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SLO launches summer Hot House for startups

By   /   Friday, July 22nd, 2011  /   Comments Off on SLO launches summer Hot House for startups

Known around the state for its agriculture graduates, Cal Poly San Luis Obispo has set up a Hot House for what it hopes will be its next important crop — technology startups.

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Known around the state for its agriculture graduates, Cal Poly San Luis Obispo has set up a Hot House for what it hopes will be its next important crop — technology startups.

The Cal Poly Center for Innovation & Entrepreneurship teamed up with the UC Merced Small Business Development Center Regional Network, which covers San Luis Obispo County, along with private business people from Central Coast. Together, they put together a summer “Hot House” space where nascent businesses founded by Cal Poly students and others can establish a home base to access a variety of mentors and essential services such as law firms and accountants.

Many of the firms calling the Hot House home are in the idea phase, doing research on products and markets or deciding what might be patentable or how to structure partnership agreements. At a recent pitch meeting, a handful of groups gave progress reports, where the common question from Cal Poly officials after the report was, “What do you need?” Whether the answer was a research report, some help from an accountant or a few minutes with a lawyer, the answer was that help was on the way.

“We’ve developed this army of mentors,” said Thea Chase, the program director for the entrepreneurship center. “The common theme is that they care about Cal Poly … and the potential for Cal Poly’s positive impact on the economy of the region.”

Chase and other officials from the center whipped together funding from the Small Business Development Center and other sources in a matter of weeks to bring together the Hot House and keep students working on their business ideas through the summer months. But the incubator space itself wouldn’t have been possible without the driving force of Clint Pearce, the president of Madonna Enterprises, one of the most prominent business empires in South San Luis Obispo County. Pearce’s father-in-law, Alex Madonna, founded a construction firm in 1938 that grew into lumber, cattle and hospitality enterprises, including the colorful landmark hotel that bears his name.

Pearce said the family is casting its eye toward the next generation of businesses on the Central Coast. He has joined SLO Seed Ventures, an investor group that provides seed funding to startup businesses. And when his firm had some extra space available on Cross Street, he contacted fellow SLO Seeds investors who connected him with officials at Cal Poly to donate the 2,500 square feet as an incubator.

“We understand that the future of business in San Luis and of keeping a vibrant business community here depends on keeping that pipeline full of young, energetic and entrepreneurial spirit,” Pearce said. “It’s just fun to be a part of that.”

The incubator space has one community-based startup, but many of them are student firms. One is being headed by Davis Carlin and his partner Alex Norred, both biomedical engineering students with a year to go at Cal Poly.

They are working on a medical device that would help stem post-partum bleeding, a leading cause of death in mothers and a major problem in the developing world. The pair say their design is a fresh approach, which makes it harder to navigate a regulatory approval process that daunts even large and well-funded firms.

“The barrier for entry for medical devices is extremely high,” Carlin said. “Some of your basic instincts as an engineer don’t really fit with the FDA’s instincts.”

But through the Hot House, the pair connected with Jan Haynes of the San Luis Obispo medical device firm FzioMed. Her advice has been invaluable, he said.

“We just get the sense that she’s proactively engaged with what she is doing,” Carlin said. “They’re getting compensation, but they’re not really doing it for that.”

Carlin’s partner Norred said the Hot House has also been helpful with business planning — the pair are engineers without any business experience. “If we were out on our own, it wouldn’t be half as good,” Norred said. “We’ve got everything we need.”

Jo Anne Miller, a venture capitalist who settled in San Luis Obispo and has been active in building startup resources on the Central Coast, said the Hot House space is a pilot program. Eventually, it will probably have to charge some rent and find ways to sustain itself. But she said the groundwork is being laid for a stronger startup culture.

“From this three-month summer project, I think we’ll shake out a very early stage curriculum,” Miller said. “Probably the most sustainable piece of all this is really building at true set of mentors who have experience working with these very early stage projects.”

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