Incubating ideas that hatch

By ESTELLE SARNEY

You're young, you've got a great idea to launch your first company, but could really do with some business advice. You're cash-poor and know that consulting a professional will cost plenty. What if you could get top advice for free, in low-rent premises with other young people starting up their own companies, sharing resources and contacts?

That's exactly what an innovative new business incubator is doing in Wellington. The NRG Trust has filled a gap in the incubator market by focusing on young entrepreneurs aged 18 to 30.

After its first year of operation it is now nurturing seven developing companies on the sixth floor of the Wellington Railway Station. Most are in the IT sector, but by happy coincidence, none is in competition with the others. Among them is a web designer, a software developer, a programmer and an office solution provider.

"It's a nice fit because they all benefit from each other's contacts - it becomes self-supporting," says trust manager Phil Sales.

The idea for the incubator arose after young entrepreneur Justin Flitter met local employment specialist Roger Tweedy. They wanted to find a way to bring other young working professionals together to benefit from the experience of wiser heads. The trust gained a grant from the Wellington City Council to kick it off, but now Sales is keen to make it as self-sufficient as possible.

"We can't teach our businesses to be lean, mean and efficient if we're not lean, mean and efficient ourselves.

"We now get a lot of our funding from renting out space in the incubator - rents start low and increase incrementally over 18 months, when a business is expected to fly the nest to its own premises - and some sponsorship. We're a charitable trust, and feel that there should be interest in us from members of the corporate sector. We've got some groups we're going to target in coming months."

Driving that project is one of the incubator's tenants, Louise Parkin. Her company, Saints Information, specialises in prospecting sources of funding for not-for-profit agencies in New Zealand, Australia and the UK. When she approached the trust about renting space, she was told that at 40 she was outside the target age group. But would she like to serve on the board as a role model?

She has since moved in as an anchor tenant, providing the trust with some consistent income amid the fluctuating rent of the other tenants. "I provide mentoring to anyone who comes through, particularly women," says Parkin. "And I can help with any market research they need done. Usually I do it for free - if it's a big survey I'll work out a mate's rate."

In the two-way partnership that characterises the incubator, Parkin says she has benefited from the breadth and depth of experience of other board members, all established business operators and developers.

"The networking available has been a huge help. One of the other tenants put me on to a sales mentor, and his advice has helped me turn my business around in the past three months."

Being surrounded by other growing businesses creates an inspiring, invigorating atmosphere.

And one in which people feel safe offering and accepting constructive criticism, says Eamonn Kelly. He and business partner Julie Allison were the trust's first tenants with their new company Capella Consulting.

They offer expertise in managing computer systems more efficiently, and have the New Zealand Police and Cathay Pacific among their clients.

"Julie and I had both worked in IT for a number of years so we knew our product, we just weren't sure whether we were running the company successfully or not," says Kelly. "The trust has been useful for getting business advice, including constructive criticism. In return, we've been able to help the trust and other tenants with IT services."

He adds that he enjoys the social working environment. "It can be isolating setting up your first business, and we could have ended up locked away in an office somewhere. Here, we've got our own space but can just step around the corner if we want to bounce ideas off someone."

Sales says the trust is happy to be a virtual incubator to young business people who don't want or need its physical space, and already has about 200 such contacts on its books.

They add to the networking possibilities, and in time may be a source of specialist mentors for other fledgling entrepreneurs.

* While there are no known incubators focused on young business people in the northern North Island, Industry New Zealand recommends checking out some general incubators listed on its website www.incubators.govt.nz, particularly AUT Technology Park, e-Centre Massey, The Icehouse and Westsmart Incubator.