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MARCH 2014
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TECHNOLOGY

MARKET WATCH

User
Interface
& User
Experience
Essentials

Graphene:
Strongest
Known
Material
EXPERT VOICES

The Realities
Of Starting
A Business

STARTUP & NOTICE

Are You
Squared Out?

The Man Behind

the 8 Ball
P. 24

Meet Eric Jackson,

The PayPal Wars Author
& Caplinked Founder
P. 22

Jason Nazar

BE A SUPERHERO!

P. 36

We Expose the

MASCOT SECRET

ABOUT
THE COVER
DESIGN BY

ALBERT ORNELAS

EXPERT VOICES

6 WHAT IS A PIVOT REALLY?

32

THREE STRIKES AND YOURE IN!

Change isnt always a bad thing.

7 HIRE SLOW, FIRE FAST


Waiting for Mr. or Ms. Right isnt just

for romance.

8 TAKING THE TERROR OUT

OF EARLY FUNDRAISING

Preparing and making pitches to angels

10 IT TAKES A VILLAGE

TO BUILD A STARTUP!

You may be the captain, but the ship wont

sail with just you.

11 IT TAKES MONEY
TO MAKE MONEY

24

ERIC JACKSON:
BEHIND THE EIGHT BALL

Its inevitable: you have to spend money

to make money.

12 WHERE DA MONEY AT?

Is it better to go big or go safe in L.A.?

13 THE REALITIES OF
STARTING A BUSINESS
RIGHT NOW

Starting a business aint like it used to be.

MARKET WATCH

14 GRAPHENE

36

TWO WOMEN ONE VISION

MARCH 2014

The strongest known material to man

ADVERTORIAL

16 MILTON SECURITY GROUP

Taking the guesswork out of securing

your network

FOUNDERS INSIGHT

18 GIANCARLO & JUSTIN: DONT

ANALYZE THE ROOT, JUST TAKE
THE FRUIT
Going for it, building the perfect puzzle

piece, and creating an exit strategy.

22 B E A SUPERHERO

Dont let fear paralyze your next venture.

24 ERIC JACKSON:
BEHIND THE EIGHT BALL

Thinking in the present elevates

Eric Jackson to a promising future.

TECHNOLOGY

26 ASK DR. T
27 THE TECHPRENEUR
28 SEO STEVE
STARTUP & NOTICE

30 ARE YOU SQUARED OUT?

A team that lives, sweats, breathes their

startup and never quits

32 THREE STRIKES AND YOURE IN!

David Chen overcomes challenges with his

wacky eccentricity and fearless persistence.

36 TWO WOMEN, ONE VISION

Nerdy sports fans collaborate

to create Mascot Secret

ON PATROL

38 GENTRIFICATION:
A SOCIOCULTURAL TUG-OF-WAR
Everything you thought about urban
revitalization is wrong.

FRONTLINE

Were not a
traditional publication.
PUBLISHER & CHIEF EDITOR
Carlos Pea

have to say that I hate writing. It takes me days just to get focused
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MARCH 2014

IMPACT Inspired by Entrepreneurs + Innovators is published bi-monthly

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EXPERT
VOICES

WHAT IS A PIVOT
REALLY?

Stu Heilsberg is a 20-year business development and

product management executive. With an undergraduate
degree from MIT and an MBA from Kellogg, he has
been positioned throughout his career to bridge
the gap between technology and end users. He
has done this when creating several businesses at
Qualcomm, Motorola and Intuit. As a complement to
his consulting practice, Stu speaks regularly on his
approach to ecosystem engagement, which has led to
engagements with Stanford University and his authoring
the book The Answers Are Outside The Building.

Change isnt always a bad thing.

BY STU HEILSBERG

linkedin.com/in/stuheilsberg
stuheilsberg.com

ivot. Its a word being used a lot these days. Its tied to an enormous
movement and marketing machine called Lean Startup; its also sometimes
associated with customer development. Both are excellent and if you are not
already deeply familiar with them, I strongly recommend that you do some
reading in the very near future. However, what is a pivot?
Simply put, its a change. Its a change in what you do, how you do it,
who you do it for, when you do it, how you get it to those that you are doing
it for and/or much more. Its just a change, so why such a big deal? Why give it a
fancy and catchy name like pivot? Thats easybecause most dont make these
critical changes and those few that do make them usually do so too late to survive.
We have a memorable term to use now and we make immediate and almost
personal connections with others when we use it. Now that you are more familiar
with the term pivot, lets dive deeper on why this is so important.
Ive launched a lot of products in my career, from consumer products at
companies like Intuit to enterprise and business solutions at startups. I can tell
youand most can relate to thisthat version 1.0 of every product Ive ever
launched has served primarily to tell me what version 2.0 should be.
Version 1.0 wasnt about sales, although I often thought it was. It was about
change and figuring out what change my organization needed to make to get closer
to the bullseye. Thats a pivot; it can be that simple and straightforward (and should
be). The importance of pivots come about when you dont make a pivot at all,
make it early enough orquite franklymake enough of them to do the usually
appropriate iteration to the bullseye.
This iteration, by the way, is hard for people to accept. It feels and appears
logically to be inefficient. It also appears too often to be a lack of knowledge or an
inability to get ones job done, so we try to avoid that iteration. That means we avoid
the pivots we need to make when we need to make them (which should be as early
as possible).
However, that does not work well. Weve all heard the phrase fail early and
fail often. Guess what? Thats pivoting and its been suggested to us for a long,
long time.
So what do we do? First and foremost: assume there are several pivots your
organization needs to make. Dont just think that it might be necessary, but
sincerely and wholeheartedly assume it. Now take action and put processes in place
that assume and foster change by figuring out what that change needs to be.
Also, dont do what I did for part of my career and wait for your first big pivot to
take place after launching a product. Do it early and as fast as you can. For instance,
get a simple prototypeworking or notin some folks hands within a month or
even days. A great source of guidance for immediate pivoting is your ecosystem.
I wrote an article recently titled Engage the Ecosystem and Get Real Answers;
it is a simple guide to getting out of the early building step and beginning the
pivoting process. Its focused on getting real and useful guidance as early as 30 days
into your companys existence and costs almost nothing to do, with the exception of
your time. Again, its based on real guidance and not guesswork.

MARCH 2014

The guide below will outline for you how to begin

pivoting before you even have a prototype to show
and is highly recommended. Its actually a process
for pivoting your strategy before too manyif any
development resources are used.
The premise is that our initial strategy is flawed
and once we get out there to engage a few members of
our entire value chain (not just target customers), we
will begin to understand where we should really aim
our efforts.
The steps are as follows:
1. Create an ecosystem map: This map should contain
three-to-seven categories that represent the value
chain.
2. List three companies/entities in each map category:
The first part of the Ecosystem Engagement process
calls for breadth rather than depth.
3. Reach out to contacts in those companies/entities:
Make a simple request to stop by for 30 minutes to
get their feedback on your initiative because you are
engaging other members of the ecosystem like them to
understand how this might serve them.
4. Have the engagements: Present your idea or
concept verbally; ask Does this align with your
business priorities, and if so, how can it best serve
you?
5. Listen: Look honestly at the common threads in
what you heard--be open.

It will feel like

you are basing
your business
decisions on facts
and objective
feedback, rather
than smart
thinking and
guesswork in
conference rooms.

This is how you learn what pivots to make. Remember, a pivot is simply change and in starting new
businesses or product lines; its inevitable if you want
to be successful. So embrace the idea of change and
learn to expect it. Perhaps even find a way to like it.
If you are anything like me, youll start to enjoy
pivoting, as you will be listening more and more
to what isnt working and it will feel like you are
doing your job really well. It will feel like you are
basing your business decisions on facts and objective
feedback rather than smart thinking and guesswork
in conference rooms.
This is good stuff, folks. Keep it simple--pivoting is
just changing. I encourage you to start pivoting soon
(meaning now).

HIRE SLOW,
FIRE FAST

Richard Sudek, PhD is director of the Leatherby Center

for Entrepreneurship and Business Ethics at Chapman
University, which is ranked 13th nationally by Business
Week in undergraduate entrepreneurship programs. His
innovative eVillage facility, launched in February 2012,
offers professional resources for entrepreneurs, students
and startup companies to grow new businesses. Sudek
continues to be an active angel investor and chairman
emeritus of Tech Coast Angels, the largest angel
organization in the U.S. Sudek also serves as research
committee chair for Angel Capital Education Foundation,
a national organization of angel groups in the U.S.

Waiting for Mr. or Ms. Right

isnt just for romance
BY RICHARD SUDEK, PHD

ts a word being used a lot these days. Its tied to an enormous movement and most
young entrepreneurs struggle with hiring. The hiring process is rarely enjoyable
or easy, takes a long time and may require assessing skills you are weak in. For
these reasons and others, most of us either rush the process or simply skip some
of the steps. This often leads to bad hiring decisions. If that is not bad enough, we
tend to take too long to fire an employee.

Hire Slow

The younger we are, the more likely we rush through the hiring process or skips steps in
the process of hiring a new employee. Here are some things to remember when hiring:
1. Be clear on what the responsibility of this position will be and what skills are
required for the position.
2. How much growth will the position experience over the next 3-5 years? Are
you hiring ahead of what you need? Can you afford to hire someone that you
need 3-5 years from now? If you cannot afford the person you need in 3-5
years, how does this change what you are looking for?
3. How will your work style, work ethic, leadership style and management style
impact the person who is more likely to be successful?
4. What is the culture of your firm? How will you assess the right culture fit?
5. If the position you are hiring is out of your area of expertise, how will you
assess their skills?
6. How will you check references? Will you depend just on the list the candidate
gives you? Can you network to find references not on his/her resume?
7. How will you utilize your network to source candidates?

The time you dont spend on the hiring process will likely be multiplied dramatically on the firing process. Few enjoy interviewing candidates; however, it is necessary time spent. Often younger entrepreneurs dont fully think through the culture
fit issues that are often so crucial in a small company. Finding the right cultural fit
is important not only for success of the candidate, but the success of the company.
Hiring the wrong fit can lead to problems for the rest of the team.
Hiring a candidate outside of your area is often a difficult task. For instance, if
you are technical and you have to hire a salesperson, how do you accurately assess
their skills? A salesperson is likely to be good at selling themselves in general, so it
makes hiring a salesperson even more challenging than many other positions. The
answer is to find a trusted advisor who has the skill set to interview the candidate.
For younger entrepreneurs, this often means finding an advisor, board member or
mentor who has expertise in the area you may be weak in. Even if you have expertise, you should consider multiple interviews with different people so you can get
different perspectives on the same candidate.
How will you really check references? Often it is hard to get a former employer
to give you a completely honest and critical review of a candidate. However, working
your network is important to see if you can find a reference within your network.
This may require extra work by pushing the candidate for information beyond his/
her resume and may mean asking about different organizations they are involved
with where you might have a friend or associate who is connected.
The best candidate is likely to come from your network rather than through an em-

linkedin.com/in/richardsudek
@richardsudek

Sometimes we
dont want to
admit we made
a mistake or
we simply are
too busy to fire
someone and
go through the
rehiring process.

ployment ad. This means you need to spend time working

your network. You will need to spend time figuring out
how to leverage your network to source a good candidate.

In order to improve your hiring process, review

a recent firing and look back into the process to see
where you ignored information or took a short cut.
This tactic may lead to improving your hiring process.

Firing

Younger entrepreneurs often wait too long to fire

someone. Typically the time to fire someone is when
you first sense in your gut this is the wrong person.
However, we often want to error with giving the
person enough time to prove themselves and be sure
we are being fair. Although this is a valiant intention, it
rarely leads to a good decision. Most of us think we can
help or fix the person. Sometimes we dont want to
admit we made a mistake or we simply are too busy to
fire someone and go through the rehiring process.
Perhaps we dont like the process of firing
someone and we are avoiding the unpleasant part of
leadership. If you are going to build a company, you
are going to have to fire someone at some point. There
is no escaping this part of leadership. Also, you are not
likely to be making all the right hiring decisions. Even
if you do all of the above things right, you are still
likely to make a bad hire now and then.

