The Savvy Entrepreneur features The Hatchery, Chicago’s incubator focused on food & beverage startups, and how they help their members.
Nathalie Shmulik is The Hatchery’s Chief Strategy & Incubation Officer. She’s a go-to resource for launching a successful food and beverage business. She has owned & operated her own restaurant, and has spent several years working in the food & beverage industry, where she’s a recognized leader.
She shares how and why The Hatchery was founded. She talks about how Chicago has long been a hub for new food and beverage businesses.
She also explains the services offered by The Hatchery, including shared kitchens, 54 private kitchens, classes, co-working spaces, mentoring, and access to funding and subject matter experts, as well as The Sprout accelerator program.
The Hatchery currently houses about 100 companies producing onsite, but supports in other ways another 100 food & beverage companies. Although The Hatchery is relatively new on the Chicago entrepreneur scene, it has already helped launch several successful businesses.
And along the way, they have created an amazing sense of community. That shines through in interviews with past guests on the show, including DoWell Brands, Lus Oasis, Amie’s Krisps, and Kavnia Coffee. And, The Hatchery remains committed to being an integral part of the diverse neighborhood where they are located.
The following is a transcript of our chat. But you can go here if you’d prefer to listen to the original interview.
Doris Nagel 0:09
Good morning, all you entrepreneurs and small businesspeople! You are listening to The Savvy Entrepreneur Show. I’m Doris Nagel, your host for the next hour.
The show has two goals: first, to share helpful information and resources. I have made so many mistakes as an entrepreneur over the years. I have seen clients and friends make lots of mistakes. So if I can help just one of you out there not make some of those mistakes, then I’ve been successful.
The second goal of the show is to inspire. I found that being an entrepreneur is confusing, often lonely. Sometimes you have no idea if you’re on the right track or not, or where to turn for good advice.
So every week on the show, I have guests who are willing to share their stories and their advice.
And this week’s guest is Natalie Shmulik. She is the Chief Incubation and Strategy Officer for an organization called The Hatchery, as well as something called ICNC, and she’ll talk about both.
The Hatchery is an incubator in Chicago that focuses on food and beverages. We’ll hear the story of how The Hatchery got started, what it offers for clients, and some things to think about for people who might be interested in becoming a part of The Hatchery.
Natalie, welcome to The Savvy Entrepreneur Show. Thanks so much for being with me today.
Natalie Shmulik 1:45
Thanks so much for having me. I’m excited to dive into some fun topics with you.
Doris Nagel
Me too! Especially because I have had several guests on the show who have been a part of The Hatchery and each of them have raved about it. And we’ll get into that.
But first, when and why was The Hatchery founded?
Natalie Shmulik 2:14
The Hatchery was really developed out of a true need that we saw within our community. As you mentioned, ICNC stands for Industrial Council of near West Chicago. They’re one of the oldest and largest business incubators in the country. They oversee two incubators. One is Make city which is an industry agnostic incubator. That facility is 416,000 square feet!
Doris Nagel
This is not small!
Natalie Shmulik 2:43
It is not!
It houses 110 companies, all of which are enlightened manufacturing.
Some very impressive brands have come out of there. Farmers Fridge has their offices there. There’s four major coffee roasters, and Rhine Hall Distilleries. There’s also incredible haircare, beauty, and personal wellness companies –all kinds of great brands.
ICNC realized over the last several years that there was a need for food and beverage production space, because more and more food and beverage entrepreneurs were coming to them.
Unfortunately, that building is not ideal for food and beverage production. It is an old plumbing foundry. It would be very costly to build out a food grade space there. So as entrepreneurs came to that space, they would either invest a significant amount of dollars into building a food grade space in what is meant to be a temporary space, or they would walk away knowing that it’s just a little too much capital. And that’s unfortunate, because that’s one less entrepreneur we’re able to support.
So ICNC partnered with Allies for Community Business, which was previously known as Accion Chicago. They are a nonprofit micro lender, and they specifically provide those small business loans to those entrepreneurs who need to invest in building out their food grade space or invest in equipment, whatever it might be.
Allies is such a great organization because they really focus in on entrepreneurs who need the capital, very much homing in on food and beverage entrepreneurs, BIPOC and women-owned businesses. Not looking at credit scores, but ultimately at the entrepreneurs themselves and the viability of their business to provide that capital.
So six years ago, The Hatchery launched as a virtual incubator. The intention was to better understand the needs of food and beverage entrepreneurs. We did feasibility studies; we spoke to entrepreneurs directly.
We started launching programming and getting feedback. And all of that helped truly pave the way for what The Hatchery is today.
Three years ago, we opened our 67,000 square foot facility on the west side of Chicago in East Garfield Park. That was very intentional. We wanted to be in a community that we felt we could truly support and be a part of.
A lot of times the commercial kitchens are shared kitchens, and they tend to be in densely populated areas. And those services are generally inaccessible to other neighborhoods.
