The Micro-Multinational: Incubators Aren't Just for Start-Ups The idea of a business incubator is to host a bunch of start-ups together in one space. The goal is to build a vibe of inspiration and to sprinkle in some shared services - legal, accounting, human resources - in the hope that efficiency and energy and creativity will blossom. Some incubators even offer financing. The first time TerraCycle tried an incubator we were very much in the start-up phase. The EcoComplex was built as an incubator for waste-technology businesses and is located on the Burlington County Resource Recovery Complex (the local landfill). Our deal was really generous - partly because we were just the second business to move in. Start-ups have more leverage when incubators are trying to create an impression of a bustling space with lots of promising businesses. For start-ups, it can be possible to keep the monthly fee for incubator rent and services close to zero. And some companies avoid paying any fee at all by giving equity. That's not always a good idea, but most start-ups have to choose carefully how they spend their resources - and it worked for us. We negotiated free office space and free space for our prototype technology, a machine that collected worm waste for use as fertilizer. In exchange, we gave up some equity and agreed to start paying rent when we hit certain revenue milestones. The EcoComplex not only gave us access to the scientists at Rutgers University but also brought us credibility through its affiliation with NASA and other notable institutions. At the time it was a godsend that saved our business. We eventually grew out of the EcoComplex, and for a number of years we had no direct involvement with incubators. Then, in 2008, we started going global with Brazil our first foreign market. We were no longer a start-up, but as we were entered new markets - today, we operate in 22 foreign countries - incubators helped us get going in many of them. Our first interaction with an international incubator was in Brazil. This started when we sold part of our Brazilian operation to Warehouse Investimentos, which was lead by a group that wanted to bring a similar incubator concept to Brazil. They invested and we moved into funky new office space. While we did have had some challenges fitting our legal and accounting systems into theirs, it has worked well and saved us about 50 percent on our cost of administrative services. Earlier this year we partnered with an incubator in Budapest called Colabs (which sounds like "collapse" when you say it). And then the chief executive of our partner in Germany called to suggest a big idea: Why not start a waste incubator in Berlin? After discussing it further we decided to host a European competition where people could apply from anywhere in the world to submit a business concept that is focused on waste. TerraCycle would join by moving it's German offices from Mainz to Berlin. I will tell you more about this as it develops. Three of our international offices are now in incubators, and I am encouraging all of our general managers, especially the ones with smaller offices, to consider incubators. Beyond the money-saving efficiencies of shared services, the biggest benefit the incubators have brought us is the high energy work environment - with interesting people walking through all of the time, with dynamic ideas being shared and with the informal competition. If the company across the hall from you is working late hours and making great progress, your team may choose to do the same. It's very hard to generate that kind of motivation through management. And while it's not right for TerraCycle, here's another incubator program that I've heard about that sounds fabulous. It's called Unreasonable at Sea, and it's a mentor-driven program for technology ventures that will set sail Jan. 9, 2013 and travel 25,000 miles around the world. The goal is simple - to help entrepreneurs accelerate and scale their ventures. This maritime incubator will help companies take their products or services to 14 countries in 106 days. Tom Szaky is the chief executive of TerraCycle, which is based in Trenton.