Ask HN: Tell me why a room-and-board-and-bandwidth incubator is a stupid idea | Hacker News Reader

Ask HN: Tell me why a room-and-board-and-bandwidth incubator is a stupid idea

83 pointsVivtek81 comments

So a little while back, I bought a big old brick house in Richmond, Indiana (for $8000). (cf. http://big-old-house.blogspot.com for the blow-by-blow). It's really a whole hell of a lot more room than I need, and - the kicker - it's not alone. There are a boatload of beautiful old brick buildings here, just no economic reason for anybody sane to buy them. There's even a 23-unit building of single-bedroom apartments two or three blocks away from me, standing empty. Lots of these houses are standing empty; there's just nobody left to live in them.

So I had this stupid idea, and I'm not even sure it's a stupid idea: why not sponsor young (or non-young) entrepreneurs by giving them rooms or small apartments, server space, good bandwidth, and home-cooked but free food? In return, perhaps a percentage take of whatever they came up with during a certain fellowship period, or whatever other venture capitalists take as their cut. Later in the game, actual capital would be available (it's not on the table, not from me, not right now). But the idea is to build an active and close-knit, quasi-academic, community. There was definitely an era in my life when I would have jumped at such an opportunity, and I'd still seriously consider it.

So tell me: in how many ways is it stupid? I love these old buildings; given just a little economic rationale, they're eminently salvageable (people built to last in the 1880's and 90's).

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In addition to the isolation that others have cited, there's quite an opportunity for moral hazard on behalf of the entrepreneurs you accept into your house. Not only would you have to be very good at selecting capable entrepreneurs, but you would also need to structure the incentives such that the entrepreneurs met some set of goals or else they would have to pay back the investment you make in the form of rent. Otherwise, there's nothing to prevent squatters from leaching your resourses and stringing you along in the process.

Yes, there you have worry #2.

Although I don't see this as a great deal of investment. If somebody's really acting in bad faith, they'd get terminated, but if somebody gives it a go and it just doesn't work out, then at the end of their "fellowship" they just move on, no hard feelings. Or so I see it.

I believe there is another collective of designers in rural Alabama who avoids this problem by focusing on "sustainability" type projects with an emphasis on making the world a better place. http://www.projectmlab.com/

What mainly got me interested in them was their pie shop: http://www.fastcompany.com/blog/alissa-walker/designerati/pr...

One big issue is how hard it is to evict people. A normal tenant would be out as soon as they got an eviction notice... but a normal tenant also pays rent, and probably doesn't get evicted.

The type of people that don't pay rent and get themselves evicted tend to ignore eviction notices too... meaning you have to go get a court order and have the county sheriff throw them out.

You'd also have to worry about Equal Opportunity Housing laws. You could largely mitigate getting deadbeat tenants if you interviewed them all and made sure they were bright young hackers... but whether you can discriminate based on 'hackerness' is probably legally questionable... but IANAL.

I think it's a mistake to sell this as free. People don't value things that are free.

Maybe you could make the rent non-free, and then pay them (or call it a stipend/scholarship/grant) the same amount of money as the rent/broadband/food etc while they met some condition? As soon as they stopped meeting the condition they stop getting paid, and they have to pay the costs themselves or get evicted.

Well that is part of what I was trying to get at... legally it might be less of a hassle to get rid of people if they were merely guests in your house rather than tenants. Then again, IANAL... I've only heard horror stories from friends that are landlords.

Or just make the rent sufficiently cheap.

The Rust Belt needs ideas like this to stop being the Rust Belt.

If it works, maybe you should consider expanding the idea over time – make it into something that can incubate the neighborhood and the town, not just the startup. I bet if you talked to city government, they'd jump all over this.

You wouldn't be alone. I actually posted something a few months back to this effect: http://shortformblog.com/us/need-startup-funding-look-no-fur...

I like your concept. Would love to see where you take it.

(note/update: for this comment, I'm mostly considering the 23-unit building)

If not for long-term, maybe for programming camps/meetups/etc? Something similar to Big Nerd Ranch[1], or many of the other teaching sessions.

With a very low cost of room and board (and people often traveling to meetups anyway), you might be able to find people who want to host (weekend? weeklong? longer?) events at your 'hacker complex.'