But we saw so many entrepreneurs on the West Side with innovative concepts, but not having the resources to really be able to launch and grow their businesses. So we wanted the facility to be here in East Garfield Park. It is a traditionally under-invested neighborhood, with some of the highest unemployment rates.
But with a combination of the support we provide to the entrepreneurs as well as a workforce development team who supports job seekers, we saw it as truly a natural fit. So we are now housed here at Lake and Kedzie in East Garfield Park.
Onsite, we have a large, shared kitchen where entrepreneurs get their star. We also provide additional support to Westside residents. We offer 34 hours of free shared kitchen time per week to Westside residents in addition to free membership and free access to our programming.
That eliminate some of the barriers that often get in the way of entrepreneurs getting their start. We really wanted to provide that opportunity.
Doris Nagel
That’s pretty neat. Because that way, you also get the community involved. You’re not just a facility that sits there that they walk by and wonder what happens there. It’s part of the community.
Natalie Shmulik 6:22
Exactly. And that’s something we constantly have to work on. Because there are still people who will walk by our facility and go, “Wow, that’s a big space! What happens in there?” It’s amazing the number of Lyft and Uber drivers who I’ve talked to sitting in their cars, telling me they have a food business, or their cousin who has a food business. We love those kinds of interactions.
A big goal of ours is really to immerse ourselves in the community, to learn from the community, and to be able to provide those services here.
To help with that, we have a big plaza out front in The Hatchery, where we host the Garfield Park Community Council’s neighborhood market. And that’s a really nice way for us to get the information out there to the community as well.
Doris Nagel
It definitely is!
I’m a SCORE mentor — at least I was until recently. And SCORE always has a number of food and beverage clients, or clients who are interested in starting a business in that space.
But I’m embarrassed to say I’m not sure that all of the SCORE mentors even know that The Hatchery exists to refer clients there, which is unfortunate.
Natalie Shmulik 7:32
There’s always more we could be doing to spread the word.
Hopefully all the listeners today can check out our website, tell their friends and tell individuals who want to give back. We certainly want to expand our platform and our reach.
Our focus is very much on Chicagoland food and beverage entrepreneur. Every now and then we do get requests to franchise or open a satellite location out of state. But that’s not quite our goal. We’re always here to help others who want to launch similar concepts.
But we are very, very focused on the Chicagoland market, because there’s so much talent here. And there’s so much opportunity. And there’s always more that can be done to help spread the word and let people know we’re here.
Doris Nagel
Chicago has always seemed to me kind of a food and beverage hub.
Is that accurate, do you think? And if so, why is that?
Natalie Shmulik 8:25
I would say it’s very accurate.
I think that’s been a big topic of conversation at a lot of recent events, including the Chicago Venture Summit. I think being in middle America has always played a big role, certainly from a distribution standpoint.
But then you have all of these major consumer packaged goods brands that are headquartered here in Chicago or in close proximity. So there’s this sense of collaboration and connection making and having the resources all nearby.
And there’s so many success stories that have come out of Chicago in the last several years. Some iconic brands have come out of Chicago, and then we’re also seeing some of the more recent ones who’ve had great success, which is inspiring.
There’s also that Midwest feel and where people want to help each other. So I agree, I think that’s very much the case with Chicago.
Doris Nagel
Where did the funding come from initially to start The Hatchery?
Natalie Shmulik 9:24
The project was funded partly by the City. In terms of land acquisition and access to the land that we’re currently on, 1/3 actually came from foundations and corporate partners. We have some incredible corporate sponsors, and foundations who believed in us from the very beginning — before there was ever a facility and it was just a dream that we would tell people about. But it seemed to resonate with quite a few individuals and companies.
We were also able to get some funding to help cover the costs for the build out. And the final 1/3 is actually debt. ICNC and Allies for Community Business believe in the mission so much that they took out a loan themselves in order to be able to build out The Hatchery and build out the services that we now provide.
Doris Nagel
Fantastic!
You started to talk about some of the services and support that you offer. Talk a little bit more about that, as well as the business model that you use to bring in revenue to continue to provide those services.
Natalie Shmulik 10:39
The primary goal of The Hatchery is really to provide access to affordable production space, as well as access to financing and resources.
But over all of that is a supportive community and ecosystem, which we strongly believe in. I think you mentioned right at the beginning, — which resonates with me – is that being an entrepreneur can be very isolating. It can be very lonely/ There’s a lot of uncertainty.
So having peers in the space who are going through the same thing or have overcome some of these challenges is extremely beneficial. It helps just in terms of building morale, to have the confidence and knowledge to move forward, to be inspired to hang on to the passion that you have and understanding why you’re in this.
Because it is not an easy space to be in. And it’s certainly not an easy industry.
We also provide that production space at or below market rate. We spend a lot of time interviewing the entrepreneurs we work with before they come onsite, just to make sure that they are ready as well, that they understand what’s expected of them, how to make sure that they can fit into the community very well.
