Lessons from TechStars’ David Cohen on Building a Startup Culture: 7 Takeaways from the Xconomy San Diego Dinner

2/3/12Follow @bvbigelow

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TechStars’ lean and rapid development approach. The four co-founders didn’t need to raise a big fund to provide 10 startups with $18,000 apiece. They each invested personally and as general partners, they directly controlled their investments—and for two companies to exit within a year is incredibly fast.

“Instead of thinking big, we should be thinking small,” Jeb Spencer of San Diego’s TVC Capital said afterward.

As for Cohen’s criteria, everyone around the table seemed to agree that San Diego, with its balmy climate and coastal lifestyle, has long been an ideal locale for the creative class.

They also see the new EvoNexus incubator in downtown San Diego as the emerging “rally point” for Internet entrepreneurs—along with the Ansir Innovation Center in San Diego’s Kearny Mesa neighborhood. These incubators also serve as entry points for new entrepreneurs—along with San Diego Tech Founders, a Web-based group with almost 800 members that organizes “meetups” for local tech entrepreneurs.

The entrepreneur community here also is entrepreneur-led—it’s just not connected to the legacy non-profit organizations that embody San Diego’s innovation establishment, said Brant Cooper, an Internet startup consultant and lead organizer of the San Diego Tech Founders. In this regard, many agreed that the groups created to support innovation and entrepreneurship in San Diego have collectively stifled local Internet entrepreneurs.

“These non-profits are kind of fighting it out for funding,” said MindTouch CEO Aaron Fulkerson, who was outspoken in his criticism. The pressures of raising money have led them to focus more on the sponsors than on the needs of entrepreneurs, which is reflected in their programs and events. “It’s not authentic at all,” Fulkerson said. “It’s not about ‘what can we do for the entrepreneur community.’ It’s about ‘what can we sell you.’”

The single biggest challenge, however, is a crying need for high-quality mentoring.

“I think San Diego lacks a lot of the mentors who either lack the philosophy to ‘pay it forward’ the way people in [Silicon] Valley do, or the relevant experience for today’s kind of startups,” said Brian Mesic, a partner in the Los Angeles office of Anthem Venture Partners. “They either made their money in old school technology, or they’re transplants and don’t feel the same sense of community.”

San Diego lacks the kind of young angel investors who are helping new startups throughout Silicon Valley, said Peter Solvik, a managing director in the Menlo Park, CA, office of Sigma Partners. Nevertheless, Solvik said, “If you systematically tried to find everybody in this town who started a [software] company—it could be consumer, mobile, Web, or older—there’s just a ton of them.”

The way to get good mentors is to focus on interesting, high-quality startups, and it’s important to take a long view, Cohen said. Creating an entrepreneurial community “is not going to happen this year or next,” he added. “It’s going to happen over a long period of time.”

Inside the new downtown EvoNexus incubator

In attendance at the dinner—which was sponsored by the San Diego Regional Economic Development Corp., the Cooley law firm, and Silicon Valley Bank—were Matt Emery of JMI Equity, Peter Solvik of Sigma Partners, Brian Mesic of Anthem Venture Partners, Jeb Spencer of TVC Capital, Kevin Hell of EvoNexus, Malcolm Bohm of LiquidGrids, Brant Cooper of San Diego Tech Founders and market-by-numbers.com, Parand Daruger of Xpenser, Aaron Fulkerson of MindTouch, Kim Davis King, Francis Costello of StockTwits, Tom Lookabaugh of Entropic Communications, Chester Ng of SweetLabs, Phelen Reissen of SDtechscene.org and digithrive.com, Ping Wang of the Ansir Innovation Center, Dan Weeks of Brightscope, Eric Otterson and Ken Rollins of the Cooley law firm, Meredith Dowling of the San Diego Regional Economic Development Corp., and Andy Pelletier and Buzz Kreppel of Silicon Valley Bank. Xconomy Associate Publisher Jim Edwards and Xconomy San Diego Editor Bruce V. Bigelow also were there.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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  • http://www.cooley.com Eric Otterson

    We have a good thing going with EvoNexus – 4 or 5 of the 7 items are already in place there. I encourage all stakeholders from new entrepreneurs to seasoned mentors and angel investors to focus efforts on makeing the companies THERE a success. Success breeds success.

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  • http://www/bingbooster.com Betsy Aoki

    Betsy from Bing here. This is a great article and I applaud TechStars for its actively expanding involvement in startup ecosystems around the US (and I’ve run into a TS affiliate in China as well,while doing my work for http://bingbooster.com !). I know firsthand there’s a great TS setup in Boston and I agree 100% that the supportive community is what makes it. Big VC, big exits, all that flashy stuff certainly helps – but the thing that truly keeps a city a hotbed of innovation and entrepreneurship is the drive and creativity of the people in the community. San Diego folks, just a word of encouragement – it always looks too early or not enough til suddenly everything is jumping and there are too many startup events every night :). Keep the faith!

  • http://www.aicenterca.com Ping Wang

    Great article!
    I agree we should support Evonexus – they are very well resourced. We are recommending our community to apply for it if they can, and also hope to help organize programs in conjunction with Evo. However, Evo only helps a select few. In the meantime, what about everyone else? And what about people that could use coaching to get in? or after they’re out of the short program?

