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Perhaps it's time for a seed fund incubator in Hawaii?

This latest TechCrunch post, "LaunchBox Unleashes Its First Nine Startups" really got me thinking of whether we could do something like this in Hawaii.

Ever since I met Paul Graham back in 2004 when I presented at MIT's Spam Conference (fast forward 21 minutes to see me make a presentation in record cold temperatures wearing so much clothing I looked as chunky as Santa Claus) I followed his Y-Combinator project very closely with great interest, always pondering its applicability to Hawaii.

A seed fund incubator basically is designed to give a couple of geeks a summer's worth of room & board money to belt out a beta version of a web company. In exchange, the incubator gets a small percentage of the company and the right to invest in future rounds.

This is something that just might work here. We could style the incubation process after the business plan competition (which also gives a sizable prize for the winner) and then perhaps as a community, agree to provide some of our expertise to help the startup succeed.

Is this something worth pursuing? I haven't spoken to Paul since '04 but I'm certain he'd at least return my email and perhaps give us some pointers of how to do something like that here in Hawaii (I thought about asking him to perhaps partner with us but he told me he really hates flying).

What do you all think?

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Comment by Keith Powers on September 27, 2009 at 9:19pm
Great string here. Very interested in this topic. YC models have been popping up all over the country. I have some ideas... but... I need to listen and learn more about environment in HI before assuming anything. Thank you to those of you that have already contacted me directly. Very welcoming community. Thx!
Comment by Russel Cheng ラッセル チェン on September 23, 2009 at 11:04pm
I've asked my mentor in Tokyo about his opinion of starting a small fund to incubate companies in HI. I want his advise before going further.
Comment by Peter Kay on September 23, 2009 at 10:07pm
Excellent Doug,

Thanks for logging that interest. This hasn't caught on but if it does we know where to find you!
Comment by Doug Nelson on September 23, 2009 at 8:02pm
Hi Peter. I can certainly contribute ideas (though virtually, since I'm on Maui). I'm an entrepreneur running a distributed company who (occasionally) thinks "it'd be fun to go into an office today and talk with other people about how they're solving these challenges." So the incubator idea has some attraction (though for our situation, a co-working space is probably more appropriate at this point).

And since I'm an educator at heart, mentoring young entrepreneurs and helping them through rough spots is appealing as well. I've done some of that in the business plan classes I've taught, and with friends who are starting up software companies.

Anyway... if you guys decide to take it to the next step I'd be interested in keeping in touch with the idea.
Comment by Peter Kay on September 3, 2009 at 10:43pm
Thanks Doug for the birthday reminder. Glad you're following up here and let us know if you can contribute.
Comment by Peter Kay on September 3, 2009 at 10:43pm
Alex, while I can't say how YC would fare in Hawaii, they do have a very successful track record. When I try a new recipe, I typically follow it to the letter and only after I have it down cold do I attempt to improve on it.

I'd probably do the same of YC here: follow their model as closely as possible, of course making adjustments specific to our "climate" and after it starts working make adjustments.
Comment by Russel Cheng ラッセル チェン on September 3, 2009 at 9:57pm
Peter and I got together and discussed directions. However, some other priority came up and we agreed to put this Y combinator idea on the side for a while. We have not spoken about it since.

What do you have in mind?
Comment by Russel Cheng ラッセル チェン on September 3, 2009 at 9:55pm
The value of an incubator should really be the help it provides an entrepreneur in terms of mentoring, introductions to customers, partners and investors. Entrepreneurs should focus on their prototype and selling to their first customer.
Comment by Alex Salkever on September 3, 2009 at 7:59pm
Y Combinator is both the right and the wrong model. Giving up 5% of a company for $5k strikes me as being way too much for so little money. I think that giving a stake might not even be necessary. What would be more useful would be an incubator space that would supply suport services free of charge and create a geolocation nexus for this sort of activity. I think the service providers here are very happy to help startups (in anticipation of them becoming bigger down the road). The type of cross pollination really starts to happen when people work in close quarters and have opportunities to interact randomly. While MIC is excellent in its modular approach to office leases and provides some great support services, the fact is, the architecture of the place is not conducive to constant interaction that would create better cross pollination. Also, certain types of service providers are not represented at all. Any thoughts?
Comment by Doug Nelson on September 3, 2009 at 6:47pm
Since it's the one year anniversary of the last posting in this thread... did you guys

a) get together
b) put a plan in place
c) make something happen

?

I'd be interested to hear what happened with this.

-- Doug

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