We have our shared kitchen and our 54 Private kitchens. But we also have co working and event space and offer a full curriculum.
We typically start with our “Starting a Food Business” class, which we run monthly. And that’s open to everybody. That includes anybody who’s interested but not sure what it is they want to do, those who just want to learn more about starting a food or beverage business, or somebody who’s just launched or about to launch.
It’s a great class. And that’s something we do monthly.
And then we have our Sprout program, which is a pretty unique program. It’s a six-month accelerator for startups. And we launched it is because we initially found that for many entrepreneurs, they were waiting until their concept was perfect to launch.
Doris Nagel
Yes, I definitely know some of those people!
Natalie Shmulik 12:36
And so we use Lean startup methodology. That’s very important, because oftentimes, we entrepreneurs are perfectionists. And unfortunately, the reality is you can spend years and years perfecting a concept.
And then when you launch to market, somebody says, ah, you know, this isn’t quite my taste, or I’d like it a little bit more this way, then you have to redo all your packaging, all of your formulation, and you basically have to start from scratch.
So we try to prevent that from happening.
And the way we do it is with this Sprout program. In it, entrepreneurs get all of the information they need to legally produce and sell. That includes everything from insurance, to registering your business entity, to working with Department of Health, to getting all of your food handlers completed. And then it goes through branding, customer analysis, market sizing, getting into the shared kitchen and starting your production.
And at the end of the six months, you have to launch to market in order to graduate. So it doesn’t have to be perfect. The i’s don’t need to be dotted, the t’s don’t necessarily need to be crossed. But you have to get your concept to market.
And we do it with a final graduation, where we have members of our team partners –investors who all sit down at the table. They try the product, they hear a pitch from the entrepreneur, and then they provide feedback.
So immediately these entrepreneurs get real world feedback, and then they can determine themselves at the end of the six months to move forward, or decide it isn’t for them, which is equally a success. Because the last thing we want to do is force somebody into building out a business concept that isn’t viable, and then investing all of their time and energy and money into that.
So we see both options as a huge success.
And from there, we’re able to continue supporting the entrepreneurs who want to move forward. And for those who don’t, we can help look at other career opportunities, working with an existing brand or seeking something else. So it’s a great opportunity to provide that kind of support.
Doris Nagel
Is there a separate charge to belong to the six-month incubator program? How does that work?
Natalie Shmulik 15:00
Yes, there are different prices, depending on the entrepreneur and their backgrounds. Ultimately, we seek to create more diversity, equity and inclusion in the industry.
Westside residents have access to free hours within the shared kitchen, and the other resources are free if they move into a private kitchen. We work closely with them to have a scaling system.
For other entrepreneurs, again, we work to provide below market rates. So there’s different hourly rates in the kitchen, depending on whether it’s packaging, or if it’s intensive production. It starts at $10 an hour, and it can go up to $50 an hour, there’s no minimum.
So entrepreneurs can really just use the time that they need. And then when they move into a private kitchen, depending on whether it’s a standard or a large kitchen, they’re signing a year lease.
And again, we work closely with them to make sure that we understand their financial projections and are sure that this is something that they’re ready for. We typically take a close look to make sure that they can afford the kitchen space, because the last thing we want to do is have an entrepreneur go into debt.
Our preference is for them to stay in the shared kitchen until they’re truly ready and have the right revenue streams to be able to then grow their business in a private kitchen.
Also, we have some corporate partners who are on site, too. We have some ideation from Ingredion, Griffith Foods, Kellogg’s, and Synergy Flavors. They provide additional support and services to our members. Often, it otherwise is very difficult to find food scientists and the kinds of ingredients you need.
Doris Nagel
Even people who know about packaging, which I suppose is a whole world unto itself?
Natalie Shmulik 16:50
Oh, yeah, you can really get into the weeds once you start down one direction. The learning just keeps going and going.
So it’s amazing to have that kind of expertise and those resources on site. Nelson from Ingredion has this kind of open-door policy. So entrepreneurs will knock on his door and say, “Hey, I’m really trying to extend the shelf life on this product,” or “I want to reduce the sugar here,” and he will sit with them and work through the process and try to find solutions for them.
Doris Nagel
Very cool.
I will say that most of my past show guests who have been at The Hatchery, at least at some point, have all commented on the camaraderie and the sense of community. They’ve referred me to each other as guests. And each of them has said, “Oh, you need to talk to so and so and so on. They’d be great.” And you can just tell that there’s a sense of community.
What’s your secret for fostering that sense of community? Because it’s a little unlike anything I’ve experienced with other incubator and accelerator participants.
Natalie Shmulik 18:09
Well, first of all, I love to hear that our members are really vouching for each other and advocating for one another. We would be nothing without our members. And we’re inspired by the entrepreneurs we get to work with every day.