And possibly have long-term residents that qualify for discounts on the camps? i.e. live at the 'hacker complex' over the summer, enjoy the hacker culture of all of the people coming in and out, and go to the events that interest you.

[1]http://www.bignerdranch.com/schedule.shtml

Or if you've actually got money, you could live here for rent and not sacrifice equity, or buy into the equity pool yourself.

There are lots of tweaks you could do on the basic model.

I've been thinking along the same lines, looking at properties that could work. Ultimately, I foresee one major problem -- their bandwidth, servers, food, electricity, water, heat, etc. will cost you hard cash, while they live rent-free, with no incentive to change the status quo.

My alternative would be to charge rent... to their investors.

I envision a group of investors to whom the tenants would apply. Investors pay rent to you on behalf of the entrepreneur(s) of their choice. As long as they keep the investors happy, they stay at your place, and you have the financial means to make it work.

I've identified multiple sites at which this plan could work, but would need an investor of my own to quit my day job, move into a site, and get it ready.

I think the problem would be the isolation. It could end up as the blind leading the blind. The advantage of most of the "accelerators" is that they're run by successful entrepreneurs, bring in more to serve as mentors and provide a network of successful entrepreneurs on top of that. Since you'd be competing with that, you'd probably only get the folks that didn't get into those places and then the most successful startups would leave to go to startup hubs.

You're right. There would have to be a financial benefit to it – we'll continue to fund you if you stay in Indiana. Perhaps you should read up on incentive programs your state offers startups.

This issue is somewhat near and dear to my heart because I've seen how bad Michigan has gotten. (Partly because of that, I live in D.C. now, and the rent certainly isn't cheap.)

I wonder if you could get funding from the state this way?

As for the blind leading the blind, how about a teleconferencing link to Boston or Silicon Valley? A company I worked for tried having a couple of webcams/projectors in a meeting room during a Friday social hour to try and link the Connecticut and Houston offices. It only went so far. But maybe if you had an entire wall of an old school "terminal room" style workroom, this could work. Have 3 connected projector/webcam sets linked on a pair of dedicated machines, with software that could quickly and rapidly change functions of the two side screens. (Add some Wiimote hackery for a cheap augmented multi-touch whiteboard, or instant desktop sharing with any machine in the room.)

Hmm, if a rig like this could be scrounged together cheaply enough, one could form a community of such virtually linked hacker-spaces as a network! Maybe use daily round robin, or random pairing. And then, why limit it to just Boston or Silicon Valley? How about Houston-Atlanta for starters?

I love the teleconf idea. And not just because I'd get to put a teleconf setup in my house.

Maybe we should get together and write up a proposal and a standards document? We need something that requires minimal financial outlay, but that can be made up for with a lot of technical skill/knowledge. (Like, with the Wiimote hacking, there would be some soldering, dremeling, and hot glue gun action involved.) A fairly hefty bandwidth requirement seems reasonable, though we would only want to take a minority of what is available. (Caroline Collective has 16mbps down and 8 up.)

Future-proofing the standard will take some thought. We would like the standard to grow as technology becomes available, but still be inclusive of older installations.

But this quickly becomes a case of optimizing for the wrong variable -- because it's already become, "How can you find a way for them to stay?" rather than, "How can you find a way for them to be successful?"

I also don't think that you hook up with mentors via teleconferencing. For whatever reason, face to face meetings matter a lot. You don't have dinner with someone via a teleconference. You don't tell stories over beer via a teleconference. There's a rigid formality -- "Why are we having this conversation?" I think mentorship rarely happens within those lines.

One of the comments above talks about the face-to-face networking opportunities. There's a reason he didn't say, "Why would I want that? I can call up people via Skype Video now..." ;-)

optimizing for the wrong variable I agree. If they stay, they'll stay. The idea is to support them, and benefit from it at the same time.

But I stand by my love for the teleconferencing setup in my house. I'm all over that. (Except, of course, that you're right.)

Well, I don't know about mentoring per se, but if you have an "always on" connection in the workspace, then you leave the situation open for serendipity. What I'm envisioning is just a "serendipity conduit" or maybe "serendipity space." The workspace can become a play-space in the evening or on the weekend. I could even envision communal dinners.

