HIGHLAND HEIGHTS, Ky. -- Four years ago, Samuel Hallforth was an undergraduate student at Northern Kentucky University who used football to teach himself economic theories. Today -- just a few months after he graduated with a bachelor’s degree in economics-- he’s the CEO and founder of a company that uses economic theories to predict statistics for fantasy football enthusiasts.
The agent that catapulted Hallforth from student to business owner was NKU’s INKUBATOR program, which celebrated its five-year anniversary by graduating its fifth class of entrepreneurial teams on Aug. 1.
A 12-week business accelerator housed within NKU’s Center for Innovation & Entrepreneurship -- and an initiative of NKU’s Haile/US Bank College of Business -- the INKUBATOR accepts up to six teams of NKU students or recent alumni each year and provides them with the education, mentoring, financing, facilities and other resources they need to successfully start a company.
Yuliya Bui and Olga Maneylova listen to mentor Tim Metzner of Differential during an INKUBATOR seminar. (NKU CIE)
Since its founding in 2012, INKUBATOR has graduated 27 teams and jump-started 18 businesses that still are in operation.
The program, according to NKU President Geoffrey Mearns, is a great example of how education can offer a return on investment.
“We are always looking for statistics that will vividly illustrate that point, and this is a perfect example,” Mearns said. “NKU (through the Haile/US Bank College of Business) has invested $56,000 in the INKUBATOR -- a relatively small amount -- and its graduates have raised $2.1 million in outside funding and created 53 jobs.”
Why it started
Several years ago, Rodney D’Souza, NKU’s Fifth Third Bank Endowed Professor of Entrepreneurship and Center for Innovation & Entrepreneurship director, was working closely with Cincinnati-based and nationally ranked startup accelerator The Brandery to find more ways to engage local university students.
“We saw that there were three reasons why local university students weren’t applying to The Brandery: Either their ideas were too early and they weren’t a good fit for the accelerator, the ideas didn’t have the right teams backing them, or the ideas weren’t vetted properly,” he said.
Rodney D’Souza, NKU’s Fifth Third Bank Endowed Professor of Entrepreneurship and Center for Innovation & Entrepreneurship director, introduced INKUBATOR’s first demo day in 2012. (NKU CIE)
After looking at different universities around the country with accelerators, D’Souza founded the INKUBATOR (named “INKUBATOR” so it would have “NKU” in its title) to serve as a pre-accelerator for larger accelerators with more resources.
In the past five years, however, the INKUBATOR has morphed into an accelerator in its own right.
“The aim of the INKUBATOR is to build teams around ideas and graduate those teams with a strong business model and, for many, with a prototype, as well,” said Zac Strobl, INKUBATOR program manager and co-founder.
Some impressive alumni
One product of the INKUBATOR is Vegy Vida, a graduate of the program’s 2014 class.
Vegy Vida is a pure-ingredient dip and topper for vegetables. Starting with just two employees, Vegy Vida has since grown to employ seven. It launched in 2014 into 12 Remke Markets and, today, is in roughly 85 locations, including Remke, Dorothy Lane Market and Marsh Supermarkets.
“Vegy Vida wasn’t going the funding or accelerator route,” Strobl said. “They were really successful at getting in stores right away.”
Another alumnus of the INKUBATOR that has seen demonstrated success is a 2012 graduate called CompleteSet.
CompleteSet is a shoppable knowledge base of collectibles that matches collectors to sellers who have what they want. To date, fans have used CompleteSet to collect 1,130,285 of their favorite things, including antique toys, vintage clothing or modern memorabilia.
Gary Darna in front of a portion of his vintage Star Wars collection, which inspired him to co-found the company CompleteSet. (Patrick McCue)
CompleteSet CEO and Co-Founder Gary Darna had recently graduated NKU when he applied to the INKUBATOR.
“I was trying to find a co-founder,” Darna said. “I’d been searching for a year for a technical developer. I’m a front-end developer and needed someone to do the programming language behind the website to actually make it function.”
