Category — enabling

My first response to a thread on Detroit’s Urban Innovation Exchange (UIX) about celebrating failure as an intimate partner to innovation. The original article that spurred the thread is here.

From the website: The UIX is ”an initiative to showcase and advance Detroit’s growing social innovation movement. Led by Issue Media Group withData Driven Detroit, The Civic Commons and a coalition of media and community partners, UIX is made possible thanks to funding from the John S. and James L. Knight Foundation.”

Here’s a profile they did on me and my work at FoodLab.

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I agree that it’s a good idea to create a culture where it’s okay to fail — this ethos was drilled into me early in my professional life working in the tech industry. I’m sure you’ve heard the mantra: “fail early, fail often.” It’s why good angel investors invest in PEOPLE not in IDEAS.

I think for me, failure’s intimately tied to two of the things I value most: humility and constant learning.

When we fail (and recognize our mistakes as such), we realize that not we’re not Gods, we can’t predict or control everything (bad OR good, as Claire pointed out above), but we can strive to pay attention to what we want and whether what we’re doing is actually getting us there… if sometime we’re doing doesn’t serve us, if we’re failing, we try something else. If we pretend we never fail or we’re afraid to, we’ll never innovate, never improve. Einstein supposedly said “Insanity is trying the same thing again and again and expecting different results” — but sometimes trying something different requires messing up.

On the other hand, if we try things willy-nilly and we don’t learn when we fail, though, there isn’t a whole of point to it. There are plenty of examples that we might call failures of society (some really big ones) that we haven’t really learned from. There are plenty of instances where we try to build things from scratch when we could have learned a whole lot from someone who has done something similar before. I’m not sure that type of failure is noble or useful.

How can we harness failure to learn from our mistakes and do better? I think the non-profit/foundation world has a whole lot to contribute here. How do we build a system that doesn’t just reward success, but successful iteration, learning, capacity to change, resilience? Getting rid of “stagnation” as Tunde puts it… but not just no stagnation for the sake of movement but for the sake of betterment. When it comes to social enterprise, SO OFTEN we only talk about what’s working while covering up the things that haven’t worked or the parts of an existing enterprise that are particularly challenging, troubling… One of the things I really admire about the Roberts Enterprise Development Fund is the work they’ve done to document some of the enterprises that just haven’t worked out, and how dedicated they’ve been to working with many of their grantees through problems, not just giving up after one grant cycle…

I also want to mention that we can’t ignore the size of risk & resources involved in an operation. Failure is more tolerable in a fundraising experiment for a small community project, but maybe less tolerable when you’re building a ship or performing heart surgery. In those cases, you’ll want to get all your failures out of the way on LOW-RISK experiments up front before you commit to the real deal.

I’d also point out that we have a tendency to allow some kinds of people the luxury of “failing” and not others. But more on this some other time…

Some quick thoughts this morning when I came upon an interesting graphic on strategies for on-farm resilience from a project in the area where I used to farm. I love the idea of resilience versus growth as a measure of sustainable development AND personal development.

The Farm Resilience project describes resilience as “a community’s ability to anticipate, adapt to, and successfully overcome what usually amounts to unanticipated, harmful events. Every community faces threats. These threats may come from nature, rather the natural environment, from economic forces within the community, or from external social policies and programs. The most challenging threats are often a combination of all of these. Resilience is the ability to provide the necessary physical, social, cultural, and economic structure for members to live, work, and thrive in the face of chronic and emerging threats.”

I’ve been interested lately in the way that positive action emerges from crisis, but if we remain in a crisis frame, I think we tend to limit our realm of action to building systems capable of adapting to that particular crisis rather than considering that we might also think about this in the reverse… how can we build a system that’s better positioned to take advantage of natural energy (whether you think of low-entropy natural capital, or life-force/Qi, or some other kind of energy that I don’t yet know about).

Can we reframe resilience as not only response in reaction to threats, but also ability to respond to opportunity?

