Great ideas can be born anywhere, but they come to Greater Palm Springs to thrive. Only two years after opening its doors to 14,000 square feet of business incubator space, the Coachella Valley Innovation Hub (CViHub) has added a 45,000-square-foot Accelerator Campus and graduated its first class of entrepreneurs, with more in the pipeline.
The iHub model for business incubation — rooted in the triple bottom line theory of people, planet, and profit — “breaks down barriers to entry,” says Wesley Ahlgren, chief operating officer of the Coachella Valley Economic Partnership, which the cities of Palm Springs, Desert Hot Springs, and Cathedral City engaged for the program.
“We view the iHub/Accelerator Campus concept as the new economic growth model for the state. It’s focused on jobs,” says Tom Flavin, CVEP president and CEO.
The iHub helps grow businesses from idea to execution in three critical growth areas: healthcare and life sciences; clean technology and energy; and creative arts, media, and design, with the goals of employment and sustainability. Services on a sliding fee scale include business training, technical assistance, and financing advice for onsite and virtual clients. CVEP partners its iHub support network and Workforce Excellence pipeline programs to train workers through local sector-specific programs that begin in secondary school.
“Six of the [current] 17 iHub companies come from other states or regions, so we’re attracting interest from outside,” Flavin explains. “California is a good place to start and grow a business. We have talent, access to capital, and huge market opportunities. There are
24 million consumers within a two-hour drive of the facility.”
CVEP projects that by 2016, the iHub will graduate 50 companies with $1.1 billion in valuation. The companies will have created 2,600 jobs and generated $200 million in annual revenues since their birth. Beginning in 2016, CVEP hopes to add iHub Accelerator Campuses throughout Greater Palm Springs.
When choosing which companies qualify for the iHub, Managing Director Joe Wallace says the decision is based on various factors. “A good idea isn’t enough; we’re looking for the entrepreneur who not only has an idea, but also a background to attract talent to help with that idea once it’s proven, and who is going to be able to be funded by angels or venture capitalists or banks,” he explains.
Once the idea and business model have been proven, companies transition to the Accelerator Campus, a cluster of seven buildings on 3.5 acres in a foreign trade zone at Palm Springs International Airport. The time frame from startup to profit is about three years, Wallace says.
“At the Accelerator, the concentration is on operation, supply-chain management, building things, pricing, and making a profit,” he continues. “When [companies] are big enough that they need to exit the Accelerator Campus, they should have those skills mastered, so that when they go out into the commercial world, they have the tools to make that business everything it can be, whether it’s 50 people or 50,000 people.”
Much of the iHub’s success, Flavin says, is rooted in deep support from partner cities and private enterprise. Rabobank was early on board, supporting the original iHub building. Wells Fargo recently awarded a $100,000 clean technology grant, and another $10,000 came from Walmart.
The Accelerator Campus’s Phase 2 received a huge boost with a three-year, $500,000 grant from Desert Healthcare District for a Health & Medical Innovation Center, with another $1 million from the City of Palm Springs’ Measure J to help further attract medical technology firms.
The Greater Palm Springs area, Flavin says, “still has a sense of community and purpose, which means big things can get done. You don’t find that in the metro areas.”
BY THE NUMBERS
CVEP Return on Investment, July 2011 to June 2013
Company client cases opened – 425
Companies adding/retaining jobs – 126
Total new direct jobs – 2,191
Total retained direct jobs – 756
Total indirect jobs – 1,936
Total direct, indirect, and retained jobs – 5,260
Regional economic impact – $1,308,622,000
Total client funding – $13,927,000
HELPING SMALL BUSINESSES FIND LENDERS
The Coachella Valley Economic Partnership’s new Small Business Lending Center focuses on helping innovators, entrepreneurs, and small business owners gain “a focused access to capital strategy,” says CEO Wesley Ahlgren.
The lending center works in tandem with the Economic Partnership’s Small Business Development Center, which helps more than 300 clients across the valley, ranging from startups to mid-size companies (30 employees or more), to expand the network of local, Los Angeles, and San Diego lenders who will underwrite and place small business loans for local businesses.
For more information, please visit cvsbdc.com
MEET THE FIRST IHUB GRADUATES
• Sactec Solar Inc.: Designs mobile, containerized, transportable alternative energy solutions, such as solar array, wind turbine, inverters, converters, battery power, and backup generators. sactecsolar.com
• Solaris (formerly NRG Power Cells): Manufactures renewable energy storage solutions.
•Attune RTD’s Briowave: Briowave is used by Attune to manage energy consumption with its first commercial application in pool filtration. attunertd.com
• EV Enterprises: Manufactures the Canary 100 Radiation Detector and automotive battery charging stations; converts internal combustion vehicles to electric cars. electricvehicleenterprises.com
• PSTalent.com: Virtual production and animation company that operates inside the Sony PlayStation home network, with license agreements to develop entertainment platforms. pstalent.com