Could the next PayPal or Twitter originate from Buffalo? That was the underlying question posed at the Buffalo Niagara Sales & Marketing Executives’ monthly dinner program at the Millennium Hotel adjacent to the Walden Galleria Mall featured the new Z80 incubator lab’s managing director and CPI (Chief Principal Innovationist) Dan Magnuszewski as the keynote speaker. His presentation was titled “Transforming WNY into the Silicon Snowbelt” and it drew nearly 100 association members and guests, including about 20 local college students majoring in marketing. Earlier in the day, the students participated in a shadow program at the SKM agency.
Magnuszewski spoke for 45 minutes and outlined the mission of Z80 labs, which opened in July in first-floor office space at The Buffalo News headquarters in the heart of downtown and is named for an old computer microprocessor from the ’80s heydays of the firm’s co-founders. As he noted, Z80 has entered – or rather, created – a new space as the only software and mobile application incubator in Buffalo.
Armed with a $5 million dollar grant from the Empire State Development’s Innovate New York Grant funneled down from the federal government, Z80 labs is on a quest to help fund 50 fledgling companies with up to $100,000 each over the next four years.
In just three months since plugging in their laptops, the incubator/accelerator (more on this below) has welcomed six new startup firms into its headquarters with more room to grow. Their primary target audience is software creation firms that create new products rather than services. He cited a statistic that startups create three million jobs annually while older corporations shed one million jobs each year.
Did you know that there are 65 universities within a 100-mile radius of Buffalo? As Z80’s primary pitchman, Magnuszewski emphasized the need for Western New York’s various sectors – government, academia and technology companies – to break down silos and collaborate more to keep technology surging throughout the region. He wasn’t just pitching potential incubator clients to take up residence at Z80, but projected great enthusiasm for the industry and espoused the greater regional objective of fostering technology advancement and economic growth for Western New York while trying to retain top talent from the traditional exodus out of Buffalo for greener careers in Silicon Valley and New York City.
He also addressed the oft-dreaded stigma of the “incubator” moniker in the industry and illustrated recent successes with “accelerator programs” as another avenue for startups to develop and launch rapidly. The Z80 Labs business model is rooted in mentorship, reciprocation and access to industry experts, sponsors and investors. In addition to providing office space, utilities and other core business amenities, the firm organizes weekly educational programs and speaker series similar to Gangplank based in Chandler, Arizona.
Benefits of Entering into Incubation:
- Centralized location and logistical support
- Focus on software development
- Guidance through the critical mass steps of business launch
- Access to industry experts and prospective investors
Primary Startup Struggles:
- Building the right team
- Two to four people often have to wear many hats
- Cash flow
- Does the concept address a real problem and create a needed solution?
- Is it a scalable model?
- Will there be cost-efficient customer acquisition and CRM support tools?
- Lack marketing and business acumen
Criteria for start-ups to partner with Z80 Labs:
- Residence in their incubator office
- Five percent equity stake granted to Z80 Labs
- Transition out to own office space after one year or 10 employees, whichever comes first.
The key themes in the startup world and accompanying incubator forum is to foster innovation and collaboration while dispensing support, logistics and resources to afford entrepreneurs and their development staff the ultimate convenience of focusing on their core software development and program/product design competencies to initiate their business model.
Z80 labs wants to see firms progress from idea to product offering within three months. When companies reach their term limit or capacity for 10 employees, it is generally time for them to leave the nest and transition to full-funded, operational independency.
Local entrepreneurs can take a shot at attaining startup status from concept to prototype to pitching and prospective funding by registering for the Buffalo Startup Weekend at Medaille College Nov. 16-18.