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The Mother of All Business Incubators/Accelerators

Posted by on January 12, 2015

harvard2I’ve been involved in a lot of start-ups. No grand slams, but a few solid base hits and some spectacular strike-outs. My ex wife called me a “risk junkie,’ – I never agreed with that assessment, but I do enjoy the passion and energy of working with founders and employees of new ventures.

I’ve also been an adviser to a couple of incubator/accelerators. One achieving moderate success, the other a catastrophe, but a disaster that was predictable from day one.

Two years ago, I talked to the guys planning BlueSeed, which was a concept of a cruise ship as incubator, parked in the ocean off Silicon Valley. Being beyond the maritime limit of the US would have allowed BlueSeed to attract entrepreneurs from all over the globe that could come to “the U.S.” without visas.

BlueSeed had hoped to have as many as 1000 start-ups on board, along with support services and a group of mentors; they would charge nominal rent for the start-ups space and living quarters.

It sure captured my imagination; the imagination of big investors? Not so much.

I love the concept of “start-up cities,” and they have been launched and successful for specific business segments around the globe, i.e. Dubai Media City.

Illinois has an empty facility that would be an ideal location for a start-up city. It’s large enough that it could not only house the offices and manufacturing / distribution space for growth companies, but also house, feed, and educate the entrepreneurs and employees.

It’s large enough so that it would not have to be pigeonholed into a niche category, but could have separate ‘wings’ or floors for different disciplines, such as medical, the ‘internet of things,’ consumer products and so on.

Depending on the configuration of the property, square footage could be divided into work/live spaces, or housing could be in one area, offices in another.

Rents, such as envisioned by BlueSeed, could be charged not only for companies and residents, but also on a bid basis for support services: companies could vie to provide services like dining halls/outlets, laundry, a university, medical clinics, salons, law and accounting offices, and retail. Common areas would encourage collaboration and spawn joint ventures.

The facility should not consider itself in the landlord business however, that is the downside of many incubators; instead rents for start-ups should be very nominal, while the rents from support companies and services could be much higher.

The space was built in the late 1990s, at a (replacement) cost of $250,000,000, and has been empty for several years. It is located in McHenry County, a hour by (frequent) commuter train from downtown Chicago, and less than an hour from O’Hare International and forty minutes from Chicago-Rockford International airports.

Residents seeking leisure activities “off campus” do not necessarily have to travel to Chicago, as the area is surrounded by the northwest suburban communities of the Chicago area, which offer virtually every type of retail, service, and dining establishment desired.

The facility is presently called the Midwest Corporate Campus, and is comprised of 1.5 million square feet, on over 300 acres, with 6,000 surface parking spots. The climate and geography lends itself to an ideal server farm location.

The property is current;y divided up into these sections:

  • 400,000 square feet of office space

  • 165,000 square feet of core services

  • 619,000 square feet of manufacturing space

  • 355,000 square feet of distribution

It would take some wheelbarrows full of money to launch this, and unfortunately, most state, county and local economic development authorities don’t have access to those amounts of resources in the current climate.

But a substantial venture fund or multinational, particularly from the UAE, India or China would be a good candidate.

Illinois, and McHenry County should take a hard look at this concept, and establish Northern Illinois as the incubator/accelerator center of North America.

These are my thoughts, what are yours?

Aerial View of Site

Aerial View of Site

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