Business Incubator opens in Latvia

First in the Baltic region to focus on the creation of new businesses

The Stockholm School of Economics in Riga (SSE Riga) announced the opening of its Business Development Laboratory (BDL), the first facility in the Baltic Region to focus entirely on the creation of new businesses, on May 15, 2003. The purpose of the BDL is to boost the local economy by helping Latvian entrepreneurs develop new business ideas into growing, profitable enterprises.
Two Types of Projects,According to Dr. Anders Paalzow, rector of SSE Riga, the new laboratory will accept two different types of entrepreneurial projects. "The first, and more obvious type, is the startup company, in which case we will help entrepreneurs or entrepreneurial teams develop raw ideas into viable business models. The second type, perhaps not so obvious, is the spin-off company. Here, we will help existing businesses find new applications or markets for well-established products and services."
Key Element: Brainpower,Housed on the 6th Floor of SSE Riga's main building, the new facility will offer physical workspace as well as standard office resources--desks, files, computers, Internet access, telephone, FAX, etc.--for those working on accepted projects. But according to Dr. Michael Wells, a successful American entrepreneur hired to set up the BDL, the key element is brainpower.
Wells says, "Experts in the field of entrepreneurship cite a number of different reasons for the high failure rate of new business enterprises--'inadequate financing,' 'no real need for the product,' 'misunderstanding the target customer,' 'failure to meet market demand,'. . . you name it." But he says that upon closer inspection, all these reasons amount to the same oversight: a failure to fully develop the business idea before actually launching the venture.
Wells knows this basic reason for failure all too well. Although the IT company he founded in the 1980's was eventually listed as one of the 500 fastest growing companies in the USA, this was not before several close brushes with bankruptcy. "Our early problems were typical," he says. Almost all of them were the result of a lack of proper analysis and planning." He says that the main goal of the BDL is to help entrepreneurs avoid these kinds of mistakes so that their chances of success are as high as possible.
Team of Business Mentors,As the BDL is housed in an academic setting, naturally a wealth of theoretical business knowledge will be offered by SSE Riga professors, students, and the school's 600+ alumni. But the BDL will also practical knowledge. A team of business experts, similar to Wells but who have direct experience in Latvia and the Baltic Region, has been assembled to serve as "mentors" to budding entrepreneurs. Some of the most successful business minds in Latvia, covering a wide range of industries, have agreed to serve, such as Ieva Plaude, founder and chairman of the cosmetics firm Kolonna and many others.
I. Plaude, of Kolonna, said "We're all very excited about working with the Business Development Laboratory--it's a chance to share what we know with other Latvian entrepreneurs and to stimulate the economy"
Under the scrutiny of all this accumulated brainpower, projects accepted into the lab will undergo intense development. "All the difficult questions will be asked," says Wells. "Does a real need exist for this product or service? Will people actually pay for it? If so, how much? Can a profitable business be built around it?"
Wells says that the BDL provides an ideal environment to find the answers to these questions. "Here, we can do things like test out the product or service on a handful of real customers and see if it satisfies real needs. We can find out how much capital is required and at what point the business will break even. We can even operate the company on a very small scale see if it works in the real world the way it is supposed to on paper." He says the most important thing is to test the idea as much as possible before any serious risk is taken, financial or otherwise. "This is the key to maximizing the chances of new business success."
Project Submission & Acceptance Guidelines,The BDL will review and accept projects in two different ways, depending on the type of project. In the case of startup projects, a Startup Idea Form must be submitted, which is available, along with detailed submission instructions, on the SSE Riga website (http://www.sseriga.edu.lv/BDL) A review committee will meet on a quarterly basis to determine which startup projects will be accepted into the lab. Startup project ideas may be submitted by anyone living in Latvia.
For spin-off type projects, the submission/acceptance procedure is more flexible. Businesses with ideas for projects should submit a Spin-off Project Form (also available from the website). As such projects vary widely in nature and scope, BDL staff will meet weekly to decide which projects are acceptable. Descriptions for selected projects will then be posted so that SSE Riga staff, students, and alumni can learn about them and inquire about participation. Companies submitting such projects should be prepared to remunerate participants either with pay or an equity stake in the project. Spin-off projects may be submitted by existing companies both inside and outside of Latvia.
The BDL has been initially funded by the Stockholm School of Economics. As the BDL expands, further funding will be sought from other public and private sources.
For more information, contact Dr. Michael Wells by email: [e-mail], or by phone at ([phone], mobile [phone].

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Latvia