a lot of students at USC that were started businesses and they were doing it in their dorm room and they had no place to start one. And the landing part of the program has to do with the lending part of it and we have four or five. We have one from Italy. We have one from Nova Scotia. We have one in England that actually wants to come to South Carolina and work with the University of South Carolina or Greenville Technical College or Midlands Technical College and so they land there they are not start ups. It land there they find out who they want to be their accountant, their bank and then they move out a lot quicker than the start ups. That’s a landing party. Now Dr. Morton will have to tell you on whether or not he going to do that here in Greenville.

Dr. Morton: Well I will tell you there is so many different avenues we can explore with this kind of opportunity. We are looking at things from a broad perspective. We’re not just sequestered ourselves to just one aspect but we do want to grow that single aspect first before we launch into something else. I don’t think our ideas are fully formulated but we are looking for the possibilities for the future for something along the lines like in Columbia has and something along the lines of a landing pad as well. Plus we want to develop the ideas of the faculty members and community that want to draw the resources. That’s what we are all about so those are natural things that I am certain will come down the line. We just want to make sure that we can do the best of which we possibly can with what we have partnered with Columbia at this point and time.

Wendy: Well this sounds very exciting and you know Dr. Morton I am very excited to know that we are going to have companies that contribute to X-Box like

Dr. Morton: exactly

Wendy: like USC program did so we are excited thank you both very much. One last question Dr. Morton, if people are interesting in learning more about the Incubator Program where can they go?

Dr. Morton: at this point call me. My number is 250-3600 at the Northwest campus and that is where it is going to be housed. Hopefully in the future we will start replicating at the other campuses as well and provide space all over Greenville County for this wonderful opportunity.

Wendy: It sounds like a great opportunity

Dr. Morton: It is

Wendy: Thank you gentlemen for being here. And that is going to do for this addition of Momentum. Thank you for tuning in and we will see you next time.