Lululemon Athletica Inc.’s original general manager has founded a new startup incubator that’s spreading the same people-centric, do-good business gospel associated with Lululemon’s success.
Darrell Kopke, who guided operations at the retailer during its meteoric growth from 2001 to 2007, describes Institute B as a development shop for entrepreneurs who stand for creating societal value ahead of profits.
It has recruited seven companies for its portfolio since last November, including Vancouver’s Valcent Products Inc. (OTCBB:VCTZF), which is developing a system for vertical urban farming, and Saltspring Island’s Sirewall Inc., which is creating eco-friendly building walls out of rammed earth.
The incubator is also supporting the development of an organic winery in the Okanagan and a Vancouver company that’s launching a non-prescription treatment for the skin condition rosacea.
In exchange for marketing and public relations support, leadership guidance and help in recruiting employees and in raising capital, Institute B negotiates different investment structures with its portfolio companies, depending on the nature of the business and stage of development.
It has ownership shares or options in some of the companies; it takes a commission on sales from others.
“Depending on what their business requirements are, we insert ourselves into the leadership and operational team and help guide them through a critical point in their development,” said Kopke.
When Kopke joined Lululemon (TSX:LLL; Nasdaq:LULU) in 2001 as general manager, the company operated a single store in Kitsilano and generated $2 million in annual revenue. When it went public in 2007, Lululemon operated roughly 70 stores and reported $270 million in revenue.
At that point, Kopke became managing director for the company’s Asia Pacific region.
He left Lululemon in January 2009.
“I’m a builder of small companies,” said Kopke, “and Lululemon had become too big for me.”
The personal wealth he gained from the sale of ownership shares in Lululemon has allowed him to finance Institute B without any outside capital.
The incubator has eight employees, all of whom have pursued their own entrepreneurial ventures.
Institute B’s philosophy is similar to Lululemon’s famous self-empowerment philosophy.
“What we learned at Lululemon is that we can create a culture and a community around doing the right thing in the world first,” said Kopke. “And you can end up making money doing that.”
In a program called CEO Brain Spa, Institute B teaches CEOs to create positive workplace cultures that are free of passive-aggression and negative energy.
Kopke expects Institute B to expand its portfolio to 10 companies this year.
There’s enough space to incubate up to four companies in Institute B’s office in Vancouver’s Gastown.
Currently, two of Institute B’s seven portfolio companies, Valcent and Riversol Skin Care Inc., are occupying the space.
Valcent is trying to close a $2.3 million capital round.
Institute B is courting investors for the round and is also participating as an investor.
Riversol is also planning to donate a small percentage of sales to the advancement of research and awareness of rosacea.
“The genius behind Lululemon was that they took what was essentially a commodity and made it into a philosophy or a culture,” said Taylor. “That’s what I’m hoping that we do with Riversol.”