But that community or ecosystem is so important to who we are, that camaraderie that you mentioned. We take a very holistic approach to supporting entrepreneurs. We can provide all the technical resources in the world, and it will not dictate whether or not an entrepreneur will be successful.
We really want to showcase the personal traits, the soft skills, the leadership skills. We want to make sure that entrepreneurs are setting themselves up for success and understanding what they’re taking on.
And so sometimes that means understanding how to take care of yourself as an entrepreneur, understanding how to leverage resources by working and partnering with others, understanding how to build strong company culture and a strong team.
So we do spend a lot of time trying to connect our members to one another because we probably learn more from them than they learn from us. And that’s something that we want to share with the whole community here: we can’t be the keeper of all of the resources and information. There’s so much talent, there’s so much know-how here.
So we do our best to make sure that the entrepreneurs are connected. We have monthly town halls where every entrepreneur that works out of The Hatchery connects, and they get to hear updates. They get to hear success stories; they get to exchange resources.
Somebody might say I worked with this great broker, or I didn’t have a great experience at this place. And they get to hear from one another. And to your point earlier, they get to avoid some of the mistakes that others have already made.
That’s where the real benefit of having this facility and having this community comes in. Because we do take the time to make sure that the entrepreneurs are engaged. Nobody benefits if they hide behind a door, and they’re just producing their product. But everybody benefits with information sharing and just knowing that you have a supportive individual that you can talk to whenever you need to.
Doris Nagel
It was clear to me in listening to people talk about The Hatchery that they all looked to their fellow Hatchery company participants – to each other — as a source of inspiration and encouragement and just supporting them through tough times and giving them ideas to keep them going.
It’s clearly a very valuable aspect of The Hatchery to a lot of companies who belong there.
Natalie Shmulik 21:00
Yes, and that’s exactly what we hope for. There’s nobody better to listen to than someone who’s been there and who’s done it.
It’s so nice to know that there are individuals out there who are going through the same thing, or have gone through the same thing. And it’s much easier to take advice from them.
And a lot of programs out there are being presented by individuals who maybe don’t understand what it’s like to be an entrepreneur. You yourself bring such a unique perspective, because you understand the world of entrepreneurship.
I’m also an entrepreneur. I’ve owned my own restaurant. So I know exactly how difficult it can be. And sometimes you feel like you’re speaking a different language. So to know there’s a whole community of individuals who speak the same language is hugely valuable.
Doris Nagel
I’m sure it is.
You mentioned that you often chat with the potential entrepreneurs before they join The Hatchery community. What kind of companies are you looking for to join The Hatchery. What kind of traits make companies most likely to be successful there?
Natalie Shmulik 22:13
We’re currently focusing a lot of our efforts on consumer-packaged goods. However, we do have a lot of catering businesses and meal delivery food trucks. We don’t specialize as much in food service, and specifically the restaurant world. There’s amazing resources out there already [for those segments].
We’re really trying to bring in even more Westside residents. We want to make sure that whoever can benefit from our resources here does so. And right now we’re trying to get into the community more, letting people know we exist, letting people know there’s services available to them.
Again, we’re focusing very much on consumer packaged goods, but we actually do have a kitchen pitch contest going on now through the end of this month in partnership with Midwest Dairy. So for entrepreneurs who have innovative concepts using dairy, they have an opportunity to apply and can win six months of free private kitchen space, which is a huge opportunity.
We definitely encourage people to check out the pitch competition and apply. It’s open through the end of June, and then we will be selecting the finalists. And then there will be a pitch session for the top five.
And we usually have a kitchen pitch contest every year. It opens up the opportunity to someone with a really unique, innovative concept.
In terms of entrepreneurial traits, there are a few. We look for individuals who are very collaborative. We understand that everyone has an idea that they want to keep close to their chest.
Doris Nagel
I shouldn’t laugh, but I do this. Because I’m a lawyer by training, and I think those issues are way less of a concern than a lot of other things that entrepreneurs need to worry about.
Natalie Shmulik 24:16
Yes, you’re right. But still somehow it shows up. And I’m sure you’ve seen, too, a lot of times, that right from the beginning, everybody wants to throw NDAs out there and insist they be signed.
But investors will say that and any individual that wants to help. But if you’re not going to share information and everybody needs to go through paperwork, you’re not going to get much help there.
So we certainly look for that openness. You don’t have to reveal all your trade secrets. But that’s why we spend more time talking about the importance of branding and how to create a unique brand, how to differentiate yourself in the market, how to protect yourself that way.
So one of the first things is really being able to collaborate, being interested in collaboration, being interested in learning, and then a true commitment. Because there are a lot of times entrepreneurs will come to us when they’re in the very early stages, and they still have a full time job, and they have to be able to live.
And that’s completely understandable. But we do look for that commitment. So wherever you are, whatever you’re doing, we want to make sure that you’re really investing time into testing out the business and being receptive to feedback. It’s also understanding that there will be changes, the brand will evolve over time.