As a society, we’re rightly concerned about tipping into undesirable new natural and social equilibriums (climate change, loss of soil, water shortages, coral reef damage, childhood obesity, political apathy, etc.) that will result in widespread suffering. But I guess I wonder how we can balance between thinking about how to create systems to respond to increasingly tangible threats to the status quo and find ways to maintain AND thinking about how to tip unethical, unjust, unsustainable, inelegant, non-loving equilibriums into ones we like better.

In Resilience Thinking, Walker and Salt offer a nine-part vision to what a more resilient world would require. I like the way they make resilience seem proactive rather than preventative. This could have strong application to the way we think about “success” in the context of FoodLab Detroit (our network of triple-bottom-line food entrepreneurs)… thinking through this more in the couple of months to come…

1) Diversity: “A resilient world would promote and sustain diversity in all forms (biological, landscape, social, and economic)”

2) Ecological Variability: “A resilient world would embrace and work with ecological variability (rather than attempting to control and reduce it)”

3) Modularity: “A resilient world would consist of modular components”

4) Acknowledging slow variables: “A resilient world would have a policy focus on “slow,” controlling variables associated with thresholds.”

5) Tight Feedbacks: “A resilient world would possess tight feedbacks (but not too tight)”

6) Social Capital: “A resilient world would promote trust, well developed social networks, and leadership (adaptability)”

7) Innovation: “A resilient world would place an emphasis on learning, experimentation, locally developed rules, and embracing change.”

Overlap in Governance: “A resilient world would have institutions that include “redundancy” in their governance systems and a mix of common and private property with overlapping access rights.”

9) Ecosystem Services: “A resilient world would include all the unpriced ecosystem services in development proposals and assessments.”

The essay below represents a mid-point in the evolution of my research to where it is today. When I first moved to Detroit to live and work and pursue a graduate degree, I thought I’d focus on alternative food distribution/delivery models that were getting produce and other healthy foods directly to consumers in Detroit: things like the Fresh Food Shares, Healthy Corner Store initiatives, and mobile produce trucks. Folks in town who were doing the work wanted more information on which of these models were most effective and which if any could become financially self-sustaining.

The evaluation project I was going to join never really panned out, so I continued working on my own little project related to food distribution and in the meantime, started a small project-slowly-evolving-into-an-enterprise which put me smack in the middle of a whole bunch of folks who were trying to start food businesses in Detroit. Lots of these people were not starting businesses just to create something or to make money or to have more freedom or to fill a need for some specific yummy food they couldn’t get (some primary reasons entrepreneurship lit mentions), but also because they thought of their business as a means of some kind of social change or transformation.

Soon all I could think about was how to support these businesses. I wanted to be in Detroit and I wanted to eat good gelato and bagel and pickles and I also wanted to see what other kinds of cool things these businesses could make happen. Could they really support more urban market farmers? Reinvent Jewish culture? Increase awareness about healthy eating and our bountiful SE Michigan foodshed? Could they do these things while making a profit?

I started to wonder, what resources were out there to help people like me and these others get started? Detroiters were super supportive and there were ostensibly resources in town for small businesses and entrepreneurs, but nothing seemed like a good fit. What was missing? I started looking into kitchen incubators and then began to wonder — how effective are they in actually getting businesses off the ground? Food businesses are fun and trendy, and they provide opportunity for self-employment and self-determination for folks who might not start other kinds of businesses (see, for instance, how involved immigrants are in a the retail food economy in major cities), but can spending on incubators be justified? How and when?

I still think these are interesting and important questions, but a few things happened that changed the directions of my questions. More on that to come… for now, some thoughts on incubators…

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Small business incubators have become increasingly popular economic development tools over the past 25 years. More recently, groups focused on community development and local food systems have developed kitchen-based incubators to foster food processing and specialty food entrepreneurs.  These spaces generally provide shared-use commercial kitchen facilities, marketing, operations, and technical training, and opportunities for networking and cooperation on logistical details like procurement or distribution.

While research on small business incubators is relatively robust, little formal research has been conducted to assess the economic and social impact of kitchen incubators, or to come to conclusions about factors for their success. Most of the existing literature exists in the form of case-studies, feasibility studies (e.g. Sakakeeny, 2007), technical guides (e.g. Wold & Sumner, 2002), or project reports to funders, and most of this literature tends to focus on particular kitchens within particular contexts.

