Fremont Has the Most Startups per Capita in the Nation – Where Do We Go from Here?
Working as a graduate intern with Fremont’s economic development team during the past three months has been a delight. The clear focus and leadership that the team exhibits for increasing Fremont’s business profile is energizing to witness. An exciting project on the docket is a Feasibility Study for Fremont’s Innovation District, home of the Tesla Factory. With the Warm Springs BART Station now open for business, it will serve a central role in the District’s transit-oriented development. Directly west of the station, the City is spearheading a new pedestrian bridge that will connect to a public plaza, and where a new center for “innovation cultivators” is planned as a boost to Fremont’s startup ecosystem.
Innovation cultivators are organizations that support the growth of entrepreneurial individuals, firms, and ideas. There are three broad categories: coworking spaces, incubators, and accelerators. There are also hybrid models that include further segmentation and specialization of each category. Some operate independently and some are attached to corporations or institutions of higher learning. One might say that these innovation cultivators are innovative in themselves.
Incubators and accelerators can be hard to distinguish, even among seasoned business professionals. In short, incubators are a place where early stage entrepreneurs can “incubate” ideas, while accelerators “accelerate” (or scale) the business to market, compacting years of learning into 3-6 short months of intense mentoring.
The contract between cultivators and startups also differs. Incubators are accustomed to housing multiple startups under a single roof for 1-5 years, and entry selection is network-based. Accelerators often provide capital in exchange for equity. For example, an accelerator might provide seed funding of $25,000 for a 7 percent return of the startup’s equity. These programs are application-based and usually culminate in a “Demo Day” where entrepreneurs pitch their company to potential investors.
Surprisingly, Fremont ranks as having the most startups per capita in the nation. The Warm Springs project seeks to capitalize on this statistic by connecting startups to the resources that they need to scale locally. Given Fremont’s legacy and expertise in advanced manufacturing, a focus on hardware accelerators makes sense. “Hardware is hard” goes the saying, but there are bullish accelerators who prepare hardware startups to meet the complexities of global manufacturing and challenges of supply chain management.
Another crucial element to a startup’s survival and growth is venture capital. Based onFremont’s strengths in clean tech and bio tech, VC funds focused on these specific industries would do well to maintain a presence on this corner of Silicon Valley, generating buzz and thereby affecting future investment and development activities.
On May 12, submittals were due for a RFP to plan and position the city-owned Warm Springs plaza as a center for innovation cultivation. I look forward to following the progress as Fremont plays an active role in celebrating and nurturing its startup culture.