And sometimes, you also have to know when to walk away. That’s something we’re spending more time on is learning and understanding how to effectively review the business and know when to walk away.
We’ve been interviewing a lot of entrepreneurs who did close their businesses, and the number one piece of feedback I hear from all of them is that they wish they had done it sooner.
It’s difficult. It’s like your child, and you have to now put it away, even though you’ve invested so much time and energy.
But that’s not a failure. That’s so much learning. That’s really a great success. And knowing when to step away from it is really, really important, because it’s not easy.
Doris Nagel
It’s interesting, you say that. One of the biggest and most challenging questions that I have faced as an entrepreneur is whether it’s time to pivot, or whether it’s time to just throw in the towel, or whether it’s time to just wait just a little longer for that big break.
There are certainly stories out there – entrepreneurs who are down to their last box of MacNCheese. And lo and behold, the big client walks through the door, the transformative event happens. And so this was a testament to holding out just a little while longer.
And then you read a lot about pivoting. I guess you can debate about what pivoting really is and when you should pivot.
There’s also times to throw in the towel, because your idea isn’t working, or no longer is working, or you pivot too late. And you don’t want to wait too long. My old neighbor mortgaged his house, he mortgaged everything, and he lost his house. He was waiting for a ship to come in, and it never came in.
In that case, it’s pretty clear he should have either pivoted or just exited a lot sooner.
But I think it’s really tough when you’re in the middle of things to really have the clarity to know which is right.
Natalie Shmulik 27:45
It’s true. It’s very difficult. I don’t think anyone has a clear answer.
I think the most important thing for every entrepreneur is to check in with yourself. If you feel that you are now sacrificing more than you should your mental health, your well being house, your house… well, that might be a good time to step away.
And even if you step away from a project or a business, it doesn’t mean you can’t come back to it. Maybe it just the time wasn’t right. We’ve heard many stories about people being ahead of the time. If they just launched four years later, it would have been a top trend.
But it’s hard to know. And I think the only way to truly evaluate whether or not to pivot to close up shop or to hold on a little longer is to really check in with yourself as an entrepreneur and trust your gut as much as possible.
It’s rare that anybody will fully regret it. Waiting might be a little bit tricky, because then you’re kind of waiting forever at times. And sometimes it’s a matter of luck.
Also, I think if you really start to feel that passion fading. if you don’t have that flame anymore, and now you’re suffering, it’s probably a good time to walk away.
Doris Nagel
Great advice.
Nathalie, what’s the process for becoming part of The Hatchery? How would people go about learning more? Is there kind an application process? Talk a little bit about that.
Natalie Shmulik 29:21
The best way to get started, especially for entrepreneurs thinking about diving into the food and beverage space, is our “Starting a Food Business” class. It’s listed on our website, thehatcherychicago.org, under Events. We run it monthly. So if you miss this month, there’s going to be one next month.
But that’s a really great way to start. It’s a two-hour session where we cover everything from the industry landscape trends, choosing the right business entity, branding, introductions, and then going through all of the production and certification components. So it’s a great entry point.
From there it isn’t free. It’s free to Westside residents, but costs $40 for non-residents, okay. So very approachable. After they sign up for the class, people receive an email with a lot of information in terms of check sheets. They get a whole rundown with hyperlinks on where to register, and how to get the deck. So there’s a lot of information there.
But the presentation itself is very fun and interactive and interesting. It takes you through the world of food and beverage and where we’re coming from and where we’re going. So we love those classes. And we usually have a very good turnout. We get anywhere from 30 to 50 entrepreneurs joining that session every month.
We get to hear so many new ideas. So it’s fun for us as well because it also allows us to think about where new entrepreneurs are moving.
I always think entrepreneurs in this space, especially early stage entrepreneurs, sit in this middle point. They themselves are consumers who have seen a gap in the market, and are now trying to solve it as entrepreneurs. So that puts them in a very unique position.
We’re also able to track a lot of trends utilizing that information and data along with big data from some partners like IRI and Mintel that we work with. So that’s a great starting point.
We also have an application for our Sprout program, as well as blue membership. That’s all on our website.
For those looking for production space, there is an application on our website. Once you submit it, our team will connect with you, talk through your needs, make sure that it’s the right fit for you.
And then anyone who wants to get involved on the other side of things, whether it’s they want to give back, they want to teach a class, or they want to do a coaching session. We also have a section on our website for partners who’d like to just be more involved and support our community here.
Doris Nagel
How many companies typically at any one time are part of The Hatchery?
Natalie Shmulik 32:01
We currently have 100 companies producing on site. So wow, you and then within the overall organization, we support about 200 Food and Beverage entrepreneurs.
Doris Nagel
That’s incredible.
How long did companies tend to stay part of The Hatchery before they either decide this is just not going to work, or they’ve grown to the point that it’s time to find their own space?
