Income & Employment / 2013
The Moebius Incubator: A New Step for L.A.s Entrepeneurs
The Moebius Incubator is a start-up incubator based in Los Angeles with two aims: to dive deep into the problems of making great products and to make companies that are both profitable and socially beneficial. Our dream is to seed a new culture of entrepreneurship. L.A. is currently rated 3rd in the world for start-ups (as seen in the Startup Ecosystem Report: http://reports.startupcompass.co/StartupEcosystemReportPart1v1.2.pdf). We aim to leverage this strength in order to address the problems of employment and income disparity L.A. faces. The Moebius Incubator attempts to innovate on the incubation cycle, and in so doing make entrepreneurship more socially relevant and available as a career to a broader pool of people. Our first innovation is to directly tackle the problems of making great products: namely engineering and design. Many incubators currently rely on the talents of their participants to develop great products. We believe we can support entrepreneurs in this process. Both research and traditional wisdom indicate that project-based and contextual learning goes the deepest and lasts the longest. We propose a model of incubation which provides not only support for traditional business development but also engineering and design. We aim to do this in two ways. One is to develop a best practices model: what work out there is most relevant to the engineering and design experience in 2013? By establishing a canon of the best design — from the revered practices of Edward Tufte to the contemporary practices of Bret Victor — as well as the best engineering — ranging from the new wave of real-time frameworks such as Meteor.JS to the visionary work of computing legend and Los Angeles based Alan Kay — we believe we can give our entrepreneurs a strong starting point to work in the information economy. Secondly, we aim to hire in our incubator a design and engineering coach to provide weekly support and mentorship for projects. By shifting away from a class based model and to a project-based model, we adapt what we have seen to work in the best K-12 education (such as San Diego’s High Tech High) to the entrepreneurial space. We will also have a business mentor — recognizing the depth of service incubators currently provide in shaping business plans and facilitating hard-to-find connections to investors. Our other major innovation as an incubator is to select companies along two metrics: profitability and social good. We deeply believe that the most profitable work will be the work which helps individuals, families, and cultures grow. Apple has been a testament to the profitability of beautiful design. We seek to expand on their vision and look for other opportunities where human development — be it individual or cultural — and entrepreneurship can be aligned. The question of evaluating socially meaningful work and having it survive the necessary pivots of business will be a challenge. We draw inspiration from organizations like Givewell.org that through a research based approach we can understand what truly will help our society and shape our companies accordingly. While this work — of evaluating companies for social good — will be a continued research process, we believe signs like the UN ratification of the triple bottom line in 2007 ( ) show that we are ready for the development of further metrics for business success alongside the classical revenue and profit based metrics. Logistically, we aim to host our first class from late September to December of 2013, using the grant funding to run operational costs. We aim to raise seed funding for the companies separately. May to September will be spent interviewing candidates, researching best practices in engineering, design, and incubation, and hiring mentors for the launch. Our short time line will let us see how viable this model is quickly. Our dreams are to find the momentum to seed a new culture of innovation in Los Angeles — one with it’s own clear and unique character. We believe that entrepreneurship can grow in two ways: by becoming a force in the care of our city on all fronts, and by becoming a career path that a wide swath of people see as viable for themselves. Our strategy — to support the growth of entrepreneurs on all fronts and to engage a second social metric as a requirement for success — aims to provide the roots required. We believe that in 2050 entrepreneurship is something Los Angeles can look at with gratitude for both what is has done for us as well as who it lets all of us become.
What are some of your organization’s most important achievements to date?
Droplabs succesfully provided a community-based education center to the community with all services being at no or low cost. Our prime acheievements have been:
Barn-raisings: We have hosted barn-raisings where 15 − 20 community members get together to provide a day of web development for a non-profit or community member. See http://droplabs.net/news/barn-raising-and-code-sprint-at-droplabs-uniting-the-drupal-and-time-banking-communities
Low-cost co-working space: We offer fulltime access to our space at $150 / month, a quarter of the price of competing spaces. This is one contribution to creating a diverse socioeconomic tech community.
Consensus-based organizing: We operate by allowing all full members to have a voice in the direction and organization of Droplabs.
Community-access education: All our classes are low or no cost and have ranged from a focus on web and technology to classes about cooking and Korean culture.
Please identify any partners or collaborators who will work with you on this project.
We seek to build off Los Angeles’ existing entrepreneurial ecosystem and bring it a new perspective. To start we’ve partnered with:
Santa Monica New Tech (http://www.meetup.com/Santa-Monica-New-Tech/) , a start-up meetup that has 250 − 300 people in attendance monthly, as a forum for our participants to pitch, get feedback, and meet the tech community.
Quantified Self Los Angeles (http://www.meetup.com/QuantifiedSelfLA/) — a user group in the new space of personal & digital health — to understand how we can best contribute to those spaces.
Meteor LA (http://www.meetup.com/Meteor-LA/) — a user group for one of the web’s latest real-time application frameworks — to support our engineering and design fronts.
Please explain how you will evaluate your project. How will you measure success?
