Schenectady entrepreneurs startup businesses appreciate help of downtown incubator

By Michael Mullaney - The Daily Gazette

Mike DeBritz's basement was overflowing with scissors, tambourines and little bottles of fake blood.

His year-old business, Community Learning, had about two dozen customers from Niagara Falls to New York City. Reviews of his after-school enrichment programs, the forensics-packed "Cookie Jar Mystery" and scrappy "Art of Collage," were glowing.

But more pressing than the lack of space in his Niskayuna home was DeBritz's lack of experience with some of the more arcane elements of entrepreneurship - business plans, overhead, bottom lines, distribution chains and returns on investment. 

He decided to address both issues by renting two suites at the U-Start Business Incubator in downtown Schenectady. He started moving in last week, and has high hopes for his new digs.
"I needed help getting to the next level," DeBritz said. "That's why I came here."

The U-Start incubator, formed in 1999 by a group of local entrepreneurs who wanted to see more home-grown businesses in the Electric City, is hidden in two Victorian homes on Nott Terrace near the main entrance of Union College.

The nonprofit incubator tries to address the scourge of all start-up businesses: a limited cash flow. Rent is competitive at $9.80 per square foot, and the tenants trim their operational costs by sharing necessary but expensive amenities including a photocopier, fax machine, high-speed Internet connection, voice mail and conference rooms. 

But it's the intangible benefits of the incubator that tenants seem to most appreciate. This includes an informal and supportive environment, quarterly business reviews, a wide network of incubator affiliates, monthly workshops and a relationship with Union college.

"You do work in a bubble when you're by yourself, and it helps to have someone to bounce ideas off of," DeBritz said.

Overseeing U-Start and offering their guidance are Executive Director Temi Bova and Operations Manager Peter McElligott.

Bova worked in marketing and communications at General Electric Co.'s Advanced Materials business in Pittsfield, Mass., and Rensselaer Polytechnic Institute in Troy before joining the local incubator last month. She succeeded Jon Lemelin, who left U-Start in January to become the chief technology officer at the Graduate College of Union University.

Bova said marketing and branding are often two of the toughest challenges that start-ups face. "They can have a great product but if they don't know how to sell it, they won't go anywhere," she said. "We try to identify any challenges and ask how we can assist them or bring someone in to help assist them."

McElligott, who ran a consulting firm after working for 30 years as a chemist and engineer at GE's Global Research Center in Niskayuna, agreed and said a start-up business is less likely to go under if it has the "hands-on" assistance of an incubator. 

"They might have a good idea, but they may not have a good distribution plan or manufacturing plan to get the stuff out there," he said. "We help with that."

For U-Start tenant Peter Meenan, who runs Meenan Information Services with his partner Peter Duchessi, one of the most valuable benefits of the incubator is the ready supply of interns from Union College - who can earn credits while working for local businesses.
During his four years at U-Start, he's taken on six different interns - mostly economics majors - to crunch numbers and conduct interviews in order to determine if the local auto dealership industry would be receptive to new inventory and supply chain management software.

FIELD WORK
Based on the results of the interns' lengthy report, he dropped the idea and moved on to developing his new GenAura software, which helps companies identify pros and cons in their supply chains. He said the interns' field work saved him quite a bit of time.

Along with the benefits of networking and shared amenities, UStart's quarterly reviews have also had a solid effect on Meenan's business plan and bottom line. The incubator's managers and board of directors scrutinize Meenan's business plan and record books to identify if the company is on the right track. 

"It forces you to focus on your objectives and do a realistic assessment of whether or not you're meeting those objectives," he said. "For a small business, there's definitely an economic advantage to being in an incubator."

Another tenant, Rebecca Murtagh, agreed that networking through U-Start helped grow a local clientele for her Web site optimization firm, Karner Blue Marketing. She has also benefitted from the incubator's relationship with Albany law firm Nixon Peabody, which fields legal questions from U-Start tenants.
"That's invaluable for a small business," Murtagh said. 

The incubator also has an affiliate program for companies that don't need floorspace but want to participate in the quarterly re-Start's mentoring network and relationship with the local college.

Both Murtagh and Meenan said they plan to move their businesses out of the incubator at some point. But there's no rush, as there's no restriction for how long a company can stay at the old Victorians on Nott Terrace.

SEEING RESULTS
Even after leaving the incubator last year and moving to a Central Avenue location in Albany, local entrepreneur and Union College senior Brian Selchick, 21, is feeling the benefits of his two years at UStart.

Last week he pitched eWired Auctions, his 3-year-old business that specializes in online auctions and silent auctions for charities, to the Schenectady Museum. He said U-Start co-founder and Co-Chairman Walter Robb, a big name in the local business community, had a hand in securing the pitch. "His name probably got me in the door," Selchick said.

A history major who plans to run eWired full time after he graduates this spring, Selchick said his two years at U-Start were instrumental in helping him understand how to run a business.

"I was clueless," he said. "From beginning to end, they oversaw views and take advantage of U- my transformation from a college

TECH VALLEY LINK 
Selchick's only criticism was that he would like to see more student-owned and student-run business in the incubator. So would U-Start managers Bova and McElligott. Only four of the incubator's 12 suites are rented out, and they have one non-resident affiliate. McElligott said finding new tenants - often one-person operations run out of a basement or garage - can be tricky. He and Bova rely on U-Start's pool of mentors, affiliates and Union College ties to help market the incubator and attract new start-ups. 

The nonprofit stays financially afloat from rent and contributions from its board of directors, Bova said. She declined to disclose the incubator's operational budget. 

U-Start is a founding member of the Tech Valley Incubator Network, which includes incubators at The University at Albany, RPI, Watervliet Arsenal, Schenectady County Community Business Center and a few other.

U-Start Co-Chairman Robb said incubators are becoming more common across the country as municipalities and universities schools begin to realize the importance of start-up businesses to fuel the local economy. "If businesses get started in Schenectady, hopefully they'll stay in Schenectady," Robb said.