This dearth of academic literature make sense for a variety of reasons: as of 2007, UK researcher Benjamin Dent (2008) identified only 57 kitchen incubators in the US. Many of these were still within the first few years of operation, and they varied in terms of location, size, services, organizational structure, and other criteria. Thus, the sample has been small and diverse, so it may not have been practical to develop generalized conclusions. Also, the impact of kitchen incubators can be difficult to measure because many espouse explicit social goals including poverty alleviation, “empowerment” or quality-of-life, in addition to economic development goals (Sakakeeny, 2007).

However, as demand for locally produced goods continues to grow (King, et. al., 2010), it appears that local communities and organizations are increasingly looking to kitchen incubators as a tool for local economic and local food systems development. As of October 2010, the University of Wisconsin Extension’s Food Business Incubator Network lists sixteen projects in Wisconsin alone. As private organizations and policy-makers consider investments in local food systems work, it will become more important to measure and describe the potential impact of kitchen incubators relative to other tools, as well as outline the internal and external factors that determine the success of a project.

There are a number of elements to this question, but one in particular stands out in current literature:  to what extent is the success of a kitchen incubator dependent on demand for local specialty products in the region and a marketing and distribution system, and to what extent can incubators take a role in helping to develop this market demand and distribution infrastructure?

An Iowa State University study of 3,500 consumers in the US showed that consumers are willing to pay a premium for place-based products regardless of origin, and that they are willing to pay even more for products from their state (DeCarlo, Frank, & Pirog, 2005). This study did not analyze the data by region, but it would not be surprising to find disparities between individual consumers’ willingness to pay. Despite national trends, research makes it clear that overall demand for local food varies both by region and by the product in question (King, et.al., 2010). Would these differences affect the success of a kitchen incubator project? In the evaluation of a pilot incubator project in New Hampshire, Sakakeeny (2007) notes that “an incubator will not succeed if the tenants do not have a product that will sell or a market to sell to” (p.46). This seems like common sense, but to what extent can an incubator overcome an ostensible “lack” of a market by making connections with local retailers and helping entrepreneurs develop their brands?

Similarly, what role does distribution infrastructure have to play in the success of kitchen incubators? According to Dent’s (2008) survey of 57 incubator managers, distribution is the most significant for micro-scale food enterprises, even before access to facilities. The Economic Research Service’s report on local food supply chains sought to understand local food supply chains in order to identify barriers to expanding markets for local foods (King, et.al., 2010). The existence of adequate distribution infrastructure and logistics may be intimately tied to the size of the market for locally produced goods, and both may play a major role in whether or not a particular kitchen incubator is successful. In order to better direct public dollars and to help guide the development of incubator kitchens, we should examine the role of market demand and distribution systems in the success of existing kitchens, and also seek to understand to what extent kitchens were able to play a role in that success by actually developing demand and/or distribution capabilities.

Works Cited

DeCarlo, T.E., Frank, V.J., & Pirog, R. (2005, October). Consumer Perceptions of place-based foods, food chain profit distribution, and family farms. (Report prepared for the Leopold Center for Sustainable Agriculture). Ames, IA: Iowa State University College of Business,.

Dent, B. (2008). The Potential for Kitchen Incubators to Assist Food Processing Enterprises. International Journal of Entrepreneurship and Small Business. 6(3). 496-511.

King, R. P., Hand, M.S., DiGiacomo, G., Clancy, K., Gomez, M.I., Hardesty, S.D., Lev, L., & McLaughlin, E.W. (2010, June). Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply Chains, U.S. Dept. of Agriculture, Economic Research Service.

Sakakeeny, Kria (2007, April). The Common Kitchen: A Culinary Incubator. Unpublished Masters Thesis.  Manchester, NH: School of Community Economic Development, Southern New Hampshire University.

Wold, C. and Sumner, H. (Eds.). (2002). Establishing a Shared-use Commercial Kitchen, Revised 1st ed., United States: NxLevel Education Foundation.

