Plug and Play Offers San Diego Startups a Bridge to Silicon Valley

11/6/13Follow @bvbigelow

They departed. They saw. And then they came back.

The inaugural class of startups from San Diego to be admitted to a 10-week “startup camp” established by the Plug and Play Tech Center in Sunnyvale, CA, has returned home. Five of the eight companies chosen to participate in the first Plug and Play San Diego Startup Camp program made it through the entire process, including a quick pitch business presentation to scores of investors on Sept. 12.

“We got a different kind of exposure; people in the Bay Area have a different perspective,” says Adam Riggs-Zeigen, a co-founder and CEO of Rock My World, which has developed a sensor-based health & fitness platform that correlates music with the user’s vital signs. “The level of traction needed to attract investor interest is lower up there than it is down here.”

In San Diego, Riggs-Zeigen says investors are more fixated on a startup’s ability to generate revenue. In the Bay Area, he says investors don’t seem to be as focused on your ability to generate revenue as they are in your ability to attract users or Web traffic.

Nevertheless, he says, “It’s hard to make inroads into that Silicon Valley community if you don’t live there. This [Startup Camp program] provides a platform.”

Alex Roudi

Alex Roudi

To Alex Roudi, that is essentially what the Plug and Play San Diego Startup Camp set out to accomplish, although he prefers to think of the program as San Diego’s bridge to Silicon Valley. “The genesis of this idea was really based on the fact that I saw very limited resources in San Diego that are available for the startup community,” says Roudi, a San Diego real estate investor who is managing partner of Plug and Play San Diego.

Roudi says he worked with Plug and Play founder and CEO Saeed Amidi, whom he has known for many years, to establish a Plug and Play program in San Diego. Roudi says he and Amidi were initially looking to duplicate the Sunnyvale Plug and Play Tech Center by buying a high-rise in downtown San Diego. “As we went through that whole process, it really became more of a real estate project than we had in mind,” Roudi says.

Eventually they settled on the idea of creating a program in San Diego, which could provide some services by working with Robert Reyes of Startup Circle in San Diego,  but would chiefly screen local startups for the Startup Camp in Sunnyvale. The Startup Camp features weekly workshops, speakers, mentorship sessions, investor meetups, and business coaching. “There’s no question that there’s a tremendous amount of resources available in Silicon Valley,” Roudi says.

More than 70 San Diego tech startups applied for the inaugural Plug and Play San Diego Startup Camp program, and 16 finalists were selected to make 3-minute presentations in a final competition in May. Every company admitted to the Startup Camp also was eligible to receive a $25,000 investment in the form of a loan that would be converted to stock when the company raised its Series A round of funding.

Eight companies made the final cut, but two never made the trip to Sunnyvale.

Portable Genomics founder Patrick Merel tells me he declined to join the Startup Camp after learning more about Plug and Play’s terms and conditions. In addition to providing each company with a $25,000 convertible note, Merel says Plug and Play takes a 5 percent ownership stake in each company. Merel says he backed out because he already had secured some seed investors, and the terms of Plug and Play’s investment was out of kilter with the valuation that had just been determined for his company.

In the case of San Diego-based DrivAd, which offers rewards to motorists who put advertisements on their cars, a Plug and Play spokeswoman says the startup wasn’t ready for Startup Camp after all. I’ve reached out to DriveAd founder Olivier Baudoux to ask for his side of the story.

Another San Diego startup, Pcsso, was unable to make its presentation at the Startup Camp’s Sept. 12 Expo in Sunnyvale. It is expected to return for the next Expo.

Another entrepreneur who was selected for the program, Viooz founder David Hammel, says he was happy with the program. “For us, Plug and Play was a way to enter the valley,” Hammel says. “But obviously it isn’t for everybody.”

As an Israeli entrepreneur who accompanied his wife on her career move to San Diego, Hammel says everything about the program seemed at least a little foreign. In the end, he says he viewed the terms and conditions for Plug and Play’s Startup Camp as “more or less standard” for accelerator programs. But he says, “We had the challenge of building practically everything from scratch. We saw the terms, and we needed to learn from scratch what was acceptable and what was not.”

The potential of Plug and Play’s Startup Camp is “phenomenal,” Hammel says. “But the message for the next generation is that you can’t outsource your entrepreneurship. Some people come as if they’re coming to a university or something—like they’re going to be fed information. You need to be proactive. You need to leverage what you want. You need to connect to the mentors you need and to the investors you want.”

The San Diego Startup Camp program says its application process is now open for the winter class, which is scheduled to start at the Plug and Play Tech Center in Sunnyvale by January. The deadline for applications is Nov. 8.

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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  • Gabriela Dow

    We just announced Dec 3 as the date for the next PNPSD pitch event along with an awesome panel of judges that include Mitch Thrower, Mike Alfred, Barbara Bry, Kelly Abbott, Eric Otterson, Navrina Singh of Qualcomm and other leaders from StartupCircle, Connect, UCSD Rady School of Management, SDSU Lavin Entrepreneur Center, CommNexus and MIT. We are looking forward to funding and supporting more great local startups and hopefully seeing Xconomy there again!