I'm not thinking about people "calling up" other people. I'm thinking of communal spaces with "magic walls."

This would be a good place to start:

http://www.in.gov/iedc/grants.htm

Damn - thanks!

That ... actually sounds pretty interesting.

Why limit it to two? Or, I suppose, if the rig were cheap, you'd just have another room that was Houston today.

I'm thinking two is a good place to start. I'm envisioning a whole network of hackerspaces. Actually, we wouldn't have to limit to hackers.

I think arts groups like The Field could also benefit from something like this.

http://www.thefield.org/

Probably not quite what you mean (focused more on tinkering than startups), but I can't not link to http://hackerspaces.org when I read "a whole network of hackerspaces".

Good idea. I'm sure that betahouse (I'm a member) in Cambridge would be up for video-linking sometimes.

I'm not sure you'd need to lock people in geographically. If you retain some equity in their venture, and it succeeds, it builds the community no matter where they end up relocating. And if there are enough people doing cool things in Richmond or Timbuctu, then a certain number of them will stay anyway.

Ultimately, enough would stay that they'd influence the local economy. Frankly, any one startup here would influence the economy. It's a small town and hasn't had serious industry since about WWII. Although when my house was built, it was one of the richest towns in this part of the country, and the architecture shows it.

They built cars here. Pianos. Louis Armstrong and Gene Autry recorded here. It was an actual place. It wouldn't take much to make it a place again.

That's the kind of spirit I like to hear.

If I was in a different spot, I would probably roll the dice on this endeavor. Alas, I actually have a career.

One other idea for you: Maybe you could hitch your wagon onto the Knight News Challenge somehow? http://www.newschallenge.org/

They just extended their deadline until December, which is plenty of time to build something. And a town like what you're describing seems like it'd be a great testbed for something like that.

It's worth you finding out why all that industry left the area in the first place, in case you fail for the same reason. Seems to me the close shop system doesn't help among other things.

http://en.wikipedia.org/wiki/Rust_Belt#History

There you're starting to touch on one of my worries, yes.

Count me in for the hacker commune.

I've seen so much work get done in similar sittings for musicians and writers.

And it'd be great to have more people who "get it" physically around you.

If you squint at it the right way, you could even call it a "university."

Reminds me of http://www.aduni.org/

There seems like there is a story why this only lasted a year, but I cannot glean it from the website. What's the deal?

The deal was that it was a part of ArsDigita Corp, and it died when the founders were sued. If you don't know about that, I suggest you read up on Philip Greenspun's take on things that took place in spring/summer 2001 (when AdUni's first and only class graduated):

http://waxy.org/random/arsdigita/

Sounds more like a hive

With the putrid prestige-farming removed.

Just a thought...and this could be very crazy, however if you were able to pull 'camps' together, where each camp is 'hosted' by someone 'famous'.

Just like Y Combinator is hosted by PG, etc., if you get the city behind it, then get a few noteworthy ex-entrepreneurs - and put them up in a building of their own, they might be interested.

As the other guys/gals pointed out, there has to be some key value-proposition. Maybe something unique to the area?

This might be something you might be able to get a federal grant to do, considering the many ideas the President's team has been throwing against the wall to see what sticks. I wouldn't be surprised if there were grants already available that you could use.

If I were not married with a kid, I would definitely strongly consider it.

I'm not thinking of a building. Really, I'm thinking of the entire neighborhood, the Starr Historical District. Half of it's vacant. Most of it is breathtaking if, like me, you have a thing for 19th-century brick, and can see past the run-down state and imagine what it should look like.

What we have is quiet. Not absence-of-life quiet, but something more contemplative in nature. Earlham College, 150 years of Quaker history, an industrial history that is mostly gone now. If you ever just wanted the world to shut up for a year while you got your startup working, this would be that opportunity. That's how I see it.

But you could put that anywhere. It's just that I know where the good houses are; I walk the dog past them every day and think, man, I could put five smart people in there. And I'd get to save another grand old house.

I think it's a great idea, but I think you need to be careful how you get it started. It's the sort of thing where success or failure are going to be totally determined by the people you can fill it with. If you get a good group of people who are all driven to do cool stuff, then I think you'll probably succeed and form a great community.