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A (partially) annotated bibliography

Case Studies, feasibility studies, and technical reports on kitchen incubators

Buckley, J., Peterson, H. C., & Bingen, J. (2011). The Starting Block: A Case Study of an Incubator Kitchen. Michigan State University.

A case-study of the Starting Block incubator kitchen facility in Hart, Michigan, based on 15 semi-structured interviews with incubator staff, clients, and community partners. The case-study covers kitchen startup, general operations and some detail about the participating businesses.

Clark, S., Howard, H., & Rossi, V. S. V. (2009). Exploratory Study for a Kitchen Incubator in West Memphis, Arkansas. University of Arkansas: Clinton School of Public Service.

This exploratory study was conducted by a team of students from the Clinton School of Public Service at the University of Arkansas in order to provide background data for a local development agency to understand the potential benefits and risks of establishing a kitchen incubator in West Memphis, AR. The report mostly draws from technical literature on establishing incubator kitchens in order to provide recommendations for further project development. The recommendations do an excellent job of drawing together best practices from multiple technical sources, many of which are provided in the appendices. Unfortunately, none of the recommendations include an academic citation, likely because little academic research has been done to demonstrate the effects of these best practices on success of a kitchen. The report does not direclty address the distinction between a rurally-based and urban-based incubator kitchen. .

Dent, B. (2008). The Potential for Kitchen Incubators to Assist Food-Processing Enterprises. International Journal of Enterpreneurship and Small Business, 6(3), 496-512.

Dent’s peer-reviewed article appears to be the only academic study in the literature which surveys a large sample of incubators in the US (57). The author uses data from the survey and financial projections of a “model incubator” to determine the financial feasibility and potential impact of a rural-based incubator in the UK. The study determines that most kitchen incubators do not break even on operating costs, do not tend to attract farmer-clients, and often attract clientele who are not interested in expanding beyond the capacity of a shared-use kitchen space. According to Dent, incubators may be more likely to achieve financial sustainability in urban areas where the concentration of entrepreneurs is greater and there is greater potential for a diverse clientele base, or if they employ alternative strategies like co-packing arrangements to increase profitability. The author concludes by noting that incubators must be seen as one part of a complex food system. They must take into account marketing and distribution challenges in addition to business planning and capital access, and economic and financial indicators may not be sufficient measures of the true impacts of an incubator.

Hall, E. (2007). Measuring the Economic Impact of the Nonprofit Small Business Incubator: A Case Study of Nuestra Culinary Ventures. Masters thesis, University of Pennsylvania, Urban Studies Program (Senior Seminar Papers).

This undergraduate senior thesis attempts to analyze the economic impact of a non-profit urban incubator kitchen in Boston, Massachusetts. The researcher began the study as an intern at the incubator, Nuestra Culinary Ventures (NCV), and developed her research questions based on her experiences there. Analysis is based on six months of financial statements and survey results from 17 current incubatees and three former program participants. The study concludes that NCV is financially “unsustainable” because it does not generate enough income to cover operating expenses and recommended that NCV either close or seriously overhaul its program structure to more effectively meet its goals of creating employment opportunities and economic benefit to local residents. It does not explicitly generalize these results to apply to other non-profit kitchen incubators, but does tend to employ strong polarizing rhetoric that implies that kitchen incubators might be poor choices as tools for economic development. While the study’s analysis seems accurate, it falls outside the scope of the paper to explore the reasons for NCV’s failure to achieve its goals. Besides a perfunctory nod to measuring the effect of the incubator on ‘”diversity,” the paper also does not go into metrics beyond a few direct economic measures: full-time-equivalent jobs created, sales, expenses versus income, and finally cost-per-job-created. The limitations of the study speak to the need for a mixed methods approach to research on kitchen incubators. The recommendations presented at the end of the study (increasing staff, diversifying the base of entrepreneurs, improving the screening process, and expanding NCV’s network) give useful clues for areas of future research.

Hollyer, J., Castro, L., Salgado, C., Cox, L., Hodgson, A., Thom, W., Yurth, C., Kam, P., & Kwok, M. (2000). Some Costs and Considerations for Establishing an Entrepreneurial Community Shared-Use Kitchen or “Test-Kitchen Incubator”. Cooperative Extension Service, College of Tropical Agriculture and Human Resources, University of Hawaii at Manoa.