When Firing

For many reasons, such as legal ramifications, dont

spend a lot of time explaining why you are firing
someone. You should state that it is simply not working
out and you have decided to make a change. This is
one of the few times where getting it over quickly is
best for you and the person you are firing. You will find
that some employees will try and talk you out of it. This
is likely not to end well in the long run. Think of how
difficult it will be if they are not fired. They are likely
to be anxious, and may poison the culture. I remember
more than once after we fired someone in which we
were struggling with the decision, employees knew the
person did not fit. They would say, Why did it take you
so long?
Hiring and firing is part of being a leader. It is often
not fun and it always feels like you should be working
on something else. However, it is part of building a
company. Get over it and just spend the time.

advertise@impact.fm | WWW.IMPACT.FM

EXPERT
VOICES

TAKING THE
TERROR OUT OF
EARLY FUNDRAISING

Preparing and Making Pitches to Angels

The most important thing to remember about any early pitch or presentation is that
it should not try to elicit an immediate investment. Angels, like all investors, are
cautious; they will want to digest and evaluate what they have seen and heard. In fast
pitches and early presentations, your objective should be to engage your audience
and encourage investors to move to the next step, where you will be able to explain
the business in more detail.
In addition, you should memorize your fast pitch and practice it in front of people
not familiar with the business to confirm that it is clear to an independent listener. I
recommend that you memorize your pitch. While you need not memorize a presentationa memorized presentation can seem wooden and forcedyou should have
notes to which you can refer unobtrusively and that provide cues to what you want
to say. The presentation should also flow naturally and never simply parrot your
slides. Your audience can read, so use the bullets as introductions to topics that you

MARCH 2014

It is important to understand your audience. If you are

unsure about the expertise and interests of those to
whom you will present, I recommend getting a lay of
the land by attending and observing a meeting of the
group before the one at which you will present.

Obviously, the amount of time that you will have to

make your pitch or presentation will influence what
you should say. The fast pitch is done without written
or visual materials. Presentations can be accompanied
by visualsslides are the most common. I recommend that visuals, other than a brief video (no more
than one minute) be avoided in presentations of less
than seven to eight minutes. A key objective of any
presentation is for you to establish a connection with
the potential investors with visuals in lieu of direct
communication.

Keys to Effective Pitches and Presentations

The Audience

The Length of a Presentation

Affects Structure and Content

BY STEPHEN BLOCK

ouve been selected to make a fast pitch (a one to two minute oral introduction to your startup business without visuals) or a presentation (a 5-15
minute session with visuals) to a group of angel investors. What should you
include? How should you prepare? For a presentation, how should it be
structured and look visually?
Every entrepreneur goes through this uncertainty while seeking financing. Either as individuals or formal groups, angels are generally the first
source of professional capital after youve exhausted your own resources and tapped
friends and family. Many angels are less interested in the industry in which the
company is involved; they instead want a variety of attractive investment choices.
As a result, the sandbox in which you play is often less important to angels than the
opportunity for a large return.
Convincing angels to make an investment in your company involves a combination of challenges. Obviously, the business itself must be attractive, plus all of the
following: appear to have a unique niche and/or competitive advantage, be scalable
at reasonably quick rate and create the opportunity for a strong return (angels
generally expect 10x their investments over five to seven years). However, these
substantive matters are often difficult to discern when a company is just beginning.
At the earliest stages of a companys life, what is generally more important for angel
investors are the qualifications of your founding team and your ability to establish
your credibility.
Angels receive hundreds, even thousands, of funding applications annually and
only a fraction of those even make it past initial cursory review. Only two to three
percent of them get funded and often only after several presentations and meetings with a formal due diligence process. Deals can fall out at any stage, but many
companies fail their initial tests because their pitches and presentations are not clear,
do not include enough of the right information or are not made in a way that instills
investor confidence. The remainder of this article will provide guidelines and tips for
structuring your pitches and presentations to make it more likely that youll generate
real interest from angels.

will explain more broadly.

Finally, whether youre making a fast pitch or a
presentation, you should display the passion that you
feel for the business; if youre excited about the opportunity, potential investors are more likely to be as well.

Elements of a Good Pitch and Presentation

Ironically, the elements of a strong fast pitch or

presentation are the same. The differences are in the
scope of the discussion of each topic and the breadth
with which it can be outlined. Believe it or not, the
same matters can be covered in a fast pitch (often
called an elevator pitch because it should be short
enough to give cogently in the time it takes an elevator
to reach the top of a reasonably sized building) as in a
10-15 minute presentation, although in less detail.

The Fast Pitch Coverage

What is generally
more important
for angel
investors are the
qualifications of
your founding
team and
your ability to
establish your
credibility.

companys business
problem that it is solving and the proposed solution
size of the market niche in which the company is
competing
any protectable IP that the company has
revenue model
marketing strategy
key competitors
projected revenue growth over a three or four-year
period
key team members and their qualifications, including particularly any previous startup experience and
successful exits
how much money the company is trying to raise and
what it will be used for
exit strategy
Since a fast pitch is often made in the context of
a pitch competition in which a number of companies
are presenting, your fast pitch should, if possible, both
start and end with something strikinga hookthat
the audience will remember. There are infinite possibilitiesall it takes is some creativity and thought.

Stephen Block is a venture partner with K5 Launch,

as well as a member of Tech Coast Angels, and the
Executive Committee for the Orange County Network.
He is also a mentor to entrepreneurs and a speaker
on angel and VC investing at universities and business
conferences. He is on the Board of Directors of two public
companies, two non-profit boards and the Leatherby
Center for Entrepreneurship at Chapman University, Long
Beach Opera. He also has 40 years legal, management
and executive experience. He possesses a JD from
Harvard Law School and a BA cum laude from Yale
University.

Presentation Coverage Outline

I mention them in the order in which I generally

recommend that they be presented; the suggested
structure is a method of making your presentation
more complete and cogent.
Slides should be in short, crisp bullet points with
no more than three to four per slide and done in 20point font size or greater. Graphics should not clutter
or overwhelm the focus of the slide.
The use of a video or demonstration of a live
website can also be effective, but either should be
short and not dominate the presentation.

linkedin.com/pub/stephen-block/7/912/478
@mbentrepreneur
www.k5launch.com

(a) Explain your business. I recommend that this

explanation be the first slide in the presentation to
give the audience a frame of reference for what will
follow. I cannot count the number of times that an
entrepreneur has pitched and presented (including
using visuals), and at the end of the presentation the
first question is: What do you do? That query is
almost always a death knell for funding, since it shows
that the entrepreneur cannot explain to others simply,
clearly and concisely the nature of the business.

(b) Identify the problem that the business is solving.

It is important that investors understand why the relevant market would need or otherwise be interested
in what your company is selling (e.g., new, disruptive
technology, efficiency or cost reduction).

(c) Outline your solution. How it solves the problem,

why its better than what the market is providing
today and why customers will buy it.

(d) If your company has patents, whether they are

granted, filed applications or other protectable IP,
explain it simply and in laymans language. Many in
the audience will not be familiar with the space or the
technology. The presence of real IP is often a strong
incentive for investors.

(e) Discuss the addressable market, the portion of it

the company will attack and the percentage it believes
it can capture. The smaller that percentage the better,
since angels want to invest in a company that will
compete in a clear market niche where it will have a
true competitive advantage.

(f) Explain your companys revenue model. How will

it make money? Will it sell products and/or services?
Will it operate on a SaaS/PaaS, subscription or licensing model, where the company can represent that it
makes money for investors 24-7 (often described as
while they sleep)?
The less physical sales effort the company needs to
make, the better investors will react. If the company
has a tangible product, will it maintain inventory (requiring working capital, which means more funds will
be needed) or, assuming its not manufacturing itself,
can the product be shipped directly from the actual
contract manufacturer to the customer on a just in
time basis?

(g) Outline your companys marketing strategy. How

will it reach its customers and how much will it cost
(customer acquisition)? Will it use direct sales, Internet and other media marketing or a combination of all
(often the case when the company is both B-to-B and
B-to-C)?

(h) Explain the competitive environment. Who are

the companys competitors? What features does
your company offer that its competitors do not, i.e.,
what is your competitive advantage? Presenting this
information in matrix form is effective and allows
potential investors to see your competitive advantage
quickly.

(i) Present brief biographies of the key team members

and advisors. Emphasize domain experience, prior
startup experience and successful exits. Angels want
to see at least a two-person team, including a CTO

(k) Set forth how much money your company is requesting from investors and the terms you propose for
the raise. This includes, if known: the form of the security, preferred stock or convertible note (professional
angels will almost never accept common stock) and
what the funds will be used for. Do not seek what investors might perceive as either too much or too little
money, which will concern investors. Asking for too
little will mean that you will be spending more time
seeking additional investment when you should be
focusing on the business; seeking too much will result
in investor concern about overspending and waste.

(l) Describe how the investors will realize a return on

their investment, or the exit. I recommend focusing
on acquisition since most companies will not do IPOs,
and suggesting an IPO can cause a loss of credibility. If
available, provide examples of other exits in a similar
space to demonstrate what multiples of revenue or
EBITDA are possible for investors.

Be passionate, prepare, practice and engage your audience. Do these things

and your presentation has a greater chance of creating angel interest.
who can code (even if he or she will only supervise
others). Advisors can be particularly beneficial, but
only if they are truly engaged with the company.
Identifying a well-known person in the space who is
really doing no more than lending his or her name
will be quickly discovered and discounted.

(j) Explain the companys financial picture.

Do not try to load up your presentation with full
three to four year detailed projections. Only include a
dashboard that shows key revenue and cost financial
metrics, including gross revenue, gross margin,
operating revenue and operating margin (or EBITDA).
These should encompass no more than seven to eight
lines and be in a font size and format that can be
easily followed. Companies often also have a more
complete set of financials for people to read later in
an Appendix.

(m) Finally, present a summary with the key bullet

points that you want angels to remember.
It can also stay visible during the Q&A period as
a continuing reminder of what the company can
achieve.
In addition to a more complete financial statement, the Appendix can also contain additional
information that you were unable to present; you
can refer to it during the Q&A session. It also gives
angels more to review later should they express
interest in your company.
During Q&A, keep your answers brief so that you
will have time to answer more questions and dont
challenge your questioners. You want their money!
Be passionate, prepare, practice and engage
your audience. If you do these things, your presentation has a greater chance of creating angel
interest.

advertise@impact.fm | WWW.IMPACT.FM

EXPERT
VOICES

IT TAKES A VILLAGE
TO BUILD A STARTUP

Laurie is a strategy and business development

professional with a decade of experience advising
companies across various growth stages, from startup
to Fortune 50. Her work with entrepreneurs focuses on
go-to-market, new product/market development and
organization/business process design. She is a partner
of K5 Launch (a early-stage startup accelerator) and
managing director of Equitive (a human capital venture
fund). Laurie holds an MBA from Columbia Business
School and an undergraduate degree in finance and
organizational behavior from Boston University.

You may be the captain, but the ship

wont sail with just you.
BY LAURIE PETTINELLA ZORN

linkedin.com/pub/laurie-zorn/0/a17/534
www.k5launch.com

eciding to start a business can make you feel a multitude of different feelings
at onceexhilaration at the prospect, passion about the idea, concern about
the execution and confusion about the questions you should be
asking yourself first. Youre feeling overwhelmed, excited,
anxious, surreal and eager to begin.
So, where to begin?
It all starts with an idea. However, with
almost half of startup companies in the U.S. failing
after three years, we know that a good idea just
isnt enough, not nearly enough at all. With
that considered, what do you think is the #1
contributing factor to the failure of 44 percent
of startup businesses after three years? Poor
execution.
What does this mean for you, the one about
to walk down the twisty-turny path of starting a
new venture? How can poor execution and failure
be avoided?
The answer may seem obviousand rather
simplebut it is all too often overlooked or
underestimated. Great execution is about leveraging the
right resources!
Think about it like this: A first-time entrepreneur is akin to
being a first-time filmmaker. The startup process is surprisingly similar to
the process of making a movie, wherein all hope and effort is channeled into releasing
that product to the public and making enough money to pay off your investment.
Consider this: youre a writer-director. Sure, you wrote the 120-page, three-act
script (hey, kind of like a business plan) all by yourself. You know the beginning,
middle, end and all the wonderful details in between. You know it better than anybody
else, but to turn this visionyour scriptfrom paper to the big screen all by yourself?
It cant be done--you need help.
You need a camera operator, a producer, financing, actors, a costume designer, a
set decorator--the list goes on and on. Naturally, youre not an expert on everything
needed to create and launch your film into its release, nor should you be. When it
comes down to it, no matter how much you trust your own vision and believe it can
work, you just cant possibly do it alone.
Many filmmakers have mastered the art of getting the right resources (film crew,
post production crew, money, etc.) to translate their script and ultimately their vision
into reality, all while consistently losing money until the film is released. Many young
entrepreneurs may feel like they have to be a lone wolf, solely performing every
needed task and skill that their startup requires (and often doing this 24/7 while dining
on ramen noodles and PB&J). However, much like successfully gaining resources to
make a film, the entrepreneur must become a spokesperson for their startup business
and inspire others to jump on board.

