Adam Sheppard

As one of the original members of Microsoft's Live Labs team, Adam Sheppard always tried to bring an entrepreneurial edge to his work. Now, after 12 years at Microsoft, the 34-year-old Brit is getting some first-hand experience in what it really takes to build new businesses from scratch.

"It has always been a dream of mine to be an entrepreneur and actually do things without the safety net of Microsoft," Sheppard said. He's getting that chance with 8ninths, a new startup incubator created with former Microsoft veteran William Lai. Together, they hope to bankroll and build a handful of new Internet companies each year, using their deep knowledge of software development and online tools to quickly and cheaply bring fresh ideas to market.

"This isn't rocket science, but the basic premise is we want to make really small investments in terms of taking a new concept or a new business and putting the appropriate amount of development and design resources behind it in order to get it out there and trial it," said Sheppard. "And then, if the model is proven for any one of these businesses, we plan to spin them off and seek investment."

They've already quietly introduced Lolligift, an online group gift buying service that is similar to the Chip-in concept from Seattle's Wishpot. It plans to have a more formal launch in the coming weeks. They are also kicking around an idea called Industri.us, though Sheppard declined to offer details about that concept. And they have an idea cooking in the online retail fashion space, as well as ways to build new businesses around Microsoft's Seadragon and Photosynth imaging technologies.

"We have a lot of irons in the fire right now," admits Sheppard. Ideas stretch from mobile to consumer Internet to worker productivity tools. Companies or new products will be built for less than $100,000 before they try to take them to corporate sponsors or investors, he said.

8ninths is still in the early-stages of development, with the two founders working from their homes and any coffee shop where they can find wi-fi. Office space is not a top priority at the moment, though over time Sheppard said they could envision a space not only to cultivate their ideas but those of others.

Sheppard and Lai met while working on the traffic and gas price alert features at MSN's Carpoint at the turn of the decade. They always kept in touch, but only last summer started formally kicking around the concept of the Seattle business incubator.

"I learned a lot over the years watching how Microsoft struggled to get innovation on a grass roots level to happen in a big company," said Sheppard. "There are some success stories, and there are some not so successful stories. And I found that the last couple of years at Live Labs really start to gel with me the kind of things that were working and were resonating."

Several other variations of the incubator model have been started in the Seattle area, including Hillel Cooperman's team at Jackson Fish Market and Mike Koss' group at StartPad.org. 

Sheppard -- who is bankrolling the incubator with personal funds -- said 8ninths will focus on cutting-edge technologies. "Over time as 8ninths grows, we want to continue investing the proceeds into the lab and really establishing it as a name where innovation is happening," he said. 

[Hat tip to Gregory Huang at Xconomy]