Sakakeeny, K. (2007). The Common Kitchen: A Culinary Incubator. Masters thesis, School of Community Economic Development, Southern New Hampshire University.

This report details the background, objectives, design and implementation of a pilot culinary incubator at Southern New Hampshire University (SNHU) and provides recommendations for the continuation of the program. The author, a Masters student in community economic development at SNHU, was not only a researcher, but also one of the three main project organizers. The study does not attempt to generalize its findings to other incubator situations, but is intended to inform local stakeholders. The most useful sections of the report are the detailed descriptions of the management challenges associated with a part-time incubator staff and the in-depth profiles on each of the incubatee firms. Different from other case studies on kitchen incubators, Sakakeeny also introduces the concepts of place-making and cultural development and cultural education as outcomes of culinary incubators beyond traditional economic metrics.

Wold, C., Sancho, M. F., Schubert, K., Wojtacha, J., & Hobbs, L. (1997). Establishing a Shared-Use Commercial Kitchen: A NxLeveL Guide.

This manual, edited by Cameron Wold is the “bible” of best practices for establishing a kitchen incubator. Wold has over 25 years of experience providing technical assistance for the establishment of shared-use commercial kitchens in a variety of settings. Cited in nearly every feasibility study and evaluation of community kitchens, this book provides a comprehensive guide to setting up a kitchen incubator from developing a local project team to writing a budget to kitchen design, all the way through to marketing specialty food products. The full second half of the manual is dedicated to appendices which include practical tools like sample tenant application forms and kitchen rules, a case study and sample feasibility study from the Denver Enterprise Center Kitchen Incubator, and a “primer” on the specialty foods market. The report does not draw from academic research, but rather from the lived experience of the six authors.

Impact Analysis, performance evaluation, and best practices for business incubators

Bearse, P. (1998). A Question of Evaluation: NBIA’s Impact Assessment of Business Incubators. Economic Development Quarterly, 12, 322-333.

Hackett, S. M. & Dilts, D. M. (2004). A Real Options-Driven Theory of Business Incubation. Journal of Technology Transfer, 29(1), 41-54.

Lyons, T. S. (1990). Birthing Economic Development: How effective are Michigan’s Business Incubators. Center for the Redevelopment of Industrialized States, Social Science Research Bureau, Michigan State University.

Markley, D. M. & McNamara, K. T. (1994). A Business Incubator: Operating Environment and Measurement of Economic and Fiscal Impacts. Purdue University: Center for Rural Development.

In this study, Markley and McNamara evaluate the impacts of a traditional business incubator in the Midwest by means of personal interviews with the incubator tenants and analysis of each firm’s financial data. The incubator studied was not a kitchen incubator, so the actual numbers were not relevant to my research; however, the authors outline a simple, useful methodology for calculating direct and indirect economic benefits and state tax revenue benefits for the incubator’s operation. The study does not attempt to compare the local economic situation with and without the incubator, but rather uses the economic impact analysis to compare the cost of creating jobs through the incubator with the “cost per job associated with the recruitment of major manufacturing plants.”

Voisey, P., Gornall, L., Jones, P., & Thomas, B. (2006). The Measurement of Success in a Business Incubation Project. Journal of Small Business and Enterprise Development, 13(3), 454-468.

The authors of this study employ a single case study methodology to evaluate a business incubator project in Wales with the explicit goal of establishing a more well-rounded set of metrics than the typical “statistical outputs” used to measure regional economic development projects. Based on a review of the existing literature on business incubators, and responses from 30 incubatees, the research concludes that “soft outcomes” such as improved business skills, increased networking, and positive PR should be taken into consideration in addition to the hard measures of profitability, enterprise growth and graduation rates. The study provides an excellent discussion of the difference between “hard output,” “soft outcome,” “hard outcome” and “distance travelled” metrics and includes an excellent graphic that lays out examples of metrics within each of these categories as they apply to business incubators.