However: a few bad apples could really ruin the whole bunch. I could see it falling apart messily with only a few dominant-personality types who decided it was just an opportunity to freeload. (Thinking of other group dynamics: throw in one bad person and suddenly everyone's leaving their dishes and trash everywhere because they've seen that it's OK to do it.)

You might want to take some cues from the other end of the economic spectrum: farm-based communes. The ones that have survived (rather than crashing and burning just after inception, as many did back in the 60s and 70s) are the ones that have fairly high barriers to entry, small numbers, and well-defined rules that everyone is familiar with.

Anyway, just because finding the right people is going to be key, I'd be wary of trying to start too big, too fast. I'd start small, and focus on building the community and hammering out how things ought to work, rather than on increasing your numbers or filling the space available. The worst thing that could happen would be to grow too fast and then have the whole thing implode when it becomes unmanageable.

Anyway, sounds like a great idea though; I hope you make a go of it.

I'm almost imagining Disneyland for Entrepreneurs here. It could be awesome. And getting guest speakers etc in, both local and not-so-local, is a great way to get a profile and beat the isolation.

I think 'someone famous' would want to live someplace nice. This place is probably cheap for a reason. It may not be bad, but it's likely not somewhere you'd live if you had the money to choose.

Still though, I think it's a really cool idea!

It's cheap for the same "reason" English words are unspellable: arbitrary history.

That's why it's cheaper than equivalent places, but my comparison was more with where the wealthy choose to live. In other words, if you had tons of money, would you choose to live in the middle of Indiana? I wouldn't. No mountains.

Sheerly out of curiosity, how much is that 23-unit building going for?

Edit: Also, you should put an email address in your profile.

I dunno. I'll ask tomorrow. It can't be much; it has no parking, there's no work here, and my guess it would need roof work, electrical upgrades, and plumbing. If they're asking more than $500,000 they're dreaming. (Frankly, if they're asking for money at all, they're dreaming.)

Edit: I do have an email addy in my profile.

Edit: um, now.

$109,000 and change. For 23 one-bedroom apartments and a third-floor dormitory with 18 sleeping rooms and a communal area. It was built in 1928 by a Cincinnati architect as a dormitory for the women's business college that has since evaporated (I believe it is now the Wayne County Historical Museum).

There's another 18-unit building for $179,000 with all hardwood floors, big units, French doors, these all have balconies - it could be sweet! (The realtor lady thought this idea was pretty exciting, for obvious reasons.)

What sort of shape are they in?

I think the larger units are the most interesting. The chances of fostering success go up linearly with more entrepreneurs but there is also a much greater chance of having synergistic effects.

They need a lot of work, of course. That's OK; given some startup capital (I suppose this would be metastartup capital) I could easily do a reasonable job of making them livable, then comfortable, then nice. It wouldn't even cost all that much - even if I hire people to do the work. The Amish are only charging $9 an hour right now; there's just not enough construction work to go around.

Hell, I'd be tempted with this kind of deal. The face-to-face networking opportunities alone would be worth it.

That's exactly it! There's a really rich tradition in this town of communal meals. Sit down with five or ten or twenty of your technical peers for curry every day? For free? You'd have to get a lot of synergy going with something like that.

Perhaps the follow-up topic should be: who's in?

I guess the biggest problem is that it's in Indiana :-P

As an entrepreneur, I don't want to meet more entrepreneurs. I know tons of them. We chat, we email, we hang out, and we bump into each other at social gatherings.

Entrepreneurs don't need other entrepreneurs, because we already knows tons of them. What we have in short supply is advisors, investors, customers, and employees.

You don't need a hacker apartment to meet hackers.

I don't think you can make your proposal work in a way that's a good use of your time (and other resources) as you've originally proposed.

If I were you I'd tweak this around a bit.

There might be an interesting niche for apartment-complex/executive-suite hybrids.

Basically an apartment complex but with a reasonable # of "conference rooms" and/or mini-workspaces.

The ground floor would be given over to conference rooms / work cubbies / etc. and the upper floors mainly apartments (with perhaps some more workspace thrown in).

The appeal to young contractor / freelancer types would be pretty obvious, if the price is right: convenient to their needs and cheaper than renting a proper office + an apartment would be.

There's probably a bit of a trade-off -- every square foot given over to workspace is a square foot you're not renting out -- but with enough research and input from experts in this area you would be able to figure out if it worked.

