Q&A with Grand Central Tech: How an innovative accelerator is providing NYC startups with work space for no rent or equity stake
It sounds almost be too good to be true, doesn’t it? Entrepreneurs get the room and resources required to build their business in the heart of the Big Apple — without paying rent for a full year. We could barely believe it ourselves. So we had a chat with Grand Central Tech co-founders Charlie Bonello and Matt Harrigan to find out how they made this fantastic idea a reality.
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The work space at Grand Central Tech.[/caption]
BREAKOUT LABS: What motivated the formation of Grand Central Tech?
GRAND CENTRAL TECH: For the tech sector to yield the benefits for the broader economy we all know it can, models need to be put forth that facilitate access for the full range of potential beneficiaries, not just a narrow subset. We founded Grand Central Tech because we felt we had an innovative model for an accelerator that could yield tremendous value both for the startups within it, and for the community that surrounds it. And we felt that there weren’t any great instances in the tech space of organizations who had that dual mission.
Of course our ability to positively influence the broader community is reliant, in large part, on our ability to attract New York’s premier startups to our program. We’re delighted that our first class demonstrates diversity statistics that stand in stark contrast to the woeful standards seen throughout the tech scene: 40% of our founders are female, a third are under-represented minorities and/or veterans. Furthermore, we ask this community to commit to engaging in good corporate citizenship by engaging in our internship program which services young people (17–20) from across the socioeconomic spectrum.
BOL: What are some of the advantages you have over traditional accelerators?
GCT: We think the advantages of $0 rent, 0% equity for a full year for all participant companies is a pretty good place to start, but the advantages extend far beyond that. We’ve also assembled an absolutely top-notch bench of Strategic Advisors, Corporate Partners, and Growth Partners all well-equipped to expedite access to talent, customers, and investment on behalf of all of our companies.
BOL: You offer your members a pretty incredible range of benefits — free office space, access to accounting services, interns, recruiters and investors — yet you take no equity. How do you make it work?
GCT: By dropping the equity requirement while still providing an overabundance of top-flight resources to help our companies succeed, we’re able to attract the absolute best startups in NYC. By providing space in our building for them to grow into, we’re providing clarity to the typically stressful question of real estate needs as they relate to variable and unknowable company growth rates. The net result? We are creating a single point of density of premier startups that compounds annually to the benefit of our companies, and, in turn, to the benefit of Grand Central Tech. We “make it work” in large part thanks to our partnership with the Milstein family which owns and operates the building that Grand Central Tech operates out of. They have extended the space to us rent-free, and, in turn, we extend that same opportunity to our companies.
BOL: Who were biggest success stories from your 2014 class?
GCT: 100% of our companies are not only thriving, but committed to staying within the building, and within the community after this year. They are hiring people, growing revenue, attracting new investors, and altogether thriving. We couldn’t be more proud and we certainly couldn’t pick a single biggest success story from the pack.
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Matt Harrigan, Charlie Bonello and The Grand Central Tech team[/caption]
BOL: What were the most significant developments at GCT over the past year?
GCT: The big news of the year was signing on our corporate partners: L’Oreal, Pepsi, Google, Goldman Sachs, Microsoft, IBM, Intuit, and JPMorganChase. We’re thrilled to contribute to the continued growth of the New York tech ecosystem with them at our side.
BOL: How do you evaluate potential community members? What do you look for in these applicants?
GCT: We’re looking for big ideas, for companies who are taking on big, important, and lucrative challenges. That said, we evaluate companies based on 5 key criteria. 1) The team. How long they’ve known each other, whether they’ve worked together before, etc. 2) The quality of the engineering talent on the team. We want to make sure the team can build their vision and has the skills to pivot if necessary. 3) The importance and the scope of the idea. Does the idea matter? Are they attacking a big market with a novel “way in”? 4) The traction. Is the idea/business in the market? If so, is it generating users and/or revenue? If not, what’s the path to market? How likely is it? 5) The community fit. Does the business buy into the broader GCT mission to address issues of diversity and inclusivity in the tech ecosystem?
BOL: What are your plans for the future?
GCT: To get better and better at what we do. But to break that down a bit, two key areas of focus are: 1) Expanding our outreach efforts on our key social initiatives. Right now we run a summer internship program for NYC youth from across the socioeconomic spectrum. We’d like to expand this program to serve more students year-round. We’d like to add even further emphasis and rigor to our diversity in tech efforts. 2) Adding efficiency to the “innovation market”. NYC’s competitive advantage compared with other startup ecosystems is the density of top-tier global corporations that call the city home. We want to draw more and more connective tissue between startups and the corporate world to the mutual benefit of both, and the employees within them.
To learn more about what GCT has to offer, check out GrandCentralTech.com.
To learn how Breakout Labs is helping entrepreneurs take their breakthroughs out of the lab and into the economy, click here.
