When they created their idea-generating incubator, Maria Gibbs and Dustin Mix didn’t know what to expect. But with their first class completed, the South Bend, Indiana program—itself little more than an idea a year ago— has resulted in new social ventures and founders who plan to put down roots in the Midwest city.
The incubator, called INVANTI, is for folks with a hankering to found a social enterprise, but no fully formed idea. Launched with a pilot in Sept. 2016, the goal is to help entrepreneurial wannabes research problems, pinpoint market opportunities not being taken advantage of and create companies aimed at addressing those issues.
Five people from around the country were recruited for the six-month program with the goal of digging into problems related to Americans’ financial health, ultimately creating four ventures.
The next class, scheduled to start in July, will focus on helping small business owners and family-owned businesses address the problems they face. The deadline to apply is May 21.
“We start by working backwards,” says co-founder Gibbs, pictured above with Mix. The first step is conducting a lot of research and interviews in the community to find out what challenges residents face. Then program mentors ask cohort members to imagine that the problem has been solved: Who would benefit and who would pay for it? That line of questioning, according to Gibbs, can lead to a viable value proposition for a potential business.
Each participant in the first official cohort, which kicked off in Sept. 2017, received a stipend—“enough to cover food and rent,” says Gibbs. Once they got past the idea stage, INVANTI also helped fund a prototype. Eventually, INVANTI will take an equity stake in the companies accepted into each cohort, but as now they do not.
Before accepting applicants, Gibbs and fellow co-founder Mix decided the focus would be on financial health. With that in mind, they did about six months of research, first talking to a variety of organizations working in the area of finance, then conducting “hundreds of interviews” with social service providers, community leaders and others in South Bend “to get the human side of trends we were seeing nationally,” says Gibbs.
Potential recruits, they determined, would be people with work experience, ready to start their own ventures, but lacking an idea. Four of the five applicants who ultimately were selected moved to South Bend for the program. Some had worked for startups, but were looking to form their own thing, others wanted to jump from the nonprofit world to for-profits, still others came through Gibbs’ Duke University’s network; she graduated from that school in 2012.
Once the program started, cohort members began the process of interviewing elected officials, community leaders, neighborhood associations and others to pinpoint problems they could address.
One participant, Jada Mclean, moved to South Bend from New York City, where she had recently launched a startup aimed at black hair care. During the research and interview process she talked to over 200 people and discovered that one particular issue came up over and over in her discussions: Houses worth $50,000 to $80,000 were just sitting on the market, despite demand among potential buyers.
What she learned was that banks generally lost money on such mortgages. That’s because they had to go through the same amount of work required for a much more expensive house, but could only charge a capped fee too low to cover the cost of writing the mortgage. As a result, they were loath to back such deals—so only buyers who could afford to pay in cash were able to make a purchase.
Another cohort member, John Gibbons, was also interested in the problem. So Mclean and Gibbons teamed up to start a company, named Hurry Home, to provide a way for renters to become owners of the houses they were living in. Investors buy the homes and buyers pay a monthly down payment, allowing them eventually to purchase the place for themselves. The company is gearing up for a pilot, aiming to place 10 families in homes by the end of the year.
As for South Bend, “It’s a cool place,” says Mclean. “This is all about revitalization and it’s great to see how committed everyone here is to that vision.”
With the program now over, all five cohort members are still working on their startups. “It’s an incredible outcome for us and not what we were expecting,” says Gibbs. “We were going to be thrilled if we got one venture out of this.”
The other surprise: Mclean isn’t the only one staying in South Bend: Everyone is. That’s thanks to the relationships they’ve built in the community, although the founders all plan to scale nationally at some point.
The next class, which is scheduled to start in July, will focus on helping small business owners and family-owned businesses address the problems they face. Eventually, INVANTI will take an equity stake in the companies accepted into each cohort.
Photo at top: Jacob Titus
Anne Field is a New York-based journalist who writes about social enterprise and impact investing. A version of this article originally appeared on her Not Only For Profit blog on Forbes.com.