10 MARCH 2014

How do you do that? How do you attract the

right resources to join you?

When it comes
down to it, no
matter how
much you trust
your own vision
and believe
it can work,
you just cant
possibly do it
alone.

1. You must first take your idea and formulate

a vision. A vision should provide a sense of
aspiration and describe your proposed future
state. It should be your north star and define what
you want your business to be.
2. From there, you should develop a strategy,
which is a plan to mobilize and implement your
vision. This strategy should clearly define what it
will take to be successful and, more importantly,
which resources you need to acquire (beyond
yourself that is).
3. Lastly, you must create a clear and convincing
story that pulls it all together into a nice package.
Sound like marketing? Well, yes it is. Not only
do you need to market your business to attract
customers and users, but it is also how you should
recruit your team, investors and service providers.
Once you have all of these pieces buttoned
upyour vision, strategy and storyyou can then
go on the hunt for resources to build your business. There are numerous methods to go about
recruiting resources, such as personal and professional networks, job sites, advertising, events--the
list goes on. However, with limited funds as a
budding entrepreneur, you will have to get a little
creative with compensation.
I will leave you with this example: say you
meet a web developer and she writes in HTML and
CSS better than she writes in the English language.
She can create a beautifully laid-out website in
less than an hour. Assuming she has some free
time, she might be willing to invest some hours
on an idea that she is passionate about, provided that it is well-defined plan and has a great
leader. With the right resources, the possibilities
to partner are endless. There are many individual
service providers as well human capital venture
funds already developing these unique partnerships with startups today.
Its time to begin. Start walking on your path.
Soon enough, youll be running with more people
by your side than you thought possible.

IT TAKES MONEY
TO MAKE MONEY

Stephanie Ardrey is the MAOM president of ArdreyGroup

LLC/iVentLABS Business Accelerator. Ardrey is an
adjunct professor at University of California, Los Angeles,
California State University, Los Angeles, and speaks
regularly for SCORE.org. She is also the author of Show
Me the Money: the 9Ps to Profit! Previously, she helmed
ArdreyGroup, Inc., a full-service advertising and marketing
communications agency with eight offices, 400 employees
and a $250 million capitalized resource base.

Its inevitable: you have to spend

money to make money.

linkedin.com/in/stephanieardrey
@StephDione
ardreygroupllc.com

BY STEPHANIE ARDREY

hy do I have to spend money on marketing? Isnt word-of-mouth

enough? Too often I am asked these questions by small business owners,
perplexed about the costs associated with marketing and wondering if
they can build a sustainable business through relying solely on wordof-mouth. Whether you realize it or not, there is an opportunity cost
associated with word-of-mouth; the person promoting your firm is doing
so on their time schedule.
What that means is depending upon the frequency of peoples patronage to your
firm, and then when the opportunity to mention the wonderful product or service
you delivered is presented, that then becomes the context for how and when your
business is being promoted. Relying on word-of-mouth is like using organic methods
rather than Google keywords to run a digital campaign. It was possible in the past,
but now with the new algorithms being developed its nearly impossible to avoid
paying for keywords.
I teach a monthly marketing workshop, and sadly most of the firms in the course
are struggling after being in business for over five years. Too many failed to invest in
creating a solid marketing strategy and now are facing the possibility of losing their
business as the market changes. These owners did not anticipate or prepare for the
change in market dynamics. In some cases, this was as simple as marketing to other
buyers within the same organization where they previously held a contract.
However, it never occurred to the leaders that the firm needed to invest in
marketing and now after years of doing business, they are headed out of business. It
also demonstrates that the firm didnt diversify its client base and allowed one client
to represent more than 20 percent of the total gross revenues.
Marketing is so much more than closing a sale; it includes the integrated crossfunctional actions which collectively support the brand building process. We operate
in a global brand environment where Main St. firms are competing with Fortune 500
firms and the customers are so inundated with branding messages that they expect
strong marketing strategies from all businesses.
This market environment requires firms to have a strategic plan to guide not only
what, but how the firm communicates, as well as delivers services, pricing strategies
and entire value-chain activities. This is more evident when you compare brand
promises; for example: Wal-Mart delivers a different brand promise from Nordstrom.
Consistent with the brand promises are the physical structures associated with each
organization, and the human capital focus as well as the types of media being used.
Recently, this was articulated by a CEO sharing how he has held conversations
with over 20,000 of his customers. He says that he does not understand marketing,
yet his actions of speaking with customers is step number one in developing a clear
understanding of clients wants, while step number two is developing a relationship.
In essence, hes addressing the current and future product needs through this process
of being informed by his end-users. We refer to this as research and development
(R&D). Since this CEO can allocate the necessary resources to implement any of the
recommendations that he feels are consistent with his brand promise, he is also able
to make strategic decisions. Again, these are some of the ingredients that are essential
for crafting an integrated marketing strategy.
The marketing environment today has shifted to include not only the messages,
but the customer experience. Customers expect to have an experience that they relate

to your brand. Heres an example: if a customer went

to Starbucks, had a great experience and then walked
into your business, subconsciously they are now
evaluating your service delivery in the context of the
Starbucks experience.
You may say, well I have not invested the same
amount of dollars as Starbucks has to ensure that
doing business with my firm delivers that type of
experience. My response is that of course you may
not be able to deliver on the Starbucks promise, but
you need to be clear on your brand promise and
consistently deliver on that promise and experience.
Another small business owner complained about
having to invest in the marketing expense. He felt that
the costs associated with marketing should be optional
and couldnt figure out how marketing would help with
reaching revenue growth goals. My first response was
to inquire further about his desired growth goals. I
asked if he expected to grow his revenues and if so, to
what percentage over existing gross revenues. Quickly, I
learned that the revenues are declining as the firm had
faced competitive threats which the owner addressed
by cutting fees. Unfortunately, since the fee was not tied
to a market value, but a personal value (job) the cuts
now threaten the sustainability of the firm.
A quick way to evaluate the effectiveness of the current market strategy is to
conduct a marketing audit. The first step is to evaluate the environment in both
macro and micro to understand the current dynamics. You should ask yourself
the following questions:
What external factors (regulatory, economic, etc.) are impacting your
business? How long will these impacts prevail?
Are you required to make modifications to your product or internal
processes to remain competitive?
What strategies have you used to make past decisions? How effective has
the word-of-mouth or other limited marketing efforts been as it relates to
generating client traction?
What is the sales cycle?
If you were to segment your customers from the last 1-2 years, how many
primary, secondary and tertiary customers do you have?
Are you operating at full capacity?
What is the cost of goods/services sold? Are your competitors adding or
removing products?
Do you recognize any opportunities to improve upon value-chain processes?
Can you break your product and craft a better solution?
Can you lower costs and deliver a higher volume?
Once this quick scan is completed, begin to craft a comprehensive plan which
includes investing in the marketing efforts necessary to build your brand.

Marketing is so
much more than
closing a sale;
it includes the
integrated crossfunctional actions
which collectively
support the brand
building process.

advertise@impact.fm | WWW.IMPACT.FM

11

EXPERT
VOICES

WHERE DA
MONEY AT?

Tom Nora is a Silicon Valley technology veteran and an

L.A. native. He started his career as an engineer then
progreseed through the ranks to the level of CEO for
5 successful technology startups. Currently Tom is the
founder and CEO of z2 Development, a next generation
eCommerce and mobile payment software company.
He is also the founder and leader of Startup Workshops,
a tech industry networking and training group helping
to build the Southern California startup ecosystem with
over 1,000 members.

Is it better to go big
or go safe in L.A.?

linkedin.com/in/tomnora
@tomnora
tomnora.wordpress.com

BY TOM NORA

outhern California lists over 100 venture

capital and angel organizations or partnerships
focused on the current technology startup
craze here. Yes, over 100. L.A. is currently rated
as the #3 region for venture capital deployment
in the U.S., behind Silicon Valley and New York.
According to CB insights, this represents about
10 percent of the market. Thats pretty amazing considering the history of this area.
SoCal also has a large number of accelerators,
angel investors, celebrity investors and other individuals involved in venturing in high technology
startups.
So why does it seem that there is so much less
going on here than Silicon Valley or New York? There
is plenty of buzz about Silicon Beach, Orange County
and San Diego, but not much in the way of amazing
household name companies emerging from the past
four to five year growth spurt here. There is certainly
not any buzz on 10 percent of the hottest Internet
companies. Where is all of that venture capital going?
One giant milestone these days is reaching a valuation over $1 billion. Hundreds of technology companies have started, grown and reached that magic
number within the past four to five years. Pinterest,
Instagram, Path and Square are just a few in Silicon
Valley alone, but none in southern California.
So what about L.A.? What is the flaw in the money
path here as it flows from limited partners to VCs or
angels to deployment into winner startups? Where is
the weak link? Where are the IPOs?
There are several factors, having to do with more
than just capital deployment. However, if we isolate
that part of the ecosystem, here are some areas to
consider:

investment tendencies, the early stage companies

tend to tune themselves to the market. They then
tend to train their people to be more conservative as
they go out into the world and start the next round of
companies.
This style goes against the definition of venturing.
Silicon Valley Super Angels will invest millions into a
startup before it even starts. SoCal doesnt have those
people. Angel rounds in Silicon Valley are often bigger
than local VC rounds.
For example, almost all of the top local incubator
accelerators now have a policy of only accepting new
companies that have deployed product and have revenues. Thats not incubation or venturing; its a reaction
to having so many unsuccessful companies.
Actually, the biggest funding rounds in SoCal are
invariably funded by Silicon Valley VC firms. SnapChat and SendGrid are great examples of this kind of
funding. Sand Hill Road firms take the big risks on
SoCal companies, not our VCs.
Marc Andreessen, a leading Silicon Valley venture
capitalist and thinker, calls it a pro-risk environment. Heres what he said:
Our combination of great research universities,
a pro-risk business culture, deep pools of innovation-seeking equity capital and reliable business and
contract law is unprecedented and unparalleled in the
world.

Lower Risk Appetite

In a concept related to lower risk, local investors tend

to invest in new implementations of proven ideas
rather than radical ideas. After several generations
of this over the past 20 years, the culture is set more
towards evolution than revolution. Radical thinkers
and big risk-takers tend to move north.
The emphasis here is to get to revenue fast, even
if its small revenue to pay the bills. That competes
with go big, so companies follow more and pivot
their aspirations downward to safer models. One of
the top VCs in Santa Monica recently said that the

If you study the investment patterns of local funding

groups, there is a tendency towards less cutting-edge
business models and more towards evolving existing industriesconservative tendencies. We invest
in media, commerce, video, web analytics, ad-tech,
gaming and other established markets.
These are updates of niches discovered many
years ago, mostly in Silicon Valley. This decreases the
upside and downside for funders--its less venture-y.
After a few five-year cycles of these kinds of

12 MARCH 2014

Under Deployment of Capital

Many local VCs also just sit on money here in SoCal.

One prominent firm told me they make zero to one
investment a year or they give small rounds or halfrounds as theyre called here.

Followers vs. Leaders

most important thing to do is ring the cash register.

In Silicon Valley, Boulder or Austin, many companies
never ring the cash register, but create extremely
valuable companies that are integrated into the ecosystem where they eventually ring much bigger cash
registers and change the world a bit. However, Los
Angeles is not inventing new industries.

