Google looks to help startups start up, unveils hub network
Google already has startup hubs in London and Tel Aviv, which nurture young tech firms. But a new network will cover seven lesser-known pockets of startup activity, from Chicago to Nashville to Minneapolis.
Gone are the days of starting companies in your garage. And Google thinks it can help with the change in venue.
The tech giant announced Wednesday that it will be partnering with co-working spaces and "startup hubs" -- where young companies can get access to office space, mentors, and other resources to help them grow -- to create a hub network that'll help startups commune.
The initiative is being overseen by Google for Entrepreneurs, the arm of the company that focuses on nurturing startups. Google already has startup hubs in London and Tel Aviv, but this new network will cover seven lesser-known pockets of startup activity, from Chicago to Nashville to Minneapolis. Google officially kicked off the program with a launch event Wednesday morning in Chicago at 1871, one of the co-working spaces that's part of the network.
Google will back these hubs "financially and technologically," said John Lyman, head of partnerships at Google for Entrepreneurs (though he wouldn't elaborate on the "financially" part, other than that it won't take any equity from the tech hubs or the startups). Technologically, companies at these hubs will have more access to Google products, including cloud storage, a credit on Google App Engine, and increased access to the Google Maps API.
Outreach to startups has become increasingly common among big companies trying to sniff out innovative companies before anyone else. Earlier this month, Samsung opened the doors to its own accelerator, which backs companies and helps them grow, usually in exchange for equity, in New York. Google stopped short of launching a full-on accelerator -- one fully operated by the tech giant -- but the inroads it will create with companies at the ground level will be helpful as Google scouts for new opportunities in the future. The network could also serve as a feeder for the company's venture arm, Google Ventures.
"If it happens, that's fantastic," said Lyman. "But that's not why we're doing it." It has happened before, though. One example is BufferBox, a parcel-shipping company out of Communitech, a startup hub in Waterloo, Canada, that Google has worked with before and that's now becoming part of the network. BufferBox was backed by Google Ventures and subsequently acquired by Google.
It's been a changing environment for startups. On Monday, the Security and Exchanges Commission lifted its ban on general solicitation, part of the implementation of the JOBS Act. That means startups are now free to talk publicly about raising money -- on Facebook, Twitter, YouTube, or any other platform. All of this adds up to startups having broader choices, especially in their early days.