I'm not sure Richmond is the right place for it but if there's enough in the vicinity you could possibly make it work.

If you got enough of a good thing going you might then branch out into letting tenants stay for free (or reduced rent, etc.) in exchange for equity if they were starting up their own thing.

There are some great points, argument and counter-arguments. I would like to move forward with the "campus" style analogy.

I think you could side step a lot of the problems, i.e. house squatting, housing discrimination, screening of less then ideal individuals... if you made it into a vocational school, or certification style program.

Granted, your biggest hurdle is making those diplomas and certifications carry weight for the prospective entrepreneurs. On the same token, the prospective entrepreneurs would want there efforts to mean something, meaning they would work towards proving the reward.

In this process people are applying for the educational benefit. As the process moves on, education is about empowering the individual. This is generally where entrepreneurship takes flight, or at least leaves the nest in an attempt...

As a founding principle I would take your love for those old brick buildings, and run with it in the application process, as well as a lead into the educational process. The focus being on rebuilding, sustainability, and creating future generations in the program, of witch I'm assuming your goal is to make a Y Combinator style "campus".

There is something to be said about building an empire from the ruins of the past.

Not stupid at all, Brilliant!

I'd be very tempted, I am not location locked working on the current startup, broke, and definitely sounds like a interesting deal.

I think if you just call it "food/housing for equity" it would be more accurate than calling it an incubator. Regardless of feedback, you should give it a shot!

Well, true. I think of it as an incubator because I envision a whole lot of people working on neat stuff in the same place, which is what I always figured an incubator should be.

As to giving it a shot: man. I'm not sure what the threshold population would have to be to make it work. I could house, like, one person starting next year. (Or two friendly persons.) If their venture paid, that would work, but given that most don't, it probably wouldn't. If I also had some capital, well, there's a three-bedroom place two blocks away for $9000. It looks in pretty good shape from the outside - buy that plus my carriage house and I could house about five people. The odds start to look better in that case.

Once the ball started rolling, well, house prices would unfortunately go up. But maybe not so horribly much, yet. There's plenty of room for growth.

The town would eat it up. They're desperate for anything that might jumpstart something more like an economy.

Do you have a website for this idea yet? I know I'm interested. Maybe making a forum would help. The comments section of HN will only get you so far.

Yeah, see http://richmondinc.wftk.org/ for a fantastically minimal Drupal setup as a starter.

Never mind that, my server is too busy to do anything reasonable, so I put it at http://richmondhackers.drupalcafe.com/ - now I don't have to worry about fixing my server. (Not that I should put it off any longer, but still.)

I can't imagine why anybody who is putting their heart into their work would take you up on this offer. It's easy enough to get a cheap place to live (i.e. rent a room) for a while, even in Boston, SF or NYC. Your offer of bandwidth of server space is probably worth $150/month, which is the cost of a cheap physical box somewhere. The other service you're providing is... food. You know, I just don't see any real value in what you'd be providing to people.

And, btw, there's very little that's academic about building startups. If that's how you're thinking of it, I'd suggest getting a bit of experience in this area first.

pg can suggest ideas like this because he can give real advice based on experience, star power, and access to his network. Your heart is surely in the right place, but cheap server space, food and a place to live in Richmond Indiana doesn't quite add up.

From your perspective, have you done the math on this?

I agree. The only workers this would attract are 'hacker hobos'. It's almost the same as the plot to The Seven Samurai - pay us 3 meals a day and we'll work for you. The problem is, you get what you pay for. I think anyone with skill would find a job that would net them actual money, since most people have bills and like to purchase things.

Just don't be too controlling. "Incubators tend to exert more control than VCs.." -- http://www.paulgraham.com/startupfunding.html, http://www.paulgraham.com/maybe.html

I've had a similar idea but more like a "startup farm" or house, but finding an entire small village suitable for this - I say go for it!

This is actually an idea of the kind where I think "I could do this for the rest of my life". Considering I'm the kind of person with tonnes of ideas and too little time to make them happen, that says a lot.

Even renting out a small office space in the middle of nowhere like a "get-things-done"-facility would probably work. I'm thinking of the HN story some time ago where the entire development department of a company went to Brazil, rented a cheap place and worked day and night to Get Things Done - and they did.