Less Big Fish Acquirers

Companies like Facebook, Salesforce, Google, Apple,

Oracle, Twitter and now even Yahoo are giant acquisition machines in the bay area, putting billions of
dollars every year back into the local ecosystem and
taking some pretty big risks. This encourages entrepreneurs to try something crazy. Therefore, companies can win big by being bold without ever having
revenue or profits.
This action also helps foster new industries, like
the current big data and data analytics markets that
are spawning hundreds of new companies and reinventing many others. SoCal is missing these giant tech
acquirers.

Conclusion

So with over 100 venture firms here, we still have

yet to create our first Google or Facebook. Where do
we go from here? Change our way of thinking or just
make the most of the investing style we have in tech
startups?
Southern California is one of the most entrepreneurial regions in the world, producing some of the
most famous brands and products in the non-tech
world. We take enormous risks with capital in entertainment, energy and real estate because those have
been our industries for a long time.
However, we dont leverage bleeding edge future
technologies to make high-risk investments of $10 to
$100 million to take a shot at creating a new market.
Thats just not us, at least not today. A few wins could
change that quickly and attract a much more aggressive risk-taking investment style and a different breed
of venture capitalist.
It takes 15 years to convert a region into a startup
machine. Boulder did it, Austin did it, SoCal is in
about the 5th year of its current cycle; maybe it can
pivot and become the innovation machine it aspires
to be.

Starting a business aint like it used to be.

BY GUNTHER SONNENFELD

hen I was asked to write this article, the

immediate thought I had was that this
was definitely not going to be some fluff
piece on how great it is to be an entrepreneur. Theres a major difference between
being an entrepreneur (someone who
actually knows how to run and grow a
company) and a creator or a developer (someone who
can build things). As a partner in an accelerator, this
distinction plays out every day in spades, which is to
be expected, yet people should know the truth about
what it really means to start a business in todays
economic climate.
Dont get me wrongthere is no better time than
right now to start a company, but not for the reasons
you might think. Here are some realities to consider as
you move your startup ideas forward:

incubators, accelerators and funds are emerging with

alternative capitalization and growth models.

The economy needs new business and new

business innovations...whether you are ready to
provide them or not.

Bootstrapping isnt really an option,

but part of your revenue reality.

Money moves differently these days and takes on

different forms. The central banking system has
literally put a squeeze on lending; debt as well as
credit are harder to come by. The economy itself is in
flux, meaning that with fewer jobs, less production
and shifts in consumption, companies and respective
markets must focus on providing real value. This value
is based on consumer needs and the needs of enterprises to satisfy those needs. For a new business, this
means you must not only develop innovations that
disrupt current business models, but those that actually create new markets and sustain them.

Institutional money is changing face.

A current trend amongst VCs and PE firms is to
invest at a way later stage. While capital allocations
in aggregate are still significant, the reality is that
institutions are investing in fewer companies and
are mitigating risk by only getting involved with
companies that have amassed a substantial amount
of capital, are substantially in revenue, or both. This
bodes well for companies in the inner circle, but
not so much for thousands of others considered to be
on the fringes. The good news is that institutional
investors arent the only game in town, and many

Capital can be cheaper, but its also a lot more

difficult to manage in terms of whos behind it.
Private capital is still quite abundant, which speaks
to an even greater need for products and solutions
that are turnkey. Private investors are also commonly
strategic investors, which means that they are a lot
more hands-on. This can be a good thing if youve
got your ducks in a row. For most startup founders,
however, this can be frustrating, especially as they
desire room to develop product ideas and run
experiments in the market. Staying lean might mean
that you are careful with your resources, but it also
means that you are highly efficient in the way you
prove or scale your revenue.

Make no mistake about itdemonstrable revenue is

mandatory in attracting investment. During the first
Internet boom (1994-1999), mere ideasthose without
actual working products or viable business or market
modelswere enough for funding. During the second
boom (2001-2009), you needed a working product and
a quick means to get to revenue. Nowadays, a proper
growth strategy means you have to have everything
in place along with the ability to adapt to rapid shifts
in the market. This notion is something relatively few
startup founders are able to do, hence the earlier distinction between entrepreneurs and creators of ideas.
Successful startups bootstrap, especially with cash in
tow or in the coffer; this means that founders must
create revenue streams without having to rely on old
models or operating cash flow.

Build to scale, not necessarily

for a traditional exit.
There is a silver lining in all of thisthe nature of
investment. Co-ops formed by large corporations
with cash and credit (such as P&Gs Cintrifuse or
Nikes LAUNCH) are emerging as a great way of
strategically funding startups to spread or mitigate
risk, invest in infrastructure without having to own
it and to conduct research and development. One

Gunther Sonnenfeld is a serial entrepreneur, social

technologist and corporate strategist. He is the cofounder of Heardable (a brand analytics engine), a venture
partner of K5 Launch (a southern California accelerator),
and a managing director of the C-PET Futures Platform (a
policy reform initiative for emerging technologies). He is
the co-author a new book entitled, The Big Pivot, an indepth look at how a new approach to data and storytelling
transforms businesses, brands
and economies.
linkedin.com/in/gunthersonnenfeld
@goonth
www.k5ventures.com

way to look at this if you are a startup is to consider

yourself an extension of a larger company or a bigger
market. Those that do may find themselves strategically funded by these companies with an opportunity
to develop their business models with the support of
people who are decision-makers on the ground and in
the trenches.

You may not be expendable as a founder,

but your ideals are.
Something we see a lot at the accelerator is unwillingness in founders to constantly change or adapt their
business practices. Some of this has to do with startup
culture and some of it to do with a lack of understanding of the market. With that said, founders should
bear in mind that they dont need to compromise their
vision; rather, they need to see how their vision can
be improved by way of a market scheme that tends
to look at new companies as bait for new ideas and
standards of innovation.
Everything about branding, marketing and going
to market has changed and will continue to change.
Its no longer good enough to have a logo, a tagline
and a product strategy. Branding is really about how
companies operate internally and externally. Marketing is really about building a market. With technologies and cultures changing at breakneck pace, startups
must embrace this. Much like mid and large-size companies, they must be savvy about their market-building in order to remain relevant. As mentioned earlier,
consumer needsdistinctly by-products of surviving
very tough economic conditionsare driving this shift,
both in the B2C and B2B domains.
Commit purely for the love of what youre doing or
trying to do, not for the cash...and the cash will come.
This one is harder to get across, especially as we
all worry about keeping a roof over our heads. We
all need to make money and create value (or a higher
valuation) in a startup business. However, in most
cases, an investment, an exit or a successful go-tomarket strategy comes by being vigilant about what
was possible. This means that founders must build up
their risk-taking muscles by asking different questions,
being smarter and quicker in their decisions and in
general, looking at all of it as an opportunity to grow
individually and collectively.

MARKET
WATCH

Market Watch is where we identify innovative products and ideas that are either
currently creating an impact or have the potential to make an impact to whole industries
in the near future.

14 MARCH 2014

ADVERTORIAL

Jim McMurry
Wouldve Prevented
TARGETs
Security Breach
Milton Security Group: Taking the
Guesswork Out of Securing Your Network

16 MARCH 2014

e all have information we want to keep a tight

lid on, not just for ourselves, but for our clients
as well. If you were to walk into the office
Monday morning and get dozens of calls from
angry clients, all demanding to know what
happened to their money or information, how
would that reflect on you? Pretty poorly one
could guess, as you have no doubt had a security breach.
Names, addresses, phone numbers, bank routing numbers,
credit card informationthese are all things would-be
hackers are looking to siphon from your network if they
find a gap in the security.
Take what happened to Target and Neiman Marcus for
example. The hackers did not attack the companies directly,
as that would have drawn a lot of attention to them. Instead
they gained access to the companies networks through
third party contracting companies that had legitimate
access (in the case of Target, it was an HVAC-type company),
and found that there was no access control in place. Many
people had their information and money stolen seemingly
overnight and effortlessly. Though the hacker for Target was
caught, the danger is no less present for other companies
who also lack layers of security on their network.
James McMurry of Milton Security Group has observed
this problem many times now among companies and has
proposed his own solution to the security breach scare.
One of the main issues that larger network security firms
have is that they attempt to come up with a one-size-fits-all
product for the general market, McMurry explains. [They]
leave it to the customer to figure out how to adapt it to
their own network, which can be time consumingit can
be painful; it can be costly. We decided to take a different
direction and come up with a security solution that was lowcost [and] that could help any organization, from the federal
government down to a three-person outfit, by adapting the
solution to each individual network.
Milton Security Group has found an one-size-fits-all
approach to network security to be ineffective against
cyber-attacks, mostly because it attempts to blanket a
network, but falls short by leaving open gaps that smart
(and ultimately successful) hackers like to prey on. Such
thinking has earned Milton the trust of utility companies,
universities, governments, and local hospitals just to name
a few.
McMurry believes that part of the reason so many small
to medium-sized businesses are vulnerable is because
network security is simply not part of the discussion.
Even if the networks are small and do not seem as though
they would be a target at all, McMurry argues that most
small businesses still have data worth stealing. In many
instances, theyre using unprotected or lightly protected
wireless access points provided by their internet service
provider. They often also include the point of sales system
on the same network as their public WiFi access. There
are so many holes that they arent aware of! We have had
great success educating these businesses on how to not
only locate and patch those holes, but improve their overall
network security. Those that do believe they have a problem
usually do not know where to start the security process.
Milton Security Group has created its own network security appliance that evaluates each device on the network
and adapts the solution to suit each networks needs. Since
[our box] sits in line on the network, we can actually find

out if those endpoints have already been compromised. If they show signs, we can drop them from the
network before they cause an issue to other devices
around them.
McMurry has been able to study the malware
that attacked Target and believes his system would
have prevented the hacker from ever getting into the
network. The Milton Security Group appliance works
much like a tracking dog looking for a scentalways
searching and always keeping a lookout for something out of the ordinary. If [Target] had our product,
first, we would have denied access to the point of sale
networks to an HVAC contractor to begin withsimple
enough rule. Second, we would have controlled access
by time of day, type of user, where theyre coming
from, type of machine, etc.we call it the who, what,
where, when, why, [and] how.
Should your system ever get compromised, Milton
will immediately alert you and lock the system down
before any malware can propagate. Using our adaptive scan sets and filter, we can figure out Are they
being attacked [and] if so, what type of malware?
There [are] two facets of protectiontheres controlling the actual user (making sure youre a valid
user), you have the proper rights to the area of work
you need to be in, and you have a valid machine, your
machine is not infected, and [that] youre not going to
infect anyone else.
So what is this little miracle machine that Milton
has cooked up to keep your network safe? McMurry
describes the Edge7200i as a layer-2/layer-3 adaptive
network access control system. Sound complicated?
Not at all. McMurry explains that we built a system
that actually sees everything thats happening on the
wire in real time and [can] decide in real time Is it
good? Is it bad? Is it coming from a known user [or] a
known machine? Is he allowed to go to that destination
or not? [All] in real time and we can decide what to
block and what to allow through.
James McMurry knows all about keeping networks
secure, as his personal experience in and of itself
inspires credibility and posterity. The Milton Security
Group CEO has worked with a number of firms and
agencies in both the public and private sector. With
experience in 8-10 startup companies during the first
initial dot com boom, McMurry knows a thing or
two about network security. From Silicon Valley to the
Land Warrior (Military) project for the government,
McMurry brings a world of knowledge to his work at
Milton Security Group.
Miltons repertoire of security skills arent simply