Natalie Shmulik 32:28
We’re still tracking that. We’re still in the early days with our facility. We were only open a year before the pandemic hit. So we really have a lot of new users.
But we’ve had a lot of success stories already. We’ve had entrepreneurs in as little as six months be able to move graduate out and go to a co-manufacturing facility.
Roughly, we’re anticipating it will take about one to four years for a company to really grow out of our space. Those are the ideal numbers.
So after four years, that’s when we really want to reevaluate whether or not the company is growing at a good rate, whether it’s time for them to move out of our facility and into either their own space, a larger space, a co-manufacturer, or other option.
We’ve had a lot of entrepreneurs end up building out their own brick and mortar facilities, which is fantastic.
But that’s our goal, we as much as we’d love to keep everybody here under one roof. We want these businesses to grow. If they’re not growing, we’re not growing. So we want to see them grow. We want to see them create jobs, we want to see them hiring from the community, and then give new opportunities to earlier stage entrepreneurs so that they can access the space as well.
Doris Nagel
Well, you perfectly segued into my next questions!
So I just want to pick up on that and have you share with listeners some of the successes that you’ve had so far.
Natalie Shmulik 34:00
A few come to mind. Taylor’s Tacos, an incredible brand of taco business, actually just opened up their space called Tailored, where they host private events. It’s a women-owned business, and they’re doing incredible things.
They’ve really been hustling, getting the brand name out there. But their tacos are also incredibly delicious. Their menu is so well thought out. And there’s a lot of passion that goes into the food.
They started at The Hatchery. They actually won one of our pitch contests, and they moved into a private kitchen about three years ago. And since then they’ve graduated, they keep very closely in touch with us. They still use their kitchen here at The Hatchery as well. But their growth has been incredible to watch.
There’s also Little Bucks. Emily Griffith from Little Bucks joined our “Starting a Food Business” class before our facility was even built. She moved into the shared kitchen, and then she went to a private kitchen. And now she’s available nationwide. She’s using a co manufacturer, her business has grown so rapidly. That’s been wonderful to watch.
And there are many others as well. Even small wins are big wins for us. We just love seeing entrepreneurs grow. We love seeing them hire as well. Every time a new job is created is so important. Our goal is for 900 jobs to be created within the first five years of opening The Hatchery and we are on track. So that is so exciting.
Doris Nagel
That’s maybe the first time I’ve heard an incubator actually talk about that as a goal. I’m sure it’s a secondary goal for many, but I think it’s unique that you put that stake in the ground and talk about it.
Natalie Shmulik 35:53
I think it’s especially important these days, because the workforce is quite a challenge. We’ve heard it from so many restaurants, from consumer-packaged goods companies, manufactured brands — I think everybody’s going through the same thing.
We’re in an interesting time right now, where there is not a lot of help out there. Sometimes there’s a disconnect. We know there are job seekers out there that want these opportunities, but some of them might not even be aware of what’s out there and what opportunities there are.
But without a strong team, you’re not able to grow very much. So we want to make sure that we’re providing that support. We have a workforce development team that provides job readiness training. They’ll do the ServSafe certifications. They’ll help job seekers with resumes and cover letters.
They’ll also very thoughtfully place those job seekers with roles that the entrepreneurs have and try to match them both in terms of work goals, personality traits, interests, passions. And that’s really the way to maintain sustainable growth for these businesses — by having a strong team.
Doris Nagel
It occurs to me that the foodservice industry in general maybe has gotten kind of a bad rap. People maybe think of it as bussing tables in restaurants or being a server, working 30,40, 50 hours a week but not getting any benefits, and working in not very nice conditions.
And yet, some of those people probably have some really valuable experience. If they only knew where or how, they could actually take that experience and really help a small food and beverage company and have a pretty rewarding career as a result of it.
Natalie Shmulik 37:51
Yes. And within food service, it’s not that the pandemic changed things per se. It really just amplified what was already going on.
Margins are very tight. Employee benefits aren’t there, and hours can be tedious.
[Despite that,] I think a lot of restaurant groups have done a phenomenal job at turning things around. Chicago has some incredible restaurant groups. Boka has grown, as has Salt and One Off.
They all spent a lot of time adjusting their business models to be able to make sure that those who are seeking careers in food service feel valued. And so whether that’s the hourly rates, or the salaries or the benefits or additional tipping, or whatever, it’s great to see that change.
One thing that we are trying to work on now is developing a training program around manufacturing and sales. We’ve heard is from a lot of job seekers that when they hear “food and beverage,” the first thing they think of as restaurants.
But that’s not always what’s out there. We know that. But we also know that maybe there’s childcare that has to be taken into account. Maybe there’s family members that they’re taking care of, or maybe the commute doesn’t work.
But there’s so many other opportunities and pathways in this industry. It’s such an incredible industry. So we want to do our best to try to introduce these other career pathways.
Doris Nagel
Good for you!
