Aha! West Des Moines Business Incubator Turns 1

Entrepreneurial in its own right, the West Des Moines Business Incubator that nurtures innovations and other brainchilds of “aha! moments” is turning 1.

And is fitting for a prodigy with such promise, a big celebration is planned at 3:30 p.m. Wednesday at the incubator offices, 2829 Westown Pkwy., Suite 220. Special guest Marie Johns, deputy administrator of the U.S. Small Business Administration, will meet with owners of six businesses sheltered by the incubator.

The project is already a success story, said Sherry Shafer, mid-Iowa director for the SBA’s Small Business Development Center, which operates the nonprofit incubator for the city of West Des Moines.

The incubator’s first graduate, Appcore Technology, is “growing like a weed,” Shafer said, and Appcore CEO Brian Donaghy was in the Silicon Valley last week meeting with potential investors in his cloud-computing startup.

The company matured quickly, and moved to the downtown Financial Center at 666 Walnut St., Des Moines. West Des Moines officials hope that as businesses mature they will locate in the city’s corporate limits, but if they stay in central Iowa the investment has paid off, said Clyde Evans, the city of West Des Moines’ director of community and economic development.

Evans said the proposal for an incubator came out of discussions his staff had five years ago about the need to diversify its employment base.

He had just returned from a conference where a Waterloo graphics and Web design start-up, Darning Pixels, received the SBA’s Small Business of the Year Award. Nurtured in a business incubator at the University of Northern Iowa and since, Darning Pixels was “the kind of business we would really like to have.”

Insurance and finance are “our bread and butter” and the city is fortunate to have landed national headquarters for companies like Aviva Insurance and Wells Fargo, but also vulnerable if large employers get better incentives from other communities, Evans said.

At the same time, West Des Moines also needed to focus on small business development, Evans said.

“Seventy to 80 percent of job growth comes from small companies with less than 200 employees,” he said. “Research shows that companies that start in a community tend to have loyalty.”

“It’s go where you’re invited, and stay where you’re wanted,” Shafer added. “Can you create that environment – the entire ecosystem – that you really treasure those entrepreneurs and are willing to donate space, mentoring, food, whatever it takes because you really want people to stay long term.”

Though the idea germinated with city officials, it was important for the city to step away as a sponsor to attract outside investors.

“The city took it to a certain point, but needed to hand it off to be able to get outside funding,” Evans said. “The city umbrella can be a barrier to that.”

The board of directors of a nonprofit organization founded to operate the incubator contracted with the Mid-Iowa Small Business Development Center for management services. Joining the city and SBDC as partners in the incubator were Prairie Meadows Racetrack and Casino, the West Des Moines Chamber of Commerce and Development Connection, and West Bank.

Iowa Network Services recently came on as a partner, installing faster internet bandwidth in the incubator and offering tenants free access. That helps the incubator target fast-growing technology companies like Appcore.

“This is not a flash-in-the-pan experiment,” Shafer said. “There’s buy-in from the entire community to build an entrepreneurial ecosystem.”

Shafer said the incubator is “not just a landlord-tenant relationship.”

“Technical business assistance from the SBDC is key, because 24/7 they’re getting help for everything on the spot,” she said.

Synergies also develop among the entrepreneurs whose businesses are sheltered in the incubator. “They’re helping each other, referring clients and customers, sharing their own unique experiences getting venture capital and angel investors,” Shafer said.