for where you work, but also where you live. Security is more of a problem than everyone realizes,
McMurry admits. Its going to become worse in the
next two to three years, and not just for the small,
medium and large business, but also for the homeowner. All these devices like TVswhich have Ethernet
and wireless connections nowyour Apple TV box,
your Roku box; they all have Ethernet connections,
right? Well now your refrigerator, your washer, your
dryer, your air conditioning system, your Nest device,
your door locks, your windows and lightsthey will
all have some sort of sensor if they dont already. They
all want to send that data someplace, and how does a
typical homeownerlets say five years from now
that moves into this intelligent home, how do they
protect themselves?
Smart homes as they are being called now are
becoming more prevalent with each new home built
or remodeled. Virtually every device and the house
itself will be plugged into a network that controls all
functions of the home. Of course, having everything
now connected to the network comes with the same
risk your computer faces from would-be thieves and
hackers. Milton Security Group has also expressed
interest in pursuing security solutions for the emerging Internet of Things that are coming in the near
future. McMurry is committed to protecting you, no
matter where you are.
Milton is also a big proponent of BYOD (Bring
Your Own Device) practices in the workplace, as it is
becoming more common and allows employees to be
comfortable with their own devices. However, you
never know what may happen when they are not at
work and may accidently (and hopefully not purposefully) bring some bad stuff into your network.
So if I go home and my machine is attacked
at home, then I come to work and I plug it into the
network, does that mean my work is going to be
attacked now as well? McMurry asks. Thats where
our device comes in as well to ensure those endpoints
meet the company policies, clean and up-to-date.
With Milton products and services, BYOD has been
integrated into the algorithms and is now an integral
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devices. Milton understands that smartphones, tablets,
and personal laptops are now the accepted way of
doing business and wants you to be able to keep your
guard up with so many new access ports.
In addition to protecting your computer, McMurry
contends that even your personal mobile device,
whether a smart phone or a tablet, is at risk and needs

www.miltonsecurity.com

protection. Since about half of the web surfing and

online transactions taking place happen via mobile
devices these days, your personal data is still vulnerable to attack. However, Milton also provides a shield
for that device you just cannot live without.
McMurry also warns against using social media
too liberally when it comes to your personal information. Today, everyone is an open book, McMurry
states. Weve made ourselves this way through social
media, through everything we do online. Just by
simply telling everyone where you are constantly,
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to follow your spending habits and find a way to
get to your financial and credit card information.
Such hackers can sniff your traffic and watch your
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Always being aware of your habits during electronic
transactions and online exchanges of information is
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after admitting that you potentially have a security
problem, Milton Security Group can get you on the
right track to peace of mind.
So you must be wondering What does Milton
Security Group have to offer me in terms of keeping
all my digital data safe? Milton offers many products
and services, including all-around support for your
devices, at a low cost. The latest hardware to come
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boxes is the Edge7200i, the industrys first Adaptive
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Edge provides identity-based access to the network,
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Milton Security Group is located in Fullerton and
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safer network and a safer life.

TapIt Founders Justin Barr and

Giancarlo Maniaci: Its not about
the milestones, its the little wins
that are really exciting.
PHOTO BY DON HAYNES
18 MARCH 2014

FOUNDERS
INSIGHT

Founders Insight profiles established businesses through which entrepreneurs can

provide our readers with an inspirational or motivational story. These stories explain the
trials and tribulations they have encountered in growing their business and how theyve
persevered to reach their entrepreneurial goals.

Giancarlo & Justin:

Dont Analyze the Root,
Just Take the Fruit
Going for it, building the perfect puzzle piece, and
creating an exit strategy
BY ALEJANDRO GROVER

hen a couple of guys create a successful

mobile platform like TapIt, build it up
to being acquired for $23 million and
exit within the span of a few years,
it makes you want to figure out what
the hell their secret magic sauce is.
Not surprisingly, the true story behind
their success doesnt involve any magic at all, just
personal recipes and consistency. Luckily for us, cofounders Justin Barr and Giancarlo Maniaci were kind
enough to fill us in on their personal and professional
journeys as entrepreneurs.
Upon our arrival to conduct the interviewback
when they were still at TapItwe were given a
quick tour, which included a look at the break room
that was, to me, mind blowing. It was messy and
reminiscent of a rebellious teenagers room, albeit a
very fortunate teenagers room. With an HDTV at the
focal point, the room contained several video game
systems, musical instruments, amplifiers and a variety
of pedals lying around. Now this is corporate culture,
I thought.
I had to grab a guitar, play some music and start
messing around with the pedals. I imagined what
itd be like to have this for a break room. One would
wonder how any work gets done there with so much
dynamic entertainment available at any given time,
but theres no doubting the success of TapIt after being
acquired for $23 million by tech giant Phunware this
past January.

After just one look at Justin Barrs face, you could

see the contrast between the fun environment of the
employees break room and the seriousness involved
in creating a successful company. They seemed
disconnected from the entertainment aspect and were
more in the work hard mindset. As the masterminds
behind TapIt, it was clear that they were in a different
place mentally.
From the very beginning of the interview, they
wanted to emphasize the importance of work ethic in
their lives. Although their stories had different flavors,
they both shared similar perspectives and personal
backgrounds that led them to become who they
are today. When asked about their entrepreneurial
journeys beginning and how it shaped the rest of
their lives, Maniaci was quick to point to work ethic
as one of the most important values that pushed him
through his ventures. He described some of the ways
his father had ingrained this important habit into his
mind.
At the age of 12, Maniaci was already constantly
expected to do hard work around the house by his
father. To stretch that work ethic across Maniacis
immediate social life, Maniaci explained: My friends
would hate to come over, because my dad would
always put them to work. Every summer, his father
would bring out the big boat and make them deep
clean it with toothbrushes. Good work ethic and
entrepreneurship were characteristics that Maniacis
family lived and breathed.

My older brothers are both entrepreneurs, my

dad is an entrepreneur, self-made, and with us, the
way we were raised isnone of us [had] trust funds,
none of us [had] a golden key, but we were all taught
two things early on: one thing is work ethic, and
second is the ability to stand on your own two feet.
None of his brothers ever worked for his fathers
company and neither did he. This was all a part of
their fathers way of fostering their entrepreneurial
spirit and making sure they recognized the value
of creating their own futures instead of accepting
hook-ups from friends and family. Maniaci has a
slightly different philosophy from his own father that
he wishes to raise his children with; he proclaims his
plan to give them enough to do something, but not
too much to do nothing.
Justin Barr, Maniacis former partner in crime
at TapIt, also started working at the age of 12. In his
case, it started out with picking strawberries, and he
got what he called a promotion to washing dishes
in a restaurant at age 13. He grew up with a single
mother who had to take care of everything herself.
In order to persevere through this struggle, she was
usually working three to four jobs at any given
time in order to support her family. Barr describes
this as an observational experience that he says
rubbed off on him.
This work ethic is something that would become
an essential catalyst to their success. Maniaci
described the beginning of TapIt as working 36

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19

FOUNDERS
INSIGHT

hours a day. To stress the idea of having impeccable

discipline and work ethic, they referenced a recent
car ride with Barrs son, to whom Maniaci said It
doesnt matter whether or not youre smarter than
the next guy. You just gotta be willing to work harder
than him.
Maniaci and Barr briefly described how their
collaborative relationship worked. Maniaci saw
himself as a peaks and valleys kind of guy, saying
my highs are very high and my lows are super low.
Maniaci explained that Barr was complementary to
his attitude as Barr was more flat, suggesting he has
the ability to remain more stable during the peaks and
valleys rather than being taken by the emotional ride.

fortunate in the sense that his wife would interact

with his mother as well as his brothers wife, who
have already seen first hand the payoff that longterm ridiculous hours can produce (Maniacis brother
retired at 35).
As much as that was helpful, he admits Dont get
me wrong, there were still the times where I got the
youre never f***ing here and even when you are
here youre still not here, youre on your phone and
you knowbut at the end of the day she still sees me
excited and that makes her excited, because she sees
the growth and the potential that we have. But, its
only worth it under certain circumstances, like for me
number one isyou gotta be passionate about it and

It doesnt matter whether or not youre smarter

than the next guy. You just gotta be willing to work
harder than him.
Maniaci admitted: Justins lack of EQ is what
helped balance me out. The two explained the role of
fear in their ventures. While Maniaci seemed to have
almost no fear at all regarding the success or failure
of his companies, Justin Barr admitted to having some
fear. He explained that it was not a gripping fear that
paralyzed him, but rather a fear that co-existed with
his consistent motivation to make things work, and
he did not entertain the idea of failure enough to be
overtaken by fears power.

The Little Wins

Milestones are the things you hear about in the
news; theyre the goals that we all aspire to accomplish in our efforts to succeed. However, Maniaci and
Barr offer their own perspectives on milestones. They
believe that Its not about the milestones, its the little
wins that are really excitingyou knowthe progress.
The little wins are what keep the momentum going
and that puts energy into our sales and that was important for the entire thing. Its more like the journey
was more enjoyable than the end destination.

We asked them if they still experience those
feelings now that theyve been bought out and are
working more executive hours; they gave us a conservative and respectful answer explaining that theres
a little less satisfaction in building something thats
not your own anymoreits still exciting and its still
fun, but theres gonna be a little less satisfaction in
building a house thats no longer yours. But, the other
thing is that its less fear inducing, and less stressful. Its as though weve passed on our headaches to
someone else. I meanwe still worry about things to a
certain capacity, but its not as much as if it were your
own baby.
The burdens that come with being an
entrepreneur can play a large role in the flow of
close relationships. Maniaci explained that hes been

20 MARCH 2014

it could be broad. Like for us, were passionate about

Internet, but it has to be something thats fun so that
what youre doing isnt just work. The second thing is
[that] it has to be able to make money, and third [is]
to build something thats exitableYoure building
something that you know is going to be a puzzle
piece and that puzzle piece should be able to fit into
someone elses puzzle. So, I want to build something
that is going to fit in with a lot of people, so I feel
confident that theres an exit strategy there for me.
When asked about the origins of their venture
and inception of the idea for TapIt, they gave us a
quick rundown of what led them up to this point.
They started out with the realization that there
was a ton of money in the online space. Their first
company was actually a diet company that sold diet
pills, pamphlets, DVDs, etc. They took it to market and
utilized their marketing skills to escalate their sales.
Before they knew it, they realized theyd sold over
10,000 packages in one month online.
The issue was that they were dumping a lot
of money into the company in order to make it
happen. As they began to doubt the potential for
making money with their diet company, Barr had the
lightbulb idea to sell the ad space. Maniaci explains
We sold the advertising space, and from there, our
first month out we made about half a million bucks.
After confirming the potential for making money
in the advertising sales market, they decided they
wanted to create something meaningful.
However, they were clueless about how to do that,
so they hired a consultant who dealt with advertising
expertise. During their meeting, Maniaci thought to
himself: What about the age-old concept that those
who cant do, teach? After grilling the consultant,
trying to get to the bottom of why it is that hes
teaching instead of doing if he knows so much, the

consultant responded I do have my own business

its a mobile company. Something about that stuck
with Maniaci and he couldnt sleep.
The next day he came to Barr and said This
is what were doing Justin, were doing a mobile
company. They explained that once they knew that
their goal was to build a mobile ad platform, thats
exactly what they did. Maniaci clarified that the
difference between the diet company and the mobile
ad company was the laser focus that they exercised
during the development of TapIt.
We wanted to know how Maniaci and Barr
measured their success. Maniaci jokingly replied I
measure mine with a yardstick as he laughed, unsure
of how to answer the question. Barr had this to say:
I, for one, have not achieved the level of success that
I hope to achieve. I mean, I have a healthy and happy
family, and we live comfortably, so Imsomewhere
Ill admit Ive achieved some level of success, but will
continue striving to reach greater heights.
Immediately afterwards, Maniaci gave us his
perspective: I dont wanna sound clich, but I
mean, first of all theres always a dollar number that
I have in my head that, to me, really says success
where you never have to worry about anything ever
againbut beyond that, what I think is important
is to be able to say hey, youre well liked, youre
appreciated, youve got a great family, people look
up to you, youre able to help people, and I mean I
really think the material things should not define
you. Justin sent me a picture message the other day
that had a paragraph from James Altucher where he
says Every night when I have a bunch of anxieties,
instead of counting sheep, I count the things I am
grateful for and try to go to 100 and I think thats
very important. I dont think success should be
defined by your networthBut, itd be nice to have
that number! Barr followed up by saying I just
want to continue to make an impact on people. Id
like to look back one day and know that Ive affected
people in positive ways.
As a final word of advice, Barr had this to say to
potential entrepreneurs: Get out there and do it
do not let fear grip you. Just take that step forward
and dont let your papers of ideas and business plans
sit there and never actually take action. Maniaci
wrapped up the interview in agreement with Barr
saying Dont analyze the root, just take the fruit.
As for now, both have decided to take some time
off for themselves and their families.
In a more recent correspondence, Barr
explained: When you decide to try and build a
successful company, its easy for you to neglect other
parts of your life, so I have been spending more time
with family, exercising, traveling, catching up with
old friends, etc.
The future is undetermined for these two
successful entrepreneurs, but based on their
personalities, we expect to see them involved in
something big again soon.

