Business case study: Industry Lab is an incubator where the innovation includes arts and sciences
Industry Lab is home to a dizzying array of talented tenants: a young singer, Anjimile, who records folk songs; filmmakers; startup robotics and medical device companies; a law firm expert in intellectual property; a graduate student doing research; and software developers, to name a few.
Industry Lab is one of more than a dozen coworking and incubator spaces in Cambridge, operations largely invisible to the public yet vital to Greater Boston’s success in fostering innovation in fields such as biotechnology, robotics and 3D printing.
The Massachusetts Institute of Technology alone produces 450 startups each year, and Harvard’s Innovation Lab (i-Lab) serves more than 500 students annually, the universities report. Coworking spaces give them somewhere to go and grow. Formlabs, a maker of 3D printers, was started by three MIT students renting space at Industry Lab more than a decade ago, for instance, and now has its own offices in Somerville and 500 employees in more than a half-dozen countries.
Founded in 2011 at 288 Norfolk St., in the Wellington-Harrington neighborhood, with enough space for about 130 people, Industry Lab recently added a building at 1280 Cambridge St. that will eventually house 100-plus more closer to Inman Square. Industry Lab manages about 17,000 square feet in each of the century-old brick industrial buildings.
Inside the Norfolk Street building are desks, conference rooms, kitchens on every floor, whiteboards, sculptures, paintings, laser cutters, 3D printers, robots, a small foam-lined anechoic chamber that serves as a recording studio and sometimes as a space for meditation, event spaces and a well-equipped machine shop available to all tenants. The second building will soon have a library. Tenants range from freelancers to companies that employ as many as 25 employees. Some spaces are private, but most occupants work in large rooms, sharing space with others.
Growth of Industry Lab
In 2009 Andrew (AJ) Meyer and three colleagues started a company called LeafLabs while they were at MIT. Meyer founded Industry Lab in part because the LeafLabs team graduated, and the company needed space. LeafLabs, which develops hardware and software for specialized computer applications, is now a multimillion-dollar business with 25 employees.
Meyer decided to add a second building to IL because he found that as companies grow beyond about 10 employees they have different needs. The building at 1280 Cambridge is designed for that, Meyer said, and now includes LeafLabs, Pickle Robots (the second of Meyer’s technology startups, also with 25 employees) and a few others. The landlord, Nai Nan Ko, became a partner.
Working at Industry Lab
Meyer believes the collegiality and sharing of ideas that happen in spaces such as Industry Lab are important to support a community and for innovation to flourish. Many long-lasting friendships have formed among its tenants, he said, and many creative ideas have taken shape based on the connections made there, including a multimillion-dollar engineering project that at one point involved more than a quarter of the tenants. Community-building events were sponsored by IL almost weekly before the pandemic. Industry Lab’s website also promotes its community by providing information about dozens of current and past tenants, representing more than 700 occupants.
Another belief of Meyer’s that differentiates Industry Lab from other coworking spaces in Cambridge: People in the arts and technology benefit by spending time with one another. Artists have been among the tenants from the beginning, and created the works on display. Justice McDaniel, who manages both buildings, was first affiliated with Industry Lab through its artist-in-residence program, working rent-free and mounting a show of his work there.
Another distinguishing characteristic is that Meyer interviews prospective tenants and curates the space, renting only to people he trusts and aiming for diversity in the work they do. There are no lockers; tenants commit to respect one another’s property.
Tenants – or residents, as Meyer sometimes calls them – are given latitude to paint walls, drill holes or make other changes to space they rent, so long as they respect building codes and common sense. “You should not feel precious about the building. You are here to do whatever it is you are going to do, and if you want to draw on the walls, fine,” Meyer said during a Feb. 1 visit. It’s an approach he said he learned at MIT’s Building 20, an incubator space built as a temporary structure during World War II where occupants had latitude to make changes to fit their needs.
Many entrepreneurial spaces in Cambridge have close connections with MIT, the city or venture capital; Industry Lab and a few others do not. As a rule, prices are generally low at IL – more affordable to people and companies without venture capital. Tenants can rent just the space they need. At the low end, rates including all the amenities are $487 per month for a “full desk” and $336 a month for a smaller space with a “coder desk.”
Industry Lab as a business
The pandemic, when so many tenants were unwilling to spend time indoors with others, was not good for Industry Lab’s business. The availability of vaccinations helped, and the business is recovering.
A very high rate of occupancy is needed for coworking businesses to make a profit, and leasing and re-leasing provides thin margins at best. In fact, Meyer said, “coworking is a terrible business.” He watched the company WeWork grow to hundreds of locations in dozens of countries and became a focus of attention for investors, thinking it would be a major flop, he said. That it was – at least before the overseas investor SoftBank bailed it out – becoming the subject of critical articles, books, documentaries and even an upcoming dramatized television miniseries.
“I don’t mind telling you that we have not made any money to speak of with the real estate,” Meyer said. Yet he is not sorry that he started Industry Lab and, during a pandemic, decided to expand. The startups LeafLabs and Pickle Robots “would not exist without Industry Lab and the social network that helped cultivate those companies.” Multiple tenants express similar sentiments.
Meyer values talented people and the work they do. “For us,” he said,” the return on investment has always been the community value.”