Our project will have a very concrete outcome: at the end of our incubator’s first class, concluding at the end of 2013, we will evaluate project success by looking at the question: “How have our businesses fared?” As our mission is to be explicit about building business that are both profitable as well as socially beneficial, we plan to evaluate both. Models such as the triple bottom-line (http://en.wikipedia.org/wiki/Triple_bottom_line) serve as inspiration for us. To start, we’ll use a four-part rubric, covering our pedagogy (engineering and design success) and our mission (financial and social success)
- Engineering success:
- Has the company been able to produce a working demo?
- If not, are they on there way there, or have they had critical problems in the engineering of their technology?
- If they have had critical problems, was there something we could have done better to help them solve this issue? (i.e. Team failure or incubator failure?)
- Design success:
- Has the company been able to produce a clear and viable idea?
- Can someone outside of the tech world understand their idea?
- Do they have evidence that their target audience does indeed want to use their product?
- If not, was it a problem of graphic, interface, or experience design?
- If the product is undesirable or unusable, could we have helped at a key juncture?
- Financial success:
- If the company wants to move forward, do they have funding for continuing their discovery phase / moving into the validation phase?
- Are they connected with investors such that a further seed round, a Series A, or other financial support is in sight?
- If not, is it because of lack of business development work, lack of clear communication about the product, or a core product issue?
- If it’s a business issue, could it have been averted?
- Social success:
- Does the company have a socially relevant mission?
- Does their product pursue that mission in a clear and obvious way?
- If the company has to pivot, do we expect the mission to grow with it, based on the team’s work so far?
- How many people will be affected by their work, and is there a clear and validated plan as to what change they will bring?
- If not, why? Is it an issue of the domain they are in, the strategy they undertook, or the execution of that strategy?
- If the mission has gotten lost, what resources can we provide to reconnect to it?
Using this four part rubric, we support our larger strategy: support the growth of jobs and companies in a unique entrepreneurial context in Los Angeles. By having successful and socially relevant companies we aim to concretely build more jobs in Los Angeles at the rate of 10 companies by the end of 2013, and in the long term shift the culture of entrepreneurship to one that becomes more universally accessible.
How will your project benefit Los Angeles?
We aim to improve L.A. by building on of one of L.A’s bright spots in the employment & income sector: it’s startup scene. LA is rated as the 3rd best place in the world to start a company (see Startup Ecosystem Report: http://reports.startupcompass.co/StartupEcosystemReportPart1v1.2.pdf), with its two weaknesses as support for entrepreneurship and the mindset for it. L.A. is well established as a haven of production talent and investment capital due largely to its relationship with Hollywood. The question becomes: how to leverage these natural strengths for the greater good of L.A.?
We believe that entrepreneurship can become the new family-run business. As the information economy allows businesses to reach unprecedented scales, we see a potential for large-scale business to flourish here. The strong culture of family-run and immigrant-led businesses show that L.A. has been a great boon to individuals with drive. Our incubator, by explicitly engaging the design and engineering pieces needed to work in the information economy, aims to make develop entrepreneurship as a career path available to all — not just those primed for it. We believe that entrepreneurship can be a leveling force agains the great socioeconomic disparity present in L.A., by opening up a path to all that yields both personal financial reward as well as strong support for the local economy.
Our first project aims to start 10 new companies in Los Angeles. With success, our incubator will run a spring and fall round in 2014, continuing that rate. We estimate our companies will grow by an average of 15 people in their first 2 years and 50 in their first 5 (based on the Ecosystem Report.) Assuming an 80% success rate of initial funding seen in Los Angeles by incubators such as LaunchpadLA, we expect to seed an incremental increase in jobs available over the next 5 years. Our hope is to add jobs — a projected 150 companies over 7 years with a total of 3,000 employees — as well as the contribution to a culture which can identify its own needs and turn them into its own jobs, addressing both the symptoms and the roots of the problem.
What would success look like in the year 2050 regarding your indicator?
Our hope would be that success in 2050 would be visible in three ways:
A measurably and obviously more diverse entrepreneurial pool. Right now there is a heavy bias towards male entrepreneurs from the middle-class and higher. With an incubator that focuses on building civic and purpose-driven missions, we expect to attract talent from all walks of life, who have specific missions they want to bring to life via entrepreneurship.
LA as an entrepreneurial hub in its own right. As mentioned above, LA is 3rd in the world for entrepreneurship, but still all entrepreneurial hubs are benchmarked and compared negatively against Silicon Valley. We believe that a socially driven incubator will be a step towards a differentiation of L.A.’S own scene apart from Silicon Valley’s. In 2050 we’d like people to know L.A. for its particular entrepreneurial character as well as for its other industries.
Enough jobs and businesses thriving from these programs to see a measurable impact on unemployment. We believe that a needs and values driven entrepreneurship culture can begin to address the feedback loop between cultural and social issues and unemployment. When we can find ways to solve our local problems with entrepreneurship, we create jobs and our city as a whole gets stronger. By being a catalyst in this process, we aim to be one of many factors in bringing L.A. From 2 − 3 percentage points above the national average to that many points below it.