Get ready to impact the world

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21

FOUNDERS
INSIGHT

Dont Be Afraid,
Be A

Superhero
Dont let fear paralyze your next venture.
BY JONATHAN DEAN

ave you ever stood at the edge of the high

dive at the deep end of the pool, desperately
wondering whether or not to just will
yourself over the edge? I think we all had
that experience at least once when we were
kids, letting fear overcome us as we would
shamefully climb back down the ladder. This
is very reminiscent of the plight of the entrepreneur,
or rather, those who want to be. Much like jumping
off the high dive, there is no maybe or kind of. You
either jump or you dont.
Jason Nazar, the co-founder and CEO of Docstoc,
relates to fear in a practical way because he believes
strongly that it is fear that keeps people with creative
minds from diving into the deep end. The journey is
never smooth, nor is it meant to be, but I think thats
what makes it fulfilling and purposeful and also why
not everyone does it, Nazar reveals. The CEO began
his own journey as early as age 6, in which he admits
he became an elementary school loan shark of sorts.
He had his fellow students borrow money from him
with interest after signing a contract; though his
first venture landed him in the principals office, it
solidified his place among those swimming in the deep

22 MARCH 2014

end of the entrepreneurial pool.

Nazar grew up in a traditional Jewish household,
inheriting the hard work pays off in America mindset
from his Persian father, who immigrated to New York
in the 1950s and met Jasons mother, who recognized
Jasons promise early on. From the beginning, Nazar
was instilled with the idea of self-sufficiency from his
father, who had only ever worked for himself and
found success in Los Angeles real estate.
Nazar rekindled his passion for financial selfsufficiency towards the end of college, earning a
business degree and a law degree while balancing
budgets as the student body president at UCSD.
After graduation and short stints in public speaking,
marketing, his own consulting company and even a
hypnosis show, Nazar realized the idea of Docstoc.com,
which he describes as a place where people [can] get
access to any business, legal, financial or professional
documents they [need] fast, easy and free.
Through the process of creating and maintaining
his business, Nazar has had his fair share of fear,
whether by doubt or financial issues. Nazar admits
it instills a lot of fear and I think that fear is most of
the time very healthy because its what gives you the

impetus to figure out how to get something done.

However, if not properly managed, fear can be very
debilitating to the point of feeling extreme doubt,
despair and depression.
Entrepreneurs just jump into a situation
and they know or they anticipate that things are
going to get really hard, and they dont have the
answers, but they say to themselves When I get
to that point, Ill figure it out then, Nazar states
in earnest. Whereas people say they want to be
entrepreneurs but never do itthey let that fear
of the unknown paralyze them from taking that
next step.
Just like focusing on the leap instead of the fall
from the diving board, most realize that after the
initial splash, the water feels fine. Once youve
started the business and you find yourself in a
situation where you dont have any money, theres
certainly an aspect of fear, but the reality of it is
often less paralyzing than the anticipation of the
moment, Nazar says, speaking from experience.
The CEOs statements amount to the fact that you
can never let the initial pain ruin the pleasure you
get from calling a venture your own.

Of course, Nazar has some of the best examples

in reality and fiction to draw inspiration from
superheroes; this is an easy notion to grasp when
you visit his office, which looks more like the Marvel
Comics corporate office with all its superhero motifs.
I often talk to our team about this idea: Think of
yourself as a superhero, and from the office dcor,
one should feel like a member of the Justice League or
Avengers (whichever universe you may adore more).
Nazar himself wrote an article entitled 10 Things
Startups Can Learn from Superheroes in which he
describes the main tenants he and his team adhere to:

Superheroes

1. Are the best at what they do

2. Always get the job done
3. A ccomplish huge feats (make major
differences or changes in the world)
4. A re powerful by themselves, but theyre
more effective in teams

Nazar likens his team of talented individuals to

a team of superheroes because he finds the above

tenants to be a great business plan. He finds solace

in the fact that each person is as passionate about
the business as he is and has been able to generate
something that is both powerful and meaningful to
the community at large. The co-founder offers this
final advice to would-be entrepreneurs: dont wait,
do it now; as for current entrepreneurs, he says this:
Youre not alone in your struggles, so to overcome
your fears, you must stand tall and defeat them like
the superhero you are.
Are you still frightened to jump into the water,
afraid you might sink? Sometimes the best way to get
past the fear is as the Green Lantern doesthrough
sheer willpower. It is the will to act and the will to do
something outside of your comfort zone that takes
an ordinary person and elevates them to something
else entirely, perhaps even superhuman. Our favorite
superheroes never give up, no matter how dire the
consequences of failure may seem. Heck, you may
find that once youve jumped in and resurfaced
for a breath of air, the water will be just the right
temperature and you will be able to start swimming
in the sweet waters of creation, innovation and
implementation.

Jason Nazar, the co-founder

and CEO of Docstoc

Youre not alone in

your struggles, so to
overcome your fears,
you must stand tall and
defeat them like the
superhero you are.
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23

FOUNDERS
INSIGHT

Eric Jackson:

Behind the Eight Ball

Thinking in the present elevates Eric Jackson to a promising future.
BY ALEJANDRO GROVER

pon our arrival to interview Eric Jackson, we

found ourselves relaxing on comfy couches
in a popular ad agency, which has a variety
of clientele including Konami, Sony, NBC and
Zico. We pass by buildings like this all the
time without having the slightest idea of what
it is like on the inside. These modern day
advertising agencies feel a bit like a trip to the future
with their elegant simplicity and high-tech feel.
As we navigated our way through this spacious
corporate paradise, we arrived at Eric Jacksons office,
which you could tell was systematically organized to
be minimalistic. It had a certain tranquil charm to
it, and aside from a couple of photos of his wife and
a plaque with the words It CAN be done, the office
was virtually devoid of personal memorabilia. This
was no accident; he explained that he wanted to keep
the focus of his office on his current project, which is
CapLinked.
Eric Jackson has the demeanor of a philosopher
with the humility of a monk, and his accomplishments
leave you with a genuine admiration for his work.
Having graduated from Stanford in 1998 with honors
and holding a bachelors degree in economics, Jackson
went on to become a part of the PayPal Mafia, which
is a label given to those who were a part of the PayPal
alumni that went on to start new ventures after eBay
acquired the online payment firm.
Jackson has tackled the online payment and
publishing industries, and his most recent venture
CapLinkedtakes on online project management.
Beyond his accomplishments in business, Jackson has
also used his publishing prestige to dip into American
politics via his publication company as well as public
commentary.
Despite his illustrious career, Jackson never
had any intention of becoming an entrepreneur. He

24 MARCH 2014

described himself as a person who was responsible,

took studies very seriously, was analytical and
wanted to go to a good college. Jackson saw himself
as a future-oriented high school student to which
he added, or a nerd if you wanna use that term.
Afterwards, Jacksons plan was to do some consulting
for a couple of years, then go back to school and get
a business degree. With a conventional education, he
expected to have a conventional, stable and successful
lifestyle.
However, his life took an unexpected turn when
he decided to join a small startup known as PayPal.
Jackson emphasized the lessons learned and the
incredible experience he had during his time with
PayPal. He considers the journey of going from a small
startup to being acquired by eBay as an invaluable
experience; he also explained his deep appreciation
for the mentorship he received from major names in
entrepreneurship such as Peter Thiel (Former CEO and
Co-founder of PayPal) and David Sacks (Former COO
at PayPal). His philosophy on mentorship is that it is
a blessing, and he says, when you get a blessing, do
something with it.
Jackson describes Peter Thiel as the equivalent
of a chess master in business, claiming that Thiel is
the type of guy who can think eight moves ahead
as opposed to someone whos decent at chess and
can think two or three moves ahead. Jackson credits
Sacks with teaching him a great deal about how to
handle technology product management.

Living in the Present

When we asked him directly, Who is Eric Jackson?
he replied, Eric Jackson is a person who realizes that
you cant write your own script, and I truly believe
that. I believe that you will find yourself in some place
at some time with certain circumstances that are

beyond your control, and from there its up to you to

make the choices that can best affect the outcome.
His sentiment echoed the experience of playing
a billiards game. You start a game of pool without
even knowing for certain whether youll be solids or
stripes. Once that is established, you continue to make
the best choices possible in each given situation. Each
time your turn comes around, the composition of the
balls on the table have been changed by forces outside
of your control. Even though the 8 ball is the ultimate
goal, its never kept at the center of attention; the only
way to win is to take it one step at a time. This ties into
his belief that its nave to think you can predict the
future, which is why its best to think in the present.

Choosing Entrepreneurship
On a personal level, the thing that attracted Jackson
to entrepreneurship the most was, as he put it,
the possibility of success. He stressed that it cant
be merely about financial success because there
are so many other avenues through which you
can achieve financial success. When speaking of
entrepreneurship, he admits Theres a certain
randomness about it. The guy on Facebook doing
graffiti can make more money than 90 percent of
successful entrepreneurs, and Im not even counting
the entrepreneurs that failedbut the idea that you
can build something and lead some sort of an effort in
hopes that the organization will achieve what it had
set out to achieveThats very exciting!
Jackson also spoke of the potential to benefit and
bless a lot of people. Entrepreneurial success does
this by creating jobs, which means helping people
provide for themselves and their families, providing
a good service or product to customers or clients and
not to mentionmaking investors happy. When
emphasizing the reward that comes as a result of

entrepreneurial success, Jackson explained, Its about

making something out of nothing, and you take that
something to a place where its doing some good for
people.

The Ups and Downs of Entrepreneurship

Jackson had a lot to say about the emotional and
psychological tension that goes along with the
entrepreneurial lifestyle. He began by saying If
you really like entrepreneurship and the kind of
creative destruction that it brings, then its a chance
to bring something brand new to the world. If you
find it exhilarating and can deal with the lack of
structure which goes along with making that happen,
meaning there are no set rules and no set roles, then
there are very few avenues to do that other than
entrepreneurship.
However, Jackson warns startups and
entrepreneurs about the difficulties that lie ahead.
He said that his biggest frustration with startups is
that They always underestimate how hard it will
be. He advises that startups should be prepared for
the fact that they will experience a lot of ups and
downs before reaching any real success. Commenting
on the ups and downs of entrepreneurship, Jackson
stated, Theres good news and bad news. The bad

news is that it doesnt go away! Theres always

something that youll be wrestling with. The good
news is that you learn how to regulate them a little
better and gain some healthy perspective. When
experiencing the inevitable ups and downs of
entrepreneurship, do you find yourself flying up and
dropping down constantly, or are you able to keep
level headed and realize that you neither achieve
success in a day nor do you normally obtain utter
defeat in one day? Theres always another day that
comes.
We wanted to know what Jackson would like
to achieve that he hasnt already. In a subtle and
serious demeanor, he replied Good and wise.
He described this wisdom as the ability to see
patterns in life. He spoke of ancient proverbs and
their tendency to be about human behavior as well
as patterns that can still be applied today; And to
be good for me just means making good choices,
morality, being fair and humane. And theres no easy
answer to that, because nobody is completely good.
Concerning his ambitions to reach the bar he has set
for himself, he admits, It will not be something for
me to saythat Ive accomplished these things. Its
just something that I think Id like to strive for over
the course of my life.

Eric Jackson, the author of The Paypal

Wards and founder of Caplinked

You neither
achieve success
in a day nor
do you normally
obtain utter defeat
in one day.

TECHNOLOGY

By bringing together elite experts, we provide genuine insights about technology and
its role in business. With the shape of technology constantly shifting and evolving, it is
imperative to maintain current and relevant information on these topics.

