Japan’s Return Path to Innovation – Tim Rowe – CIC

There are no shortage of startup accelerators, innovation spaces and startup community hubs, and sometimes it can be difficult to put your finger on what makes one a success and another a failure.

Today, Tim Rowe the CEO of the Cambridge Innovation Center walks us through what he believes will make or break a startup community.

The CIC started as a small co-working space for a handful of startups, and now is the biggest facility of its kind on the world. They’ve expanded to several locations and are now int he process of setting up their Tokyo facility.

Tim lived in Japan for a few years in the 1990’s and he understands that Japan is different, and that’s a good thing.

It’s an interesting interview and I think you’ll enjoy it.

Show Notes for Startups

What makes one startup space succeed and others fail When you need to turn down the money to support the mission How NGOs and governments can sponsor innovation A blueprint for a successful innovation space What approaches to innovation might be particularly effective in Japan What three things all innovation communities need to succeed What Japanese universities can do to foster innovation

Links from the Founder

The Cambridge Innovation Center Follow Tim on twitter @rowe WCVB-TV's video on Kendall Square and CIC

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Transcript from Japan Welcome to Disrupting Japan- straight talk from the CEO’s breaking into Japan.

You know, I’ve always been a bit skeptical about co-working spaces, innovation centers, and startup community hubs. Some of them are well intended, but too often, the organizations that put these facilities together have a bit of a field of dreams mindset, where, if they just build the office space, the innovative entrepreneurs will come, and then the organizers will find themselves at the center of a thriving ecosystem.

Sometimes that actually happens, but usually not. But when it works, when all the pieces really do come together, amazing things happen. And a community develops that is far greater than the sum of its parts. So what’s the real difference between the innovation spaces that flourish compared to those that stagnate?

Well, today we get a chance to sit down and talk to Tim Rowe, CEO of Cambridge Innovation Center, or CIC, the largest innovation center in the world. And we have a conversation about what’s really involved in building an entrepreneurial community, and the CIC's progress on building a very large-scale innovation center right here in Tokyo.

It’s a truly insightful conversation, so let’s hear from our sponsors and get right to our interview. [pro_ad_display_adzone id="1411" info_text="Sponsored by" font_color="grey" ]

[Interview] Romero: So I’m sitting here with Tim Rowe, CEO of the Cambridge Innovation Center. This is a pretty incredible space that you have been running for 15 years now. So rather than having me explain it, can you tell us a bit about what CIC is and how it came to be?

Rowe: Sure. CIC is the world’s largest space for startups, that is our Cambridge Space, specifically. We’re also in Boston, Miami, St. Louis, Rotterdam Netherlands, at the moment and we’ve got some more in the works. We call ourselves a community of startups. So we’re not an accelerator where we’re telling people how to build their business or investing in them. We have brought 15 venture capital funds into our location in Cambridge and some of our other locations, so there is access to money, but it’s more of an open platform.

Romero: So the VCs actually have offices there?

Rowe: Their entire firm is there.

Romero: In terms of business, though, it’s a real estate business. You’re renting office space. You don’t make money by making investments or…

Rowe: Yea. So we don’t think about it that way. You could argue that a university is mostly made up of real estate, but that’s not its purpose. It makes it’s money by charging people to live there and go to classes, but, it’s in the same way our mission is to make the world better through innovation. The space that we curate is like a little city of innovation. Yes, people have to pay to use space in that city. A lot of things we do are free and open to the public. A lot of things we do are non-profit. Our wet laboratories and our robotics laboratories are actually non-profits. So we’re a mission driven business that happens to use real estate as a means of getting innovators together.

Romero: Let’s dig down on that, because, certainly over the last ten years or so, there has been an explosion of co-working spaces and non-financial accelerators, that are frankly, often run by real estate businesses. You have got over 500 companies in this space now.

Rowe: Over 1400 companies in total now. In several different buildings.

Romero: I guess I’m saying, what are you doing different? What do companies see in the Cambridge innovation Center that they don’t see in these dozens of other accelerators?

Rowe: So there’s a lot of ways to answer that. First of all, there is a spectrum between mission-driven and money-driven spaces just as there is a spectrum between, on the one hand you have something like a university, on the other hand you have something like a hotel. They both have space, places people sleep, but they have different purposes for that. Even within the hotel business, you have everything from sort of non-profit youth hostels up to premium four seasons kind of experiences. This world is growing, obviously, quickly. There are a lot of different models that people are presenting to the world. Just as in those other industries, you have everything from community college to MIT. Even in universities there is a wide range. That range will continue. I think, where we sit, is just our own little space. We are a warm, mission-driven community of serious entrepreneurs trying to change the world. We do it at a scale that nobody else does. So we’re more city like than a space. We call ourselves an innovation campus. When you visit one, you’ll feel more like you’re at a university and the scale of that than that you’re in somebody’s shared space.

Romero: Just to contrast the mission driven approach to the real-estate or landlord driven approach. Can you think of a time where you made a decision a certain way because you were mission driven rather than…

Rowe: A good example is wet laboratories. The people in Boston were telling us, you guys really need to have the wet laboratory infrastructure that we need to build our companies. We said, sure. We did the math, and we found that it loses money. But we could not make that math work for a number of reasons.

Romero: So wet labs are for life sciences?

Rowe: Wet labs are for wet life sciences. So you have everything from petri dishes to electron microscopes and DNA sequencing devices. And those things cost tens of millions of dollars. And startups aren’t necessarily able to pay for them. Although they need them, they just don’t have the kind of capital that would support it. So we looked at that and said, this is still needed. So we went and turned it into a non-profit. We have worked on this for years. We built it. It’s very successful. Haven’t made a dime on it.

Romero: Did the non-profits have corporate sponsors? Or are they just structured as a non-profit…

Rowe: No typically governmental sponsors. We also have some corporate sponsors, but for the most part, these initiatives are underwritten by the public sector as an economic development initiative. So we try to think, what do innovators need? What should the world look like? Then we figure out the way to make that happen, regardless of whether that makes us money or doesn’t make us money.

Romero: I’ve noticed that the community doesn’t usually happen for co-working spaces. This is something that has interested me, when we were speaking earlier today, you mentioned the importance of proximity. What is it that you think is missing from most co-working spaces or what do you think that they could do better to increase collaboration or to build that community around them.

Rowe: I’m sorry about the space that you’re referring to that don’t have much community. I think good shared spaces always have community, so it may be that those places need to make their mistakes and learn how to build their community. Certainly, it’s taken us a long time for us to figure that out. It’s not easy. There are a number of factors that go into building any strong community. You need a shared purpose. You need to have ground rules for behavior and respect. You need to have leadership, so you can’t just say here you are. Somebody needs to say, this is where we’re going. You need to have access to the right kinds of ongoing nurturing resources. Whether it’s more bright people, more startups, more technologies and so forth. You need to feed them. You need to feed them economically with investment so they grow. You need to take all those things that you would think about to what makes a healthy city and apply that to one of these. You’d find the same kinds of answers.

Romero: It sounds like it’s very much not a passive endeavor. It’s not a matter of just getting the right components in the same place. It’s a lot of hands on, active management to create that.

Rowe: Yea. A friend of mine is a city counselor in the City of Cambridge. And I think a lot of the things that he focuses on and that we focus on are very similar.

Romero: Excellent. Let’s talk about your plans for Japan, and CIC in Japan. It’s actually astounding how far Japan has come in the last 15 years in terms of being startup friendly. So when I started my first company here, it was next to impossible to rent an office. Landlords would require twelve-months of security deposit, personal guarantees on leases.