HUNTSVILLE, Alabama – Paul Mulqueen walked into Huntsville’s high-tech business incubator on Sparkman Drive in 2010 with an idea to launch a medical instrument design and manufacturing company.
Four years later, Mulqueen is leaving BizTech, but not because his small startup is thriving and ready to branch out on its own.
After the 20,832-square-foot BizTech office building went up for sale and former Chief Executive Officer Gary Tauss abruptly resigned earlier this year, Mulqueen decided to cut back and “hibernate” at home while he does other things to raise capital for his company, Bragg Peak Systems.
Bragg Peak Systems is one of BizTech’s 15 remaining tech clients. Citing a lack of guidance and direction from BizTech at the management-level, Mulqueen said he’ll be surprised if the incubator survives another six months.
“When there is no captain, the boat is going to drift,” said Mulqueen, who was with Sanmina-SCI before becoming a client of BizTech. “The biggest thing they need is somebody at the board of director’s level that says, ‘I’m in charge boys, I’ll go in there and see if there’s any way to make it successful.'”
Aware of the rumors that BizTech is on its last leg, BizTech recently tapped retired Huntsville Times publisher Bob Ludwig to be interim CEO and president of the organization while they search for another leader and determine the future of the struggling incubator.
Like a hospital incubator that provides care and protection for premature babies, BizTech has worked for two decades to foster technical startups in the Rocket City. But with the downfall of high-profile BizTech client InQ Biosciences due to sequestration and changing entrepreneurial ecosystem, things have slowed down considerably.
Ludwig said BizTech is at a point now where it needs to “sit down and really look at itself with a whole set of fresh eyes.” That’s part of the reason officials decided to put the BizTech building on the market with John Blue Realty about seven months ago.
BizTech’s new Director of Marketing Jonathan Pease said BizTech doesn’t have enough revenue-generating companies or programs to justify operating at Sparkman Drive any longer, but is looking at a possible new location in downtown Huntsville.
“BizTech needs to at least find a way to cover its cost or break even to make it work,” he said. “The board has continued to dump money into BizTech to keep it alive while at the same time trying to find a way to downsize by getting rid of the mortgage they’re stuck underneath. … They feel that if they find a new CEO and put a new face on BizTech, they will be able to regain some of the old glory that they had.”
Revamping BizTech’s mission
In early May, BizTech opened Vertically Integrated Business Ecosystem (VIBE), downtown Huntsville’s first co-working space for aspiring entrepreneurs and business professionals. Pease said the goal was for VIBE to be a launching pad to help rebuild BizTech’s brand, but it’s been a slow process so far.
“Because of the big question mark with BizTech right now, we’ve experienced here at the VIBE some challenges getting some of the higher-level support we would’ve like to have gotten, just because people are unsure about what’s going on here,” he said.
That’s where Ludwig comes in. Ludwig, who has served on boards for Downtown Huntsville, Inc., the Chamber of Commerce of Huntsville/Madison County and Tennessee Valley BRAC, has been tasked with exploring new local and regional partnerships that would benefit the Huntsville community and BizTech.
Ludwig, who was instrumental in downtown Huntsville’s restructuring efforts and the appointment of DHI CEO Chad Emerson last summer, sees a similar process in BizTech’s future.
“I feel hopeful we can sit down and decide whether or not we can contribute to the community’s wellbeing and its growth and its ability to help do startups,” he said. “Do I believe this entity will survive? I think it will survive if it needs to survive.”
Ludwig said BizTech has been “too insular” by limiting itself to mostly high-tech companies. The need for startup space in Huntsville is not as critical as it was 20 years ago when BizTech was founded, but Ludwig said a combined environment in an urban setting like downtown could work for BizTech and other community organizations, including Rocket Hatch, Mindgear Labs, UAH’s Innovation, Commercialization, and Entrepreneurship (ICE) Lab and West Huntsville LLC.
By somehow combining the efforts of these groups, Rocket Hatch co-founder Antonio Montoya believes thousands of potential entrepreneurs in North Alabama would benefit.
“Like the Internet, our community should be a network with built-in redundancies and strong partnerships so that a single failure cannot bring down what has taken so much effort to achieve,” he said. “Diversity of players also allows multiple leaders to emerge who can try different approaches and ideas.”
To survive, Pease said BizTech should hire a CEO who can raise awareness but also fill the building up to capacity and generate enough money to support the organization. If they move to a smaller space downtown, Pease said BizTech would still offer individual offices but in a more prominent location.
Pease, who said VIBE is at more risk of dissolving than BizTech, feels BizTech doesn’t need a CEO in “the traditional sense.” They need someone who has excellent leadership skills, a strong passion for the startup community and is “really good at creating a platform for entrepreneurial growth.”
“It’s going to take somebody with a lot of magic to be able to revitalize BizTech,” he said.
Sergey Sarkisov, president and CEO of 9-year-old BizTech client SSS Optical Technologies, plans to stay with the incubator for as long as possible. He said BizTech’s location is ideal because it is in Cummings Research Park across from UAH and is minutes away from Redstone Arsenal and downtown Huntsville.
Sarkisov blamed “errors with the management” as part of the reason BizTech is struggling today.
“I do believe Huntsville needs a business incubator of the sort like BizTech,” he said. “It probably can be modified a little bit, could be adjusted, could be adapted, could be anything. … Not having a business incubator like BizTech – it’s just impossible to imagine.”
August 01, 2014