Ask Dr. T

Dr. Marie Talnacks career in technology transfer and

business development has spanned over 25 years as a
technology transfer and commercialization specialist.
She holds a doctorate in science and technology policy
from the University of Southern California, MBA in finance
and marketing and masters in international management.
Her professional career in technology transfer includes
four research universities and two national research
laboratories as well as her own consulting firm established
in 1991. She has written well over 500 technical proposals
and grants which have been leveraged into $60 million in
private capital funding.
linkedin.com/pub/marie-talnack/0/7b4/9a0
@talnack

oing after grants is a double-edged sword. On the one hand there is the paperwork and rules, which can
be a really slow process. On the other hand, right now with banks not lending and investment capital
slowed, it is a viable alternative for many firms, especially in the high-tech sectors. I get many questions
about whether companies should pursue grants, where the grants are, and mostly about whether they
will be able to keep their intellectual property rights if they get a grant. I will try to answer the following
questions by explaining the wide variety of grants available and what to pay attention to for your
companys best positioning in grant competitions.

Dr. T: Ask me about grant funding, patenting,

and technology transfer. I will be answering
your questions in the next issue of IMPACT:
Inspired by E+I! Email: drt@impact.fm

Question 1:

Question 2:

Question 3:

The quick answer is whenever you believe you

have made a discovery. Go to the U.S. Patent and
Trademark Office website, do a keyword search under
your idea and see what else has already been patented
in the field. Make certain your search is narrow so
that you can search through a reasonable number
of patents. I keep narrowing my keywords until I get
from 2-50 patents, 1300 hits is too wide for a meaningful review.
By the time you review about 10-20 patents, you
will have a good feel as to what is already patented
and what is unique about your discovery. Remember, you can never do too much research when it
comes making sure you get your patent in, but be sure
to keep it all very concise.

All grants are not created equally. There are a

variety of grant opportunities from state, federal,
private, etc., so read the rules of a grant announcement
for who is eligible, what the funding amount and time
frame for the grant is and the intellectual property
rights. If the grant is from a publicly-funded program
such as a state or federal grant, they typically allow the
grantee (your company) to keep the intellectual property rights. Private and corporate grant programs all
differ on intellectual property rights ownership. If you
collaborate with others on a grant, make sure there is
a clear understanding (in writing) as to who gets what
rights. Typically, each party keeps their existing proprietary information and equally splits any new research
findings and future intellectual property.

The federal grant programs are designed to

encourage research. They will not allow you to
spend grant funds for a patent, but they allow
you to keep all the rights and to seek patent protection. It would be rare to find a grant opportunity
requiring a patent before funding.
By going to the comprehensive federal
governments grant database, www.grants.gov,
you can search for new grant opportunities and
gain a better understanding of what is expected
when applying for grants.
Good luck, and remember to increase
your odds by partnering with others on grant
applications.

When is the right time for a person to patent

their product?

26 MARCH 2014

If I have a product that utilizes solar power, can

I get a grant for that if I have my own proprietary
technology?

Does the government require me to have a

patent on a product in order to get a grant?

The

Techpreneur
UI/UX Essentials

very project created for web or mobile

Internet use has a designer who takes care
of the UI/UX design. Ive assembled a short
list of tools that are of use when looking at
these critical design issues, but before we get
to those, lets take a look at what these terms
actually mean.

What is UI/UX?

UI and UX are actually two completely different

beasts, although they are usually shown conjoined as
UI/UX.

UI = User Interface

The user interface includes the hardware and

software that allows someone to interact with your
website, app or device. The UI primarily deals with
what is called the GUI or the Graphical User Interface,
which includes all of the discreet systems and devices
that allow your user to do whatever it is they want
to do (or that you would rather they do) on your site,
game, app, or product.

UX = User Experience

The user experience is about the way people interact

with your site or product. Do they like it? Is it efficient? Do they get lost getting from point A to point
B? Do they love spending time on your site, or do they
get frustrated and leave? These questions are at the
core of the user experience. You want people to have a
wonderful experience on your site.

Wireframe and Prototyping Products

Tools are wonderful things, and I am definitely a tool

person. The following UI/UX tools allow me to do my
work quickly and more proficiently. So, here are some
of the essential tools you can use when youre working
on UI/UX:

For Single Page Issues or Landing Pages

UsabilityHub.net

I love this particular site for its five second clickability

tests. Upload a screenshot and ask a question, then

see what results come back. You can pay for testers,
answer other peoples tests to earn Karma points or
use a combination of the two. You also can push it
out to a couple of your social media outlets and have
friends, clients, students and colleagues do your test
as well.

For Multi-Page Issues or Complete Projects

Balsamiq.com

Balsamiq wireframe and interface sketch software

was built by a former Adobe employee and features
incredibly rapid construction of base wireframes.
There have apparently been some studies that found
people were more apt to tell you which changes
they would like to see if the mockup doesnt look too
finished; for this reason, Balsamiq designs look like
pencil sketches. Now, the pencil sketch version can
be converted to a clean wireframe with the click of a
button.
Balsamiqs pricing is a little more convoluted
than most. The desktop version is $79 while the cloud
version runs from $12 - $249 per month. There is also
a Google Drive version for $5 per month.

InvisionApp.com

This is my preferred product for interactive wireframed prototypes. You can hack together a walkthrough that looks fairly real, but its all smoke and
mirrors. You create screen shots in Photoshop or
Illustrator, upload them into the system and wire
them together so that the project looks like its actually
functional.
Get out of the office and have users and mentors
make notes right inside the app on virtual stickies.
These prototypes are great to take your market validation to the next level; these also work well for web or
mobile.
You get one project for free for as long as you need
it (kudos to them for contributing to the lean startup
businesses). After that they have plans that run from
$15 - $100 per month. Totally worth the fee!

SketchKit.com

If you have an iPhone, then you can do quick iOS

mock-ups right in your phone on Keynote with Sketch-

Cynthia F. Kirkeby is a serial entrepreneur with diverse

experience in many industries such as design, furniture
manufacturing, novelty pet products, and Internet
education and technology. Actively involved with the
Orange County tech community, Cynthia Kirkeby is
an Entrepreneur in Resident at Chapman Universitys
eVillage, a BOD member of the Inventors Forum, a
Startup Weekend/ Startup Next mentor, a member of the
OCHCC Technology Committee and the founder of a
new advertising platform, Adaptifyed, which is currently
launching with the help of Orange County investors. For
tools, tips and news of interest to technology startups
check out her blog, Startupsmanship.com.

kit, which is FREE! This little program rocks when it

comes to capturing quick iOS mobile wireframe ideas.
Theres supposed to be an Android version coming out
soon and I cant wait.

UI/UX Wireframe Kits

Are you getting ready to mock up a site or app, but

you dont want to use the wireframe assets that you
currently have available? Take a look at some of these
kits for beautifully designed parts, perfect for bringing
your next product to life.

Rafal Tomals Photoshop Wireframe Kit

rafaltomal.com/free-photoshop-wireframe-kit/
This kit is great to use with Invisionapp.com. Its a
nice clean set of graphics that are free from Tomals
website.

Sqetch Illustrator Wireframe Kit

eleqtriq.com/2010/08/sqetch-wireframe-toolkit
This beautiful sepia-toned wireframe kit is from Eleqtriq. It has a sketch-like quality that is very similar to
the Balsamiq assets.

Sketch iFrame Wireframe UI Kit

blog.mengto.com/how-to-wireframe-an-iphone-appin-sketch/
This wireframe kit is available in three colors: blueprint, blue and beige (which is almost a sepia tone
slightly lighter).

Other cool UI/UX tools

UI/UX Trading Cards

nform.com/tradingcards/
From 2007-2009, the IA Summit put out a set of trading
cards for UI/UX. Theyre now online at nForm and they
are a great way to start a UI/UX project.

JQuery Themeroller
and JQuery Themeroller Mobile
jqueryui.com/themeroller/
jquerymobile.com/themeroller/

Create components in the colors you love and then

send over a JQuery bundle for your front-end programmer to use. This little tool has saved countless
hours of development time.

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27

TECHNOLOGY

SEO Steve

Steve Wideman has worked with companies as large

as Disney, Expedia, Computer Trends, and Skechers.
Just doing a quick search for the term SEO expert in
Google should be enough evidence of his SEO skills and
reputation. He has worked for over a decade to come
up with SEO products and services that are not only
optimized for higher rankings, but you can use yourself
without having to call your webmaster or SEO company
for every minor change.
linkedin.com/in/seoexpert
@seosteve
seosteve.com

ou may have noticed quite a few changes

happening with Google over the last couple
of months, both in search engine ranking
and with keyword data looking somewhat
suspicious. Ive received quite a few emails
regarding Googles activities and concerns
that these changes could negatively impact
web traffic.
This months questions and my responses:
When I look at my web traffic statistics, the only
keywords I see from Google are (Not Provided). Where
did my keywords go and how do I get them back?
Its true; Google has indeed hidden approximately
87% of your organic keywords from being tracked.
The (Not Provided) numbers reached as high as 50%
before September 24, 2013, but are now around 87%
for most websites.
Youll find all sorts of controversy surrounding
Googles intentions. However, the search giant insists
that this change to keyword tracking is to improve the
fight against privacy.
Controversies span from Googles desire to sell
more ads (bidding on keywords allows you to see
which keywords perform better) to attempts to block
N.S.A. spying activity, since they were accused of
providing access to the National Security Agency in
June 2013.

How do you get this data back?

Exact keyword data as youre used to seeing it from

Google is gone forever, but there are several ways you
can get clues to help you with your search engine optimization efforts. Here are two to get you started:

1. Landing page drill down. Dive into each landing

page within your web analytics program and add
keywords as your secondary dimension. Youll see
limited Google info, but youll also see Bing and other
search engine data to help you make better informed
decisions about your SEO efforts. Dan Barker of
Econsultancy also described a special filter for
Google Analytics to help you steal back some (not
provided) data.
2. Webmaster Tools. Capture and match your
keywords to their respective landing pages.
Again, you wont get exact match data, but youll
have a cluster of keywords to examine and their

28 MARCH 2014

corresponding landing pages.

Talk with your SEO consultant about creating
filters and custom reports within AdWords, Google
Analytics and Google Webmaster Tools to at least
partially recover encrypted search keywords.

(like Penguin or Panda)

2. Improves search results for mobile users
3. May return official brand results as opposed to third
party pages optimized for a brand name
4. Returns results based on intent (things not strings

I heard Google came out with a new update codenamed Hummingbird. How will this affect my ranking
and should I adjust my SEO strategy to protect my
website?
Great question! Hummingbird was actually
released from her cage around September 4, 2013, but
wasnt announced until nearly a month later.
Several of us attended a Google+ Hangout with

as Matt Cutts of Google stated)

5. Handles comparison questions better (which is
better for me - olive oil or butter?)
6. Improves Push Notifications for Google Now on iOS
Despite the no action required statement from
Mueller above, you can do something to regain rank
and traffic.

Hummingbird was not an update you need to do anything about.

Just like its Google Caffeine predecessor, Hummingbird was
deployed to improve search results.
John Mueller of Googles own Webmaster Central
Team on September 27th of last year. He made it
clear that Hummingbird was not an update you need
to do anything about. Just like its Google Caffeine
predecessor, Hummingbird was deployed to improve
search results.
In other words, unlike Panda (content) and
Penguin (links), this algorithm update has nothing to
do with penalties. So what does Hummingbird affect?
For starters, you may have noticed a downward
trend in traffic over the last year if you dont have a
mobile-ready or tablet-ready version of your website.
Googles been collecting data from searches
performed from mobile devices (such as keeping track
of the length of time the user stays on your webpage)
and reorganizing results to accommodate the nearly
50% of users who surf from their phone or tablet.
You should have noticed the upward trend in
mobile users and matched it to your downward trend
in search traffic. Youre not being penalized, but if
users dont see a mobile or responsive-style version
of your website, its likely that they are returning to
Google and choosing a different result. Each time this
happens, your rank in mobile search moves down.
From what we know so far, the Hummingbird update:
1. Has not negatively affected a majority of web pages

Improve Your Mobile & Tablet Experience

The best way to help improve the experience for

tablet and smartphone users is to re-skin your
website using a responsive design (see samples at
www.mediaqueri.es).
This new style of HTML coding basically outputs
design that responds to your browser size collapsing and expanding to provide the best experience
possible.
Responsive is great for tablets, but not so great
for smartphones. Consider creating a mobile-specific webpage template that is activated based on
browser user agent and rendered on the same URL
as your desktop version (with the same content as
well).
Mobile and smartphone websites are typically
tap-friendly, making it easy to flip through and easy
to click on full-width buttons (versus zooming in on
text links by spreading your fingers apart).

