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Forum Showcases Synergy Business & Technology Center, Santa Barbara’s Newest Incubator

By Alex Kacik, Noozhawk Business Writer | @NoozhawkBiz | Published on 03.22.2012

The facility, which can host about 30 small companies, is designed to provide flexible and functional office space for startups.

The MIT Enterprise Forum Central Coast showcased on Wednesday night Santa Barbara’s new business incubator, the Synergy Business & Technology Center at 1 N. Calle Cesar Chavez.

Attendants got a sneak peek of the transformed lemon-packaging warehouse that now will host about 30 small businesses, according to Synergy founder and JM Holliday Associates principal architect Michael Holliday.

“Our focus is really on the smaller startup companies that are getting going, that’s really where the need is,” he said. “We wanted to create a unique, flexible and functional office space for those type of people who don’t have the capacity to rent thousands of square feet.”

Some of that need stemmed from cloud computing company RightScale’s takeover last year of the 26,000-square-foot Santa Barbara Business & Technology Center at 402 E. Gutierrez St. The tech center’s 50 tenants were given 30 days to leave, according to officials of SIMA Management Corp., which operates the building.

“This will be another step toward filling that. We think there is a tremendous opportunity to promote the entrepreneurial spirit in Santa Barbara,” said Holliday, adding that Synergy will officially open next month.

The MIT Forum featured keynote speaker Klaus Schauser, who helped develop a Web-based marketplace for technical support services that eventually became Citrix Online. Schauser is also the CEO and president of AppFolio, which creates complete and intuitive business solutions for multiple vertical markets. Both companies started in incubators.

“From my perspective, the biggest benefit is the flexibility and time to market,” Schauser said. “Jeff Bezos, the CEO of Amazon, always said we do all the heavy lifting so you don’t have to. To me, incubators are the same thing.”

According to the Small Business Administration, 87 percent of incubator graduates are still in business after five years, said Susan Block of Block, Bowman & Associates LLC.

There are differences between an incubator, an accelerator and co-workspaces. An accelerator differs from an incubator through its screening process, mentorship, rigid timetable, direct funding and an equity stake, Block said. A co-workspace does not have the formal support in place.

She said incubators often feature flexible leases and space and strengthen the surrounding community.

“They offer some of the soft skills and intangibles such as the collaboration,” she said. “Suddenly you are in with a bunch of like minds and can get help and collaborate. Some also give you direct capital.”

Angel investor Steve Reich brought attention to the supply of companies hitting the market versus the decreasing investor pool.

“I think it’s a wonderful opportunity for investors because you will have a very large and visible pool of companies to invest in,” Reich said.

Next month’s MIT Enterprise Forum, titled “These Companies Rock! Music+Tech+Entrepreneurship=Success,” will be held April 18 at the Cabrillo Pavilion Arts Center, 1118 E. Cabrillo Blvd.

— Noozhawk business writer Alex Kacik can be reached at Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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