This article was taken from the April issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online
Incubate other businesses
The offices of Red Gate are located in the sedate environs of Cambridge's business park. The presence of the obligatory ping-pong table suggests this is a regular SME tech company. But chat to the 160 people working here, and you'll discover that 9 of them are not actually employees: they are running four new start-up businesses on the premises.
They're the winners of the inaugural Springboard competition, a contest for new entrepreneurs whom Red Gate then hosts for three months, giving them living expenses, office space, mentoring and access to every part of the company. But unlike other competitions such as Seedcamp and Y Combinator, Red Gate doesn't ask for anything in return; it has no equity stake in its guests' projects.
So how does it benefit from the arrangement? "It's partly about creating a people cocktail. Mix in some external smart, entrepreneurial people with fresh ideas with the people here, shake and see what happens," explains Neil Davidson, joint CEO.
The idea was born in October 2008, when Red Gate loaned spare office space to a local start-up. They ended up hiring four people and buying up one of the companies (Davidson calls them "the accidentals"). Despite formalising the process, they've kept things simple: "We didn't want to waste time with lawyers and legal documents," Davidson says. "Also, if we asked for something in return there would have been a bunch of complex conflict-of-interest issues to sort out." The winning teams didn't even sign a contract. Davidson eventually expects to invest in a couple of the ventures, more by accident than design: "We didn't have a goal or plan. We figure that if we do the right thing, good stuff will happen. Red Gate will benefit -- financially and otherwise -- as a secondary effect."
More companies in our Work Smarter package:
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Inditex
McLaren
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Atlassian
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Victors & Spoils
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This article was originally published by WIRED UK
