WeWork will open the first West Coast location of its WeWork Labs startup incubator in Seattle next month, GeekWire has learned, underscoring the growing global prominence of Seattle’s startup scene.
The new incubator will be led by Elizabeth Scallon, who had been the director of University of Washington’s CoMotion Labs innovation hub for nearly five years. Seattle venture capital fund Flying Fish Partners plans to move its office there and help mentor startups.
The Seattle region has seen a spike in new co-working, incubator and other startup spaces in recent years, raising the question of whether the market is robust enough to support all of them. WeWork and Flying Fish executives contend that there is an “inexhaustible supply” of talented entrepreneurs that need resources such as incubators to get their ideas off the ground.
WeWork lists 14 locations on the WeWork Labs website, with more to come as part of a reported expansion. In addition to core WeWork services, Labs also provides mentoring and education, talent development and access to services like legal representation and human resources.
“It’s more of a curated, hand-holding experience for the startups,” Scallon said about the difference between Labs and traditional WeWork space. “It’s providing those resources so that they can succeed at a faster rate.”
WeWork Labs was first introduced in 2011, but hasn’t grown as fast as some of WeWork’s other initiatives and increasing focus on larger companies. Earlier this year, the company “re-launched” WeWork Labs with plans to expand, though WeWork wouldn’t talk about future growth beyond the Seattle location.
The reinvigorated Labs program is headed by Roee Adler, who founded five startups before joining WeWork in 2013 and taking over the initiative in February.
WeWork Labs differs from other accelerators and incubators in that it doesn’t take equity in the companies it houses, but it does charge rent. WeWork Labs adds an extra layer of support and programs to the company’s co-working model, said Gina Philips, WeWork’s Northwest general manager.
Startups get access to WeWork’s sprawling global network, and WeWork benefits by bringing companies in to its ecosystem early. WeWork Labs is not, however, just for really young companies, Scallon argues, as existing WeWork members or other companies that need some extra support can join as well.
The new WeWork Labs will open in October on one floor at the 1411 Fourth Ave. office in downtown Seattle. Overall, WeWork has taken 12 of 15 floors in the building. WeWork Labs will have 116 desks, including 14 private offices for members and six desks for Flying Fish.
Though WeWork would not name any startups working with Labs, the company did say it will focus on some of the technologies Seattle is becoming known for, such as machine learning, artificial intelligence, augmented/virtual reality, blockchain and more.
Flying Fish, which has so far raised close to $28 million and invested in nine companies, has an emphasis on AI and machine learning. It will help WeWork figure out what resources startups need, and Flying Fish will benefit from being close to these new companies.
“They thought having a VC co-locating would be a really powerful way to accelerate the growth of the companies in the program,” said Heather Redman, Flying Fish co-founder. “For us, anything that brings us close to great startups is really, really good. It’s kind of like having our own incubator or accelerator without having to pay for it.”
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WeWork is bullish on Seattle, and the upcoming Labs location is the latest example. The co-working giant is in the midst of a massive expansion in the Seattle area that will put its presence on par with other major hubs like Los Angeles and San Francisco.
Philips, who also previously led Seattle Startup Week, was a primary advocate for bringing Labs to Seattle. Investors are hungry to put more money into Pacific Northwest companies, she said, which are buoyed by a “dynamic relationship between enterprise companies and startups.”
That Seattle is the home of the first West Coast WeWorks Labs shows the city is “a hotbed for innovation,” Scallon said. The rare combination of some of the world’s biggest homegrown tech companies — like Amazon and Microsoft — a growing network of venture capital funds and angel investors, accelerators and incubators, a wealth of co-working space and the presence of the University of Washington make Seattle an attractive market.
But there is still untapped potential. Redman uses the old “tip of the iceberg” analogy to describe Seattle’s startup scene. The tip is the startup community, and the hulking mass under the surface is the city’s supply of talented, potential entrepreneurs working at big companies.
By building more resources for startups, WeWork believes it can chip away at that iceberg of talent. Seattle already has quite a few incubators and educational spaces for startups. Madrona Venture Group’s Create33 “founder center” is one of the latest examples, joining programs like Pioneer Square Labs, Galvanize, Impact Hub, UW’s CoMotion and many more.
Scallon says WeWork doesn’t see the world as a “fixed pie” and it wants to partner with other incubators and accelerators rather than compete with them. Redman, who is a long-time startup investor and former Getty Images executive, says Seattle can’t have enough incubator programs.
“Whenever we add a new resource for startups, whether that’s a new space, a new set of programming, or a new pool of capital, you see companies and entrepreneurs come out of woodwork to to be supported by that new ecosystem element,” Redman said.