The three story brick building at 181 Fremont Street in San Francisco’s South of Market area stands out among the surrounding high rise office and residential towers. The building, with a fading advertisement from the 1930s for “Highest Grade Coffee” on its north exterior, is one of the last remnants of the area’s industrial past—built in 1907, it served for many years as a coffee warehouse.
Inside 181 Fremont, though, is a good part of the City’s technology present and future. 181 Fremont is the home of Rocketspace, one of the premier technology “accelerators” in the world.
Rocketspace incorporates new forms of business collaboration and clustering to spur tech entrepreneurship and growth. It also draws heavily on elements of the “share economy”, and suggests how the next generation of tech accelerators will evolve.
Rocketspace currently occupies 45,000 square feet at 181 Fremont and houses 132 different companies. Most of these companies are tech start-ups, though 7-8 Rocketspace members at any time are teams from major corporate entities.
The line-up of companies changes regularly, since a main goal of Rocketspace is to assist companies in growing and moving out of Rocketspace. Generally, the start-ups at Rocketspace average around 4 employees when they join and are encouraged to leave when they reach 30.
Rocketspace was founded by Mr. Duncan Logan, and launched operation in January 2011. Mr. Duncan, originally from Scotland, is a serial entrepreneur. Logan started several tech ventures in England in the late 1990s and early 2000s, and hit it big financially with a tech venture he participated with that provided e-mail security.
From that tech success, Logan came to San Francisco in 2008, and promptly launched into a new internet venture regarding residential real estate (a type of reverse listing service, identifying buyers rather than sellers). It did not succeed. But the experience brought him the Rocketspace idea.
“I realized we were working in isolation, and suffered from the absence of other entrepreneurs and sharing of ideas and talent”, Logan recalls. “Young companies are products of their environment. I started then to think, if I could create the most incredible environment for tech entrepreneurs, what would it look like”.
Logan incorporates 5 key elements in Rocketspace.
1. Office as a Service: The first element is one common to other accelerators, the sharing of overhead costs and in Logan’s words, “office as a service”.
The main floor, mezzanine, and second floor have similar looks. Each consists of a large open space filled with perhaps 40 tables of various sizes in which group of men and women are working on laptops, or talking quietly among themselves, or speaking on cell phones. Some of the tables have 2-3 workers, others have 8-10.
Along the walls are private conference rooms that can be reserved, and a shared kitchen area. Scattered throughout the space are leather chairs and couches. On the main floor is a space near the front window, with 40-50 chairs, used by Rocketspace for its frequent events and seminars.
Real estate costs are tailored to the firm. Each firm is on a month to month rental, and can increase or decrease space as needed. Rent is based on head count of workers. As a firm grows it can take additional, or move out without the burden of a long-term lease.
2. Access to capital: Rocketspace has cultivated a strong relationship with the venture capital community, and the relationship works both ways. For venture capital firms Rocketspace provides a source of potential investments, firms that have been vetted by Rocketspace management. For Rocketspace firms, the link to venture capital firms provides the access to venture capital firms that they might not otherwise reach.
3. Access to technology talent: No element has higher priority for start-ups than the technology talent, the high skilled programmers, marketing specialists, and social media/internet commerce experts who occupy Rocketspace. In close proximity, ideas, problem-solving, tech solutions, are shared, among the workers of different firms.
4. A high bar for Rocketspace participation: From the start, Rocketspace has been selective in its tech start-ups. To be considered a firm must have closed one round of financing, and show promise in growth. Today, Logan and Eryc Branham, chief revenue officer of Rocketspace, receive 30-35 firm applications per week to join Rocketspace. Of these applicants, 1-2 might be accepted as Rocketspace firms.
5. Participation of “corporates” at Rocketspace: Large established firms have been attracted to Rocketspace for the chance to be at the center of social media/internet commerce firm innovation. General Motors, NTT Docomo, and Pearson Media, all have small teams embedded at Rocketspace. Additionally, Rocketspace has links to 100 or so other major companies, who participate in the Rocketspace seminars and conferences.
It is an increased participation of corporates that Logan sees as part of the next evolution of Rocketspace, from accelerator to “open innovation” campus. Interaction between start-ups and corporates will increase, each refining its innovation strategies through interaction with the other.
Logan also has plans to expand Rocketspace, moving to a larger space on Sansome Street in the financial district in Fall 2013. Rocketspace graduates already are throughout the area: Podio, Kwarter, Kabam, Zaarly. As a guest leaves Rocketspace, he utilizes the Uber service to find car transportation. Uber also is a graduate of Rocketspace.