Scott Technology Center Targets Technical, High-Growth Potential, Business Ideas

Some business ideas are more than just successful – they change the way we do things. The digital camera changed how we take pictures; the iPod changed how we listen to music. If your business idea is innovative with a large potential market, and especially if it’s a “game-changer,” the Scott Technology Center in Omaha may be able to help you. The technology center aims to help launch such concepts into the marketplace.

The Scott Technology Center’s incubator program targets cutting-edge, high-risk technology or engineering projects with promising economic outcomes and possibility for high growth. A targeted project’s potential market size might be more than $100 million, said Ken Moreano, the technology center’s executive director.

“There are companies that we’ve seen that are in the $20 (million) to $30 million type-market. And that would be nice to see something like that be successful; we’re not trying to dismiss that,” Moreano said. However, a company has room to develop and grow into a large market size like $100 million to $300 million, he said.

Commercializing these high-revenue potential projects can benefit the community with new wealth, interesting and innovative local jobs and home-grown technology companies, he said.

The Scott Technology Center helps incubate a promising technical idea from the research and development stage into an actual business or a young company into a more developed company. According to the technology center’s Web site, its mission is “To develop and facilitate the commercialization of emerging technologies while adding value to partnerships with industry, government and academia.”

The Suzanne and Walter Scott Foundation, a public, not-for-profit foundation, opened the Scott Technology Center about eight years ago near the Peter Kiewit Institute (PKI) south of the main University of Nebraska at Omaha campus. PKI, a partner of the Scott Technology Center, is a high-technology learning and research institute that educates University of Nebraska at Omaha information science and technology students and University of Nebraska-Lincoln engineering students.

The Scott Technology Center looks for those companies that can most benefit from its relationships with PKI, other academic institutions including Creighton University and the University of Nebraska Medical Center and technology and engineering firms, Moreano said. The technology center’s contacts include experienced entrepreneurs, CEOs, experts in research and development, angel investors and venture capitalists.

Providing contacts is one way the Scott Technology Center’s evolving incubator program might help a company, Moreano said. The technology center might find business leaders willing to lend expertise, match up businesses that could benefit from a strategic relationship, or introduce PKI student talent to a business needing technical employees.

In addition to mentoring and professional networking and collaboration opportunities, participants selected after an admissions process can get help in areas like commercializing the business, identifying possible funding, marketing and staffing.

“We’re a neutral entity. We get to know people’s businesses probably a little bit more intimately than … the general public or a competitor or somebody that’s maybe a paid consultant-type structure. Not that there’s anything wrong with that, but … again, we’re neutral. So we have a little bit more insight, I think. And we help connect people,” Moreano said. “It varies based on each company we work with.”

The application-review process includes an analysis of the technology, degree of innovation, background of the innovator or management team and the business model. The Scott Technology Center then begins discussions with likely candidates to determine if they are a good fit for the help the center can offer.

Incubator participants can either locate on the Scott Technology Center campus or participate virtually. Virtual participants in the incubator program receive business assistance while working at another location, which might be at another office space or in their garage or basement. On-campus participants receive additional benefits, including a subsidized office space, conference rooms, IP telephony, bandwidth, utilities and parking. In addition, participants can house servers and infrastructure equipment at a subsidized price in the Scott Data Center.

Businesses accepted to the incubator program, either virtual or on-campus, work out an equity agreement with the technology center, Moreano said. Historically, he said, the equity has been 1 to 3 percent in the form of a convertible option. If the company is successful and there is a liquidity event, the value of the option goes into the technology center’s “kitty” to help the incubator program assist other startups and young companies.

“But it’s mutually agreed upon. We’re not heavy-handed when we negotiate that.”

The Scott Technology Center’s motivation is to help a company be successful, Moreano said. One such success story, he said, is Proxibid, a provider of live webcast auctions.

“They’ve done quite well,” Moreano said. “They’ve got great leadership, they have really grown their business and they’ve really developed their market and their strategy.”

Moreano said the Scott Technology Center differs from other business incubators in how it is administered. He said most incubators around the country were developed by real estate companies working closely with institutions of higher education or grew directly out of a university research center. The Scott Technology Center is neither model, he said. Instead the center is under a nonprofit foundation.

The technology center’s governance is more streamlined than other similar incubators, which can result in faster decision making, he said. “There’s not a long list of people I have to go to to get approvals to move on projects,” he said. “‘Yes’ and ‘No’ comes rather quickly,” Moreano said.

The technology center’s Nebraska location also sets it apart from other incubators, he said. “The access to leadership is tremendous here,” Moreano said. The technology center can typically reach lead decision makers at both large and small firms and business groups in the community to get assistance with activities like advising, setting up a pilot or prototype and collaborating, he said.

“It’s typically a warm welcome in that conversation,” he said.

Moreano said the Scott Technology Center hopes to be a catalyst for development of an early-stage targeted fund that could be active as early as the second quarter of 2010. The fund would be active in equity investments in early-stage technology companies, he said. While the aim is to focus the fund on Nebraska, he said, it would not be limited to Nebraska investments.