Whats Next on Googles Agenda?

There are dozens of changes coming within Google

and Bing. Nobody knows for certain which ranking
signals will be affected, but a good place to start
would be by researching structured data and experimenting with code at Schema.org.
Until next time, happy searching!

advertise@impact.fm | WWW.IMPACT.FM

29

STARTUP
& NOTICE

Startup & Notice brings exposure to truly innovative businesses and ideas. With the
intention of further fostering the entrepreneurial spirit, we strive to provide the most
unique startup businesses with a medium through which to gain exposure and help them
launch their company.

ARE YOU
A team that lives, sweats and breathes
their startup and never quits
BY GINA KIM

omorrow never knows. To most, this

is better known as a malapropism that
famously became a Beatles song, but for
Robert Rodrigues, co-founder of SquaredOut,
it entails a different meaning. Its a mental
framework of innovative entrepreneurs. It
is the summation of a visionarys journey
for a new startup business that most would be afraid to
embark on.
However, for Robert it was different; for him it was
about taking risks in such a competitive market. It was
about not knowing where his product will end up. It
was about dipping his feet into a market pool filled with
large businessesthe Googles, Apples and Microsofts
and breaking out in the tech world with his product: a
social calendar called SquaredOut. It began as a ploy to
take social media to the future, but then it moved to the
B2B space, eventually targeting small businesses, and it
is now geared towards media publications. SquaredOuts
journey consisted of major pivotal changes that led to a
complete 180 from its initial standpoint based on market
reception.
As with most startups, SquaredOuts platform
development wasnt established overnight. It took
Robert and his team of co-founders countless late hours
at the office, white board disagreements, disputes over
changes and the hardships of searching for funding to

30 MARCH 2014

get the business going.

Making the decisions that we did garnered a
lot of mixed reviews. We heard a lot of thingsthat
were crazy, stupid or that this is never going to work.
Ive heard it all. There were mixed emotions from
friends and family, some encouraging and others not
so much, Robert reveals. But thats what being an
entrepreneur is about. You take whatever criticism
and transform it into fuel to drive your business.
He concedes the same sentiments of other
new startups. The sacrifices that he and his team
made mostly concerned financial issues. Bleeding
money is tough. Youre not making any money, and
furthermore, youre putting your own money into the
business every day. I didnt know where my business
was going or what tomorrow would bring.
Being raised by entrepreneurs drove Robert to
dive into the business world. The dream was further
pursued during his undergraduate career at the
University of Arizona where he first met his current
team that helped write business ideas for the future.
Interestingly, Robert initially didnt see himself
running a social media/tech business. What I really
wanted to be was a restaurateur, he reveals. I just
wanted to eventually be a billionaire, then start a
restaurant, maybe manage a corporate, but more so
turn it into a hobby.

The early stages of developing SquaredOut made

Robert feel like giving up, or as he puts it, at least
a million times. However, thanks to his team, his
perseverance prevailed. Every person has those
days, but on different times. But, its about lifting
each other up when one of us wants to quit.
Thats the main ingredient required to make
business visions come truethe careful selection
of a team consisting of like-minded individuals
that share the same goals and could contribute on
different levels of expertise. SquaredOut employs
a small team; co-founders A.J. Mitchell and John
Correa, along with a few other members whom, as
Robert claims, wear multiple hats from business
to financing to development and sales. We all live,
sweat, and breathe this product every day.
While Robert is happy with an agreeable team,
he also acknowledges that having only a yes team
has its ramifications. If you dont disagree on
certain things, youre going to go in every direction.
Its because you dont know! You have a blank piece
of paper to draw a picture, thats why people use
pencils--so you can erase things. Unfortunately with
entrepreneurship, youre writing more with a pen,
but that doesnt mean its the end all be all.
Despite the early struggles of creating

SquaredOut, Robert reveals his biggest win of all

next to seeing his product become a realityhaving
a great team is a major reward that will never be
discounted, he states. A.J. was actually the one
who came up with the idea. He realized there was a
void in social media, a lack of sites that customized
schedules, mingle events and personal life. He
wanted to find a way to integrate all those aspects.
The name even comes from squares of calendar
dates Are you squared out? Are you busy today?
Whats coming up tomorrow?
Questioning tomorrow indeed, Robert happily
accepts this challenge common to startups
everywhere, making plans every day and wondering
what the future will bring, whether it be another
major pivot or developing new features. He has
turned his business vision into a reality. Having no
prior experience with social media/tech didnt stop
Robert, and having the right team to collaborate with
helped immensely. SquaredOut currently has 110
percent of Roberts attention and that wont change
anytime soon. I have a lot of belief in my product and
future plans for SquaredOut. Whether that is another
pivot or feature that may be implemented, this social
calendar has successfully branded itself as a product
that could give big businesses a run for their money.

Clockwise from the left:

Squared Outs Robert Rodrigues,
Grayson Lafrenz, John Correa and A.J.
Mitchell

Every person has

those days but on
different times.
Its about lifting
each other up
when one of us
wants to quit.
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31

STARTUP
& NOTICE

Three Strikes
and Youre in!
David Chen used his naturally whacky personality and his eccentric
nerdy tendencies mixed with fearless persistence to overcome a series
of unique and awe-inspiring challenges.

BY ALEJANDRO GROVER

hy is the stereotype that Chinese

people are academic Nazis so prevalent? I always asked myself why
so many Chinese students which I
met would live up to this stereotype
as well. Once David Chen explained
the way he grew up, it became clear.
China emphasizes a different set of priorities from
other countries. Academic excellence is so treasured in China that teachers would post the grades
of every student in every subject from highest to
lowest to foster academic competition. Chen did
not only excel in that environment, he became a
shining example of it; he always loved competing
when it came to grades. Looking back with pride,
Chen recalls, The best feeling was looking at the
first three out of 500 and saying yeah thats me.

32 MARCH 2014

Chens grades never let up either. Everything about

his life seemed to be on course, which is why he felt
he owed it to himself to chase his dream of attending
Harvard University.
When some nerdy fifteen-year-old Chinese kid
decides he wants to go to the U.S. with the dream of
eventually attending Harvard, nobody hands him a
free pass for good intentions. David Chen would have
to punch and kick his way through stubborn obstacles
in order to make his dream come true. When Chen
first arrived in the U.S., he basically felt like an alien.
His journey began when he attended a small conservative Christian school of 150 students in the small
town of Houghton, New Yorka dramatic transition
from the densely populated environment he was used
to in China. Whats more, this was his first experience in the U.S., which led him to believe that it was

a representative sample of American culture. This

would throw Chen into a whirlwind of culture shock.
Its not enough that he couldnt speak English, he also
couldnt relate to anything that his peers were up to.
The only thing to do, he felt, was to copy everyone
else. He admits, I didnt understand anything my
friends were doing: basketball, soccer, golf, I only
knew how to study. Getting a good GPA is all I knew
how to do. I was fat, couldnt play sports, so I guess
instead of physically challenging things I could only
do intellectually challenging things. One of his favorite pastimes was listening to music and solving math
problems. Another culture shock for Chen was the
teaching of creationism instead of evolution, which he
also found quite intriguing. Life at this school mightve
been interesting and even fascinating for Chen, but he
would inevitably find himself waking up in the middle

of the night often wondering, What am I doing here?

He often times felt lost and lonely, but then he would
remember: Harvard.
Despite these dizzying circumstances and drastic
life changes, Chen found a way to use his strength
(getting a good GPA) to excel in this new strange
environment. So thats what I did, he explains. As
a non-Christian he went as far as to teach Bible class
to other kids his age as an extra-curricular activity.
Someone from the other side of the planet was helping
teach kids how to better understand the stories of
their own religion! Unsurprisingly, Chen excelled
in this school and had many interesting social and
personal experiences along the way. After so much improbable achievement, he found himself feeling a bit
stuck. He remembered why he had come here and he
just did not feel any closer to his goal. His ideology was

that once hed decide what he wanted to do, he would

move closer to it. That is why he came to America in
the first place, so he packed up and moved to Massachusetts to be closer to Harvard.
After attending his new school in Massachusetts
for a while, Chen was shocked to discover that there
was such a thing as student government. In an effort
to test himself and see how far he could go, Chen
decided to run for class president. His Chinese friends
told him with sincere intentions: Dont do it, it wont
work, its never been done, but Chen was determined.
He rallied as many friends as he could, including his
Taiwanese roommate who got all of his friends to back
him up. Chen was not one to find a comfort zone and
stick to it; he hadnt even known what that feels like
since leaving China. In a dramatic performance, Chen
pulled out his written speech in front of his entire

I was fat, couldnt play

sports, so I guess instead
of physically challenging
things I could only do
intellectually challenging
things.

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33

STARTUP
& NOTICE

class only to say I wrote a speech, but who cares?

and tossed it aside. This was a stunt as the speech that
he gave was actually memorized verbatim. Incessantly
trembling, he followed up his speech with a heart-felt
song dedicated to the students. Immediately after
he finished singing, Chen was shocked to receive a
massive standing ovation.
The next morning Chen woke up to a phone call
offering him the position of class president. Immediately after the phone call he jumped up in ecstasy
and celebrated with his roommate who had supported him throughout this improbable endeavor. Chen
recalls, That was the first time I knew I didnt have
to copy other people; that was the first time I realized
I could be myself. He soon put some serious effort
into losing weight and wound up losing 40 pounds
within a few months. Shortly afterwards he got his
first girlfriend. Following this series of accomplishments, Chen found himself at his prime in terms of
confidence and achievement. It was time to apply for
every Ivy League school he could ever dream of, but
most importantly, Harvard. After several applications
and several responses, Chen found himself in a pile of
rejection letters from the pinnacles of his highest ambitions, including Harvard; it was devastating. For two
days he locked himself in a room and had no desire
to talk to anyone. As horrible as this depression was,
it didnt last very long. He admits, It was a humbling
experience; I cant get everything I want. Chen once
again took his failures and misfortunes and turned
them into positive energy.
He was accepted at the University of Chicago.
There was no time to dwell; the experience actually
kick started his academic work ethic and threw it into
overdrive. He would become the vice president of the
university and go on to be the co-founder of a nonprofit organization. His ambition thrived to the point
where he wanted to be able to apply for Harvard, get
accepted, and then reject them himself. Finally, he
took an internship in Hong Kong at a large investment
bank where he met one of his future co-founders.
Banking was not enough for him. His friend was a
top level coder and was also interested in starting
something new separate from banking. They started
out with a crowd funding website created for students,
but as Chen put it, we made every mistake you could
possibly think of, spent more time talking to successful
people than our actual customers, probably one of
our biggest mistakesThe product wasnt perfect. We
were a team of three and had no sense of leadership.
After spending an entire summer on the project fulltime, they felt it wasnt going anywhere.
When the next summer came around, they finally
talked to potential users and customers. They asked
them: What would you use our website for? What
would you want funding for? Many students said the
same thing: We dont need funding. Puzzled, they
would ask these students You dont need funding?
Then why would you want to be on our crowd funding
website? Again, most students had a similar answer,
which was: I just want to have an online presence.
This epiphany led to a pivotal point. Chen and his

34 MARCH 2014

That was the first

time I knew I didnt
have to copy other
people; that was
the first time I
realized I could be
myself.
co-founders decided to create a page that just contains a basic profile and then a button at the bottom
that would say if you want one for yourself like this,
click here. The reaction to their initial attempt was
incredibly negative across the board. Everyone was
discouraged. Two of the founders soon left to focus on
their studies, and this traumatized Chen; to him, it felt
like a breakup. It hit him very hard, and he decided
to leave the startup along with any memory of it by
returning to China. He became extremely doubtful
and was constantly questioning himself. Soon enough,
Chen and his team were beginning to receive emails
from students who were wanting to know when
version 2.0 would come out. This brought some drive
back to their entrepreneurial spirit, and they decided
to get together again to create Strikingly 2.0. Once
completed, they shared it all over Facebook, and they
