Poaching for Profit
My advice? Don’t poach others’ clients
by Mark Long, director of incubation services at the University of Florida
When I say the word poacher, you likely conjure up thoughts of someone, usually with a large gun, who is roaming the wilds of Africa searching for a big game animal (usually one that’s near extinction). They’re hoping to “bag one” to sell body parts or skins or organs on the “black market” and make a large profit, to the detriment of society (with the potential loss of a species). They may use illegal bait to entice the animal into committing a fatal error by coming directly to the poacher, which provides an easy shot.
This makes for a good mental picture, but actual poaching is occurring right now, in my back yard.
In our industry of business incubation, “poaching” clients is a despicable practice, and the more moral among us adhere to an unwritten code that simply says, “Don’t do it.” Period. Recruit your own clients on your own merits; don’t simply try to “steal” them from someone else.
Unfortunately, the toils and thrills of economic development drive some programs to attempt to fill their ecosystem with companies from other ecosystems. We’ll detail the way it’s done in this blog, but first, let’s look at the effects of the practice itself.
For states (in particular), most of the time it’s a zero sum game: You are simply moving the chess pieces around the same board. For example, the XYZ company in Incubator A (located in City A) is approached by economic development folks from City B (where Incubator B is located). City B promises the CEO of the XYZ company lower costs, better programs and — in many cases — tax incentives and investment monies.
The City B economic development group may even (gasp! the horror!) make promises they cannot guarantee: the promise of cheap space, tax incentive programs, assistance with workforce sourcing, low-cost housing, and, of course, the joy of being in a “special entrepreneurial district/city/square/park,” etc., among “like-minded entrepreneurs to encourage extensive collaborations and networking.”
Spaces are described in glowing details, such as “amazing co-working buildings with collaborative and creative collision spaces” (I love to say these things three times real fast); “business accelerators” that not only provide everything you’ll ever need, but they provide it faster/better, and they practically GIVE you money; and of course, incubators that are “state-of-the-art.” (Which art, exactly? Whose art?)
So, is this “wrong”? Is it unfair? Is it illegal? No, no and no. It’s certainly legal, and it’s certainly fair game in the economic development world. The only thing “wrong” about it might be the ridiculous expenditures of funds, loss of productive time and the hard feelings it creates.
And for what? As mentioned, the state gets no net gain in this effort (assuming Cities A & B are in the same state), and many studies show that companies that are enticed to move strictly for economic development incentives (i.e. tax breaks, workforce grants, cash, investment, etc.) seldom “stay put,” and seldom meet their targeted promises (X number of new high-tech, high-paying jobs in R amount of time). Thus goes the game, not exactly a winner’s market.
To quote Shakespeare (Henry V) and the famous “Once more into the breach, dear friends…” speech, “the game’s afoot!” Some communities are so desperate to promote economic development that they will promise anything and everything to relocate companies. However, most communities appreciate the concept of “growing their own,” promoting entrepreneurism on a local level (as most of those companies are less likely to relocate once they reach a critical size).
Certainly, some communities are more advantageous than others; in fact, in my career, I’ve sent companies to other incubators in other municipalities because it was a better fit for the company. In one instance, I ran a biomedical incubator; the startup was an aerospace company. Later, an engineering incubator sent me a pharmaceutical startup because my incubator was a better fit to help the company.
The moral of the story? We’re all in this together. It does no good to set up a situation of animosity, hard feelings and rude competition. It helps to work together to build the best possible state, regional and national ecosystem we can possibly build. If a local company is better off in your ecosystem, and you can help them flourish and grow — awesome! If there’s no advantage, what are you doing? Are you helping the startup species — or just poaching?
Originally published at incubatorblogger.wordpress.com on September 26, 2018.
Mark Long has long experienced the intricacies of business incubation, acceleration, coworking spaces, makerspaces and other entrepreneurial assistance venues around the world. He shares his experience, outlook, background knowledge, studies, and observations in regular posts at the IncubatorBlogger. Feel free to follow him there — or follow him and UF Innovate right here.
University of Florida Innovate supports an innovation ecosystem that moves research discoveries from the laboratory to the market, fostering a resilient economy and making the world a better place. Based at one of the nation’s leading research institutions, UF Innovate comprises four organizations: Tech Licensing, Ventures, The Hub, and Sid Martin Biotech. Within the UF Office of Research, the four organizations form a comprehensive system to take technologies from the lab to the public, bringing together the five critical elements in the “innovation ecosystem”: facilities, capital, management talent, intellectual property and technology-transfer expertise.