Fishbowl Labs, the business incubator hosted by AOL at its Dulles campus, is accepting applications for a second crop of start-ups, but this time the young companies will have a higher bar to clear before they’re accepted.
Perhaps the biggest change is that the firms will need to have raised at least $250,000 from professional investors, a significant hike from the $25,000 that the first class of companies needed to have in their coffers.
The changes come as Fishbowl Labs enters its second year and the organizers say they’ve learned more about how to best structure a successful incubator inside a larger corporation.
More companies are pursuing the idea as they look to stay on top of the latest technologies shaping their industry or to get an early look at young firms that could become potential investments or acquisition targets.
The AOL program was designed in part to reinvigorate the innovative atmosphere that once existed at the Internet company before its ill-fated merger with Time Warner and recent struggles to reinvent itself as a creator of online content and advertising.
“A lot of our focus when we started it was really a cultural initiative,” co-founder Fletcher Jones said. “The idea was to bring entrepreneurial spirit onto the campus with the hopes it would rub off on folks working at AOL.”
To that end, Fishbowl Labs will establish a mentorship program that uses AOL employees whose everyday responsibilities are relevant to their partner start-up, rather than mentors who provide generic guidance.
Jones said that keeps employees at AOL engaged with start-ups while also providing the young companies with more helpful advice. Fishbowl Labs focuses specifically on Internet and mobile companies, rather than those in vastly different industries, such as health care or government contracting.
“To create the most demand [the first time], we really advertised free space, and what I think we learned over the course of the year is it’s not really about free space, it’s about the expertise we have here at AOL to provide,” Jones said.
Increasing the investment requirement for companies also serves to weed out those entrepreneurs whose ventures may be a side project rather than a full-time business, he said.
“Folks who fell into that category, Fishbowl Labs wasn’t going to be their primary office,” Jones said. “They weren’t going to be able to take advantage of everything we have to offer and contribute to the community we’re trying to build.”
Fishbowl Labs accepted 12 companies as part of its inaugural class, and about half of those firms remain. Jones said they’ll look to take at least as many this time around, though there’s always the potential to add others.
“We have unlimited space for great companies. Right now, we have room for more, and I don’t think we know exactly what the magic number is going to be,” he said. “I think it will be at least that many and likely more.”
Start-ups are given free office space and resources at AOL’s Dulles campus and access to its staff. However, unlike other incubator and accelerator programs, AOL does not make an equity investment in the firms, Jones said.
The biggest benefit to AOL has been greater exposure in the region’s burgeoning entrepreneurial community, Jones said. AOL has repeatedly used Fishbowl Labs to host events that bring local tech enthusiasts to their offices.
“There was a point in time where everyone in the D.C. region was aware of AOL and aware of our headquarters in Northern Virginia,” Jones said. “One of the things that Fishbowl has allowed us to do is ... bring people out to AOL and allow people to see that we have 1,000 people out here working on the Internet.”