    It takes a whole ecosystem, and we at Ansir (www.aicenterca.com) as one of the first tech-focused coworking and event centers in SD, aim to help fill some of it out, along with the other coworking locations (www.sandiegocoworking.com) as other “hubs” of entrepreneurial activity.

    But while all these places are nice, it’s the people – including, as Eric mentioned, the mentors and angels (and corporate sponsors) that need to step up to really make SD hum, the universities that provide talent, … and organizations, such as Xconomy (who organized this discussion) that provide the glue to keep us informed and working together.
    In short, it takes a village,…and we’re it and can all do something!

  • http://xanatemedia.com Gregg Masters (@2healthguru)

    I’ve often wondered what it’s going to take to connect the dots in San Diego. We need some ‘Bay Area vibe’ here….are we too sedate, conservative, just distracted, or all of the above? We’ve got models on both coasts, including Health 2.0 NYC, etc… The Health 2.0 aka http://Health2SanDiego.com chapter, HealthCamp San Diego, http://HealthCampSanDiego.org, have been trudging along, as well as the local Quantified Self San Diego chapter, perhaps we can convene a mega meeting and try to align the health and wellness tech innovation energies..?

    In a community that hosts best in class integrated delivery systems, an asset rich concentration of bio tech and pharma interests, as well as the ‘mothership’ of Qualcomm and their recent launch of Qualcommlife, the West Wireless Institute, and no less than our very own Dr. Eric Topol, there is no reason to not catalyze and leverage this innovation metabolism into a viable tipping point.

    just sayin!

    Gregg

  • Malcolm Bohm

    It was a great evening with a lot of positive energy. The San Diego tech community urgently needs to revamp its support structures akin to the models David Cohen has established. Right now San Diego tech start up companies are in a stranglehold of outdated, inflexible organizations that stifle the nimble needs of start ups. With the exception of Evonexus, the options that startups have in San Diego are none. We need to build mentorship amongst entrepreneurs that have relevant and recent experience.

  • https://www.wirelesshealthstrategies.com/about.html Paul Sonnier

    As William Gibson famously stated, “The future is already here — it’s just not very evenly distributed.” Information dissemination suffers from the same issue, as David’s ignorance of the promotion of San Diego being at the forefront of innovation (e.g. in wireless technology, life sciences/genomics, clean tech, and bio mimicry) illustrates. As Bruce Bigelow – and most of the respondents on this thread know – I have a 9,000 member Wireless Health group on LinkedIn, where innovation occurring in San Diego is often prominently featured and broadcast to a global audience.

    And while there are visible and obvious entrepreneurial entry points (e.g. those Gregg listed) – plus I’ve served as an entry point (and received media coverage for my efforts, though strangely not in Xconomy) – we have disparate points of entry, but not a single destination, landing pad, or clearing house for our innovation community. As I see it, this is the main gap we have. I pointed this out in my email to my 1,000 San Diego contacts earlier this week: https://www.wirelesshealthstrategies.com/SD_Enterprise_Petition.html

    I also disagree with David that this can’t happen this year or next. It absolutely can happen now if we stop talking and start doing this together. I suggest the first task is to do what David suggests (and is also an item in the “San Diego Enterprise Petition: An Appeal to Mayoral Candidates” I pointed my connections to) and that is, to reiterate, create one visible entry point that makes it easy for anyone (local or global) to view and engage our entrepreneurial resources. The examples to follow are the Boston Business Hub http://businesshub.boston.gov/ and Boulder’s Boulder.me website http://boulder.me/

    So, how do we start with this one baby step? Who leads the charge or are we too fragmented to even do this one small thing?

    Best regards,
    Paul Sonnier

    Founder, 9,000+ Member Wireless Health group on LinkedIn
    Strategic Advisor, Popper & Company
    Advisor, Wireless-Life Sciences Alliance
    Mentor, Blueprint Health (TechStars-affiliated startup accelerator)
    Co-chair, Healthcare Communications SIG at CommNexus
    Twitter: @Paul_Sonnier

  • http://fashioningchange.com/blog/kevin Kevin Ball

    I think this is a very important discussion to be having… what are the holes that need to be filled to really vitalize San Diego’s startup culture? Figuring out that rally point is key… what is the rally point that brings in not only aspiring entrepreneurs but also inspires engineers to get engaged in the entrepreneurial community, and that gets the folks with previous successes re-engaged with new and growing companies.

    We have a ton of tech talent in San Diego, but unlike in the Bay Area or Boulder only a very small percentage of engineers are in the startup scene. Most are working at big, established companies or doing freelance & service-based work.

    EvoNexus has the potential to be a great rally point, and we’re super excited to be one of the first companies in the space, but I think its greatest value is in just getting people in the broader San Diego community excited about web & mobile startups. The more we can talk it up not just in the existing startup communities but in the developer communities, the better. I don’t know if that is hosting events like Startup Weekend, the Startup Hackathon that the AI Center hosted, and Ignite talks, or just going to existing events, the more we can bring the talent that already exists in the broader San Diego area into the growing startup ecosystem, the better off we’ll be.

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