Grand Central Tech is a bit of an anomaly in the world of startup "incubators," which usually give budding entrepreneurs money, mentorship, and connections in exchange for a slice of equity in the company.
GCT doesn't give investment or take a piece of its startups. Instead, it provides free office space in its coworking building in New York City for a year, plus all the "networking" elements, with no strings attached.
That's an amazing deal, and it proved compelling to over 1,000 applicants this year, 19 of which became GCT's third annual "class," which ranges from a startup that guarantees you'll sell your house in six weeks to one that wants to change how women think about their periods.
So how are these startups able to get offices for free?
The key to GCT's business model lies in a unique relationship with the billionaire real-estate dynasty, the Milstein family, cofounders Matthew Harrigan and Charles Bonello tell Business Insider.
The general idea is that by providing a year's worth of free office space to these young startups, GCT will be able to convince them to stick around and rent the other 40,000 square feet of its coworking building, creating a hub for hot startups. The rent in this second portion of the space is comparable to a WeWork, the founders say, and all the startups that have stayed in New York have opted to do so. The premise has proven sound in its first two years of operation.
But the truth is that for the Milstein family, GCT isn't a big money-making venture, and it's certainly not a cold economic calculation. GCT is an endeavor designed to bolster the New York tech scene, and it has one foot in philanthropy and the other in business.
The start
GCT's origins lie in New York's Regis High School, where Harrigan and Bonello met as students. Regis, like GCT, is free once you get in — in the school's case, an anonymous benefactor set up a system to allow it to run tuition-free.
Later in life, the pair were talking over beers about how to recreate that sort of model for businesses, and decided to try to run a tech accelerator at Regis during the empty summer months. They were able to set up the same "no rent, no equity" formula and even tapped recent grads of Regis for internships. The budding program caught the attention of the Milsteins' accountant, and the GCT cofounders were able to supersize the program to what it is now.
Because the startups in GCT are meant to strengthen New York's tech community, many of the startups have a social mission or an eye toward bettering some aspect of life. They don't have to all be trying to cure cancer, Harrigan says, but they certainly bend away from the frivolous. And they also tend to be companies that have taken some funding, as GCT is not in the business of providing that initial seed investment.
Here are a few of the standouts in this year's class:
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Knock
A standout in this year's class is Knock (formerly Knockaway), a real-estate startup from members of Trulia's founding team, which guarantees to sell your house at a certain price within six weeks. If the house doesn't sell in that time, Knock will buy it from you, and CEO Sean Black tells Business Insider they expect to buy 20-25% of the houses.
"About half of people are buying and selling [houses] at the same time," Black says.
Knock wants to take the inherent uncertainty out of the equation. Knock takes a standard 6% as a broker, but is able to offer this sort of price guarantee by using tech to cut out about 75% of a traditional broker's workload, Black says.
It's basically an insurance policy, Black says.
Knock is launching in Atlanta because of a few key factors like population and job growth, and job diversity. Black says Knock initially wants to choose its markets carefully, since by guaranteeing a certain price Knock is opening itself up to some risk. But Black says his team has already identified 49 other suitable markets for the startup in the US — though you won't see Knock in New York City or San Francisco anytime soon because of the high price of individual properties.
Monthly Gift
Monthly Gift, a subscription service for pads, tampons, and liners, aims to change how women think about periods — and make sure they're always prepared with enough necessary products. Users can design their own "Little Black Box"— complete with a chocolate bar — that is sent in accordance with their monthly cycle.
"The idea of the Little Black Box and the branding and having it feel more like a beauty product really stems from the idea of how do we change how women talk about this," Kimmy Scotti, founder and CEO, tells Business Insider. "We want to make it feel sexy and beautiful and not like a girl running on a box playing volleyball when she has her period, which is what we feel like store brands look like."
The company also designed a free app for period and fertility tracking, which Scotti and her sister LisaMarie Scotti, COO of Monthly Gift, say was the result of frustration with similar apps.
"One of the things we found when looking at the other period tracking or fertility tracking apps is that they're all really unattractive," Kimmy says. "These apps have things like condoms on bananas as their symbol for sex, and we're like, 'Who talks to women like this?'"
The company is currently accessible in all 50 states and aims to go international within the next several months.
Ohmygreen
If you want to build a healthier life for your employees, snack food is a good place to start, Ohmygreen CEO Michael Heinrich tells Business Insider.
Many companies view snacks as an easy way to keep their employees happy, but most snacks are processed junk. Ohmygreen's pitch is that it will step in and change that by selecting and stocking healthy food for employees.
Though the startup offers varying levels of service, Heinrich says 85% of its current customers are "fully managed," meaning Ohmygreen does all the work of getting them the food.
But food is just the entry point for Ohmygreen, Heinrich says. The eventual goal is to have Ohmygreen facilitate a healthy life for employees overall through things like yoga, meditation, or athletic health goals. The company is in the process of developing its "holistic model," he says.
It should come as no surprise that Ohmygreen's early clients have tended to be tech companies, but Heinrich thinks there is a greater market for his type of service as companies realize the effect health and wellness can have on their workers.
See the rest of the story at Business Insider