Darna was paired with Jaime Rump, an undergraduate computer science student at the time, who became CompleteSet’s co-founder.
“If it wasn’t for the INKUBATOR, we might not exist today,” Darna said.
In June, CompleteSet beat out 3,000 other startups to participate in the Techstars Chicago accelerator program, with a goal of growing its user base from 50,000 to 100,000 when the program culminates in late September. It also plans to launch an Android app -- its iPhone app launched in 2015 -- in September.
A work in progress
Despite its successes so far, which include being ranked among the top five college accelerators and incubators in the world in the area of competency development by by UBI (University Business Incubators) Global in 2014, and among the top five university business accelerators in North America by UBI Global in 2015, D’Souza said the INKUBATOR is still a work in progress.
“That ranking is pretty cool given our meager resources,” D’Souza said. “We’d like to keep that going forward.”
The INKUBATOR is free and unlike most accelerators, it doesn’t take a percentage of the company. It also accepts recent alumni and students from any discipline within NKU, as well as students ranging from undergraduate to doctoral, Strobl said. It also welcomes entrepreneurial ideas that aren’t just high-tech/high growth, even counting among its graduates two nonprofit organizations.
INKUBATOR’s first five years at a glance
- 264 applications
- 29 teams accepted
- 27 teams graduated
- 58 students/alumni accepted
- 50 students/alumni graduated
- 18 teams still operational
- Past participants represent NKU’s College of Health Professions, College of Arts & Sciences, College of Informatics, Haile/US Bank College of Business, Chase College of Law, and College of Education & Human Services
To join the INKUBATOR, NKU students and alumni can either submit a business idea to be considered by a team of judges or apply to be a team member.
“They can come in with a team already or be paired with team members once they’re accepted,” Strobl said. “We jokingly say it’s kind of like eHarmony in that we put their information on our website and help them make connections with others.”
The creation of the INKUBATOR aligns with the strategic plan of the university to focus on interdisciplinary opportunities, Mearns said.
“The INKUBATOR doesn’t simply take applications from one college or one discipline, but brings together students with different talents who might not have otherwise met each other,” he said.
And D’Souza and Strobl regularly tweak aspects of the program when they see what’s working and what isn’t.
“In addition to switching from a one-size-fits-all curriculum to a competency-based, individualized one, we’ve also grown our mentor base and, in our last class, began to push teams to get paying customers, so that when they graduated, they had paying customers,” D’Souza said.
Another adjustment the INKUBATOR has made in the past five years is to award funding to companies within the program based on competency, Strobl said.
“The teams have to hit milestones and make progress while in the INKUBATOR and, overall, we have to feel like it’s a good investment,” he said. “The teams also have to prove to us that they’ve validated their business model to qualify.”
Teams can earn up to $5,000 each.
Funds to grow
For the first time this year, the INKUBATOR incorporated a prize based on fan votes at demo day – the capstone of the program when teams present their business models and/or prototypes to an audience consisting of regional business and entrepreneur leaders at the end of the 12-week session.
Hallforth and his company, Waiverhawk, won $1,000 from the Haile/US Bank College of Business, as well as an additional $500 from Cintrifuse, an Over-the-Rhine-based organization that connects the region’s high-potential startups to advice, talent, funding and customers, for being voted the fan favorite.
Waiverhawk was the winner of the first fan vote prize INKUBATOR offered, at its fifth annual demo day. Samuel Hallforth, in the middle in a blue-collared shirt, and Brent Umberg, second from the right, are Waiverhawk’s co-founders. (NKU CIE)
“When I initially applied, I had only taken a few entrepreneur classes and had no idea about the commitment involved, stress involved and, from a business perspective, the amount of work and attention to detail it takes to run your own company,” Hallforth said. “I really benefited from the expertise of D’Souza and Strobl and the mentors, and all of the connections they helped us find and helped us utilize.”
The five-member team at Waiverhawk now is considering applying to another business accelerator, looking into angel investments, or going the route of self-funding, but plans to launch its full website in a few weeks.