Sort of like an anti-spa. :)

Could be an extra income if nothing else.

"Hacker village" has kind of a nice ring to it.

One huge issue: zoning.

How many people per house? Unless it is zoned for apartments, you are going to have a rough time. Many places have rules against N unrelated people living in the same building. I think in my township it is 2, or some really low number.

That said, there was once a block of cheap apartments in NYC for musicians only. Lots of great talent and big names came out of it. It can work, but I'd read up more on this major precedence. (Arg, google is failing me. I know it is hard to find good old apartments in NYC, but this is just silly.)

You should have a pay-extra-rent-to-retain-your-company option.

Most rural places have little in the way of zoning. As long as you aren't putting a nuclear waste plant (and maybe even then if it has good jobs) next door to a public grade school then you're normally fine.

Zoning issues are the biggest generally in big cities or areas of rapid expansion.

False and false.

My family lives in the heart of amish country, and the local boards are a bunch of power tripping bureaucrats. They will ruthlessly shut down little old ladies who try to sell jelly.

Zoning is a huge issue, as it is a township's first line of defense against people who want to change things.

Have a professional program that runs alongside the basic program. When people apply, they have to offer something the place. Anything from a quiz, to a magazine, cooking, to lectures, to a strategy sharing night (where confidentiality agreements are signed and startups can reveal themselves to others). Maybe run a consulting company within the location. Make sure everyone has something to offer. Have some type of policy where new people and potential new people are shown in a public place. Also have some type of complaints box.

Could you post the street view location for the neighbourhood? Here's the centre of the Richmond for example: http://maps.google.com.au/maps?hl=en&sourceid=navclient-...

I don't know how good the fit is, but your suggestion reminded me of a start-up incubator based in Bloomington, IN called Sproutbox.com. Maybe there is some way they could assist the kind of organization you have in mind.

They have so far not responded to my email.

+1 on the location. I currently live and work from an old renovated cotton mill in Dalton, GA. Only drawback is the limited population of local hackers and entrepreneurs.

I would seriously consider this in a major socal city.

But you're not likely to find real estate that cheap in the city. Even in the current economy. Trust me, I've been looking. (shameless plug: I just started a coworking space in Atlanta called Ignition Alley: http://www.ignitionalley.com )

I am currently working out of the Caroline Collective when in Houston. They're a non-profit coworking outfit. (http://carolinecollective.cc/) I've already met some interesting people. (TX-RX Labs for starters: http://www.houstontechnologycollective.org/) This seems to have some of the benefits, but doesn't require travel outside of my home city.

If I wanted to do a startup that required 6-9 months of full time development, the room+board incubator sounds attractive.

I'm in Atlanta, and very interested. I also live in Midtown just down the road from you.

Taking a look at the web site now.

I think it's a great idea, but I would just do it for profit. Make it like a fraternity house, a reasonable month to month charge for room, board, & wifi. The only thing I'd be concerned about is access to customers. Richmond does seem like it's a little out of the way.

I'd be so into this idea if it were all physically practical, wish it were easier to find similar situations.

If anyone is interested in experimenting with something like this in Europe, please drop me a line.

I would like to setup something between a co-op, coworking space, hacker space and incubator, preferably in a small city.

Some things that would be provided:

- Good location, somewhere not too urban

- Separated work and living quarters, a little overlap is ok

- Projection room, conference room

- Broadband + backup 3G connections, local VPN, file-server/NAS

- A couple dedicated servers for web development

- Groceries/food/etc, some provided for free, optional combined shopping list for those that want to save money and time

- Communal cooking/lunches/dinner, maybe a dedicated cook

- Cleaning service on-demand

There's lots of exciting possibilities, once you find a few good people to do this with. If any of the above sounds good to you, I'd be glad to discuss further.

First of all, your house if flippin' beautiful. And your blog is awesome. I think this is a great idea, and I think you should ignore all of the reasons not to do it. There are only a couple of things you need to be fairly certain of- 1) are there enough young entrepreneurs in the area to make this worthwhile, and 2) do you have the skills and time to make this happen. You may want to consider raising some money from local rich people and a small board of experts who can help make this happen. I think it's an awesome idea.

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