Talk a little bit about how The Hatchery fits within the rest of the startup ecosystem in Chicago, or Illinois, or even generally, the Midwest. Building an ecosystem is no easy thing. And I think in Illinois, and Chicago and maybe even the whole Midwest, it’s been more difficult for us here than it has in Silicon Valley, or maybe Boston.
So talk about The Hatchery’s role as part of building that ecosystem.
Natalie Shmulik 40:12
We’ve played a very big role in trying to open up resources and opportunities to other communities while still recognizing that downtown Chicago exists.
There’s so much more to Chicago than just a couple of neighborhoods. It is such a vibrant city with so many talented individuals and incredible resources out there.
So we just want to spread the wealth. And we want to make sure that we’re investing time and energy and recognizing women-owned businesses, BIPOC-owned businesses. Because that is where innovation happens. That’s where change happens.
The more diversity we have in thought, in people, in products, the more we can do to solve a lot of the challenges in this industry. We want to open peoples’ eyes to the many great flavors and nutritious foods, and better-for-you goods.
One of the other ways that we try to play a role in the ecosystem here is working with other accelerators and investors working with the city. It’s only when we all work together that we can start to move the needle a little bit.
Even our partners, the big CPG brands, and well as our other partners — the law firms, the flavor companies, the ingredient companies — we all play a role. So we want to make sure that we are a connector as much as possible.
And we also love to share our learnings with other cities. We launched our kitchen incubator collective during the pandemic. We now have about 22 members, and they are all other shared kitchens, commercial kitchens or incubators around the country. We meet monthly and we share best practices, exchange resources, have great conversations and support each other because a lot of our brands will try to eventually launch in those markets. So we’re constantly building out and working to improve in different ways.
Doris Nagel
You alluded earlier that people have asked whether you would you consider franchising The Hatchery. Does The Hatchery in a different form exist in most other cities?
Natalie Shmulik 42:31
There are amazing incubators and shared kitchens in many cities. There are some incredible facilities and programs out there.
We are one of the largest in terms of the facility itself. We have a large space, and we host a lot of government organizations and other incubators who visit Chicago. And they’re always very amazed by the size of the facility, because it is quite a large space.
There are other great programs out there. But that doesn’t mean there isn’t room for more. I think we could use more even here in the city of Chicago. It’s great that organizations are setting up some support on the south side as well.
It can be tough if an entrepreneur is commuting an hour, two hours just to get to a shared kitchen space near the city center. That then eats into the time for them to be able to build their business.
So the more of those types of resources there are in different neighborhoods, the better. And we’re always happy to help. We’ve had many reach out to us who are trying to launch similar concepts. And we’re always happy to share our learnings.
Doris Nagel
You know, it’s funny, you mentioned that I was just talking with the head of one of the entrepreneurship programs at one of the local universities in the northwest suburbs of Chicago. And we were talking about how difficult it is for entrepreneurs to get downtown to places like The Hatchery, or 1871, or some of the many other wonderful programs that there are downtown.
It’s really difficult because of jobs and family commitments and the price of gas now. And there’s really not very much out in the farther ‘burbs between Chicago and Milwaukee. As a former SCORE mentor, a lot of people out this way are interested in food & beverage, so I think there’s a real need out here.
Natalie Shmulik 44:33
I agree. I think there’s always room for more support for entrepreneurs. We would love to see what we can do to help as well.
But in the meantime, from a programming standpoint, we’re offering hybrid programming. We know there’s nothing like in person, but we also recognize there are individuals who want to access those sessions, and maybe can’t because of the commute or the time, whatever it might be.
So we’re trying to do more hybrid programming where we would offer in person classes, but they can also be streamed or recorded so that people who want to view the information can still access it.
Doris Nagel
In fact, I was going to ask you about your classes and who instructs them and how you’ve set your curriculum up.
It sounds like that’s actually still evolving to meet the needs of, of the community that’s out there.
Natalie Shmulik 45:34
It’s always evolving. We’re always trying to refine things further.
We’re lucky to have incredible partners who teach a lot of our classes, because we’re not the experts in everything. We’ve been able to connect with really talented experts who can are thrilled to share their knowledge to support entrepreneurs.
And it’s constantly evolving. We recently just offered a brand-new class — a two-part series — on meaningful mentorships. We constructed it with Laura Harbinger, and we focused on how to connect with a potential advisor with a mentor with a support system. We talked about some of the tips and tricks on how to identify who could be a good mentor, how to keep them engaged, how to keep them in your network.
It was a great. It was our first back to in person session. We had a fantastic turnout, and great discussion with our members. And it was really fun to be able to go over that kind of information.
And so we’re always exploring other gaps where we can shed more light shed on various topics. We’re constantly trying to build out our programming.
Doris Nagel
Well, there certainly is a lot that entrepreneurs need to know. One thing I consistently hear from even the most successful entrepreneurs is that they had no idea how much they needed to know, And the importance of sorting through whether it was something they needed to learn about or find someone else to help them do it.
Natalie Shmulik 47:11
Yes, sometimes you don’t even know the questions to ask. You start discovering new things as you learn and experience.
So if we can help some of these entrepreneurs ask these questions up front, or peel back the curtain to the industry and showcase what’s going on in the inner workings, that might help accelerate the learning a little bit and get them to where they need to be faster.
Doris Nagel
Talk about the longer-term goals for The Hatchery. What do you and the team want it to look like in 3-5 years or so?
Natalie Shmulik 47:48
We would love to see a thriving community of diverse successful entrepreneurs.
We want to see continued graduation out of The Hatchery and into new spaces working with coal manufacturers.
We’d love to have those entrepreneurs that we’ve worked with out there and then bring them back in as mentors themselves and have them share their learnings with the new stage of entrepreneurs that will be coming and working with us.
We are also working on a phase two of The Hatchery. We have some additional land behind our current facility, so we’ve been spending time with our entrepreneurs to understand their needs and what a next step might look like.
We’re looking at possibly a pilot plant — an extension of our space so that we can give entrepreneurs even more room to grow.
And then we want to see the West Side thriving as well. We would love to be able to further support West Side residents, with jobs with opportunities with success stories and do everything we can to support the local community that has welcomed us.
Doris Nagel
If an entrepreneur is thinking about incubators — and if they’re not, a lot of them should be — how do they find the right one? What kind of questions should entrepreneurs ask to find the right fit for them?
Natalie Shmulik 49:16
I think it’s always important to speak to an entrepreneur who’s been in that program and learn from them. There’s a lot of information out there. And I think there’s no shortage of advice.
But you don’t have to take all the advice. This is something we spoke about in our session last week. It’s another challenge that entrepreneurs face: there’s unlimited information out there, and everybody you speak to will have some piece of advice. But a lot of those pieces of advice will not match up. So it’s important to really take that time to determine whether it’s the right place for you.
And there are accelerator programs that will reach out to entrepreneurs as well. And one a piece of advice I always say is first and foremost, you are interviewing the incubator as much as they’re interviewing you, so don’t just grab onto the one you talk to.
Doris Nagel
It’s not a pitch competition, but more like the modern job interview, where you ask questions to make sure you’re a good fit?
Natalie Shmulik 50:22
Yes, you should be asking questions. You should understand your goals and ask whether this going to help you reach your goals. Not every incubator is the same, and not every accelerator is the same.
You also want to understand the fine print. We certainly don’t take any kind of equity. But there are incubators and accelerators out there that might, and so you want to know all of the fine print.
You should also talk to an entrepreneur who’s been in the program. Ask them questions. Learn about their experience. See if it’s the right fit.
And with our incubator, and with others, you can always try it. If you don’t like it, you’re not stuck. So you should always gather information and trust your gut. If it doesn’t feel right, you can walk away and see what else is out there.
But really spend the time upfront to understand what you’re getting into what they’re offering you and making sure it’s the right type of environment.
Doris Nagel
You alluded to this earlier about some of the introductory resources that The Hatchery has, but I want to give you a chance to let people know again how to find out more information about The Hatchery and to get started with learning about and connecting with The Hatchery.
Natalie Shmulik
The best way to get started is to check out our website, thehatcherychicago.org.
Subscribe to our newsletter — we have a lot of great information and industry trends that we share.
We also have our “Starting a Food Business” class. So if you are thinking about getting started, and you’re not quite sure how are you just got started, it’s a really good way to just learn about the industry landscape.
Whether you’re a successful entrepreneur that wants to be connected to the community here, whether you’re just starting out, or you’re somebody that wants to provide resources, fill out the application. We’ve got so many opportunities to connect with our community here.
We would love for your listeners to follow us on social media, and to check out some of the events that are happening.
We have monthly networking events series of classes every month. So we hope to see people there and if we haven’t answered a question or there’s still uncertainty, we have an inquiry form on our website, or you can always email info at thehatcherychicago.org.
Doris Nagel
Natalie, thanks so much. much for being on the show this week and really enjoyed having you and learning more about The Hatchery.
Natalie Shmulik 55:06
Thank you, Doris. Thank you for having me.
Doris Nagel
Thanks as well to all my listeners — you’re the reason I do this.
Check out my consulting website, which is globalocityservices.com for lots of free resources.
Also check out my new radio show specific website, called thesavvyentrepreneur.org.
You can find lots of past show recordings on my YouTube channel, The Savvy Entrepreneur Radio Show.
My door’s always open for comments, questions or suggestions or just to shoot the breeze. If you want to be a guest, or you know somebody who’d be a great guest, email me at dnagel@thesavvyentrepreneur.org. I promise you’ll always get a response back from me.
Be sure to join me again next week, but until then, I’m Doris Nagel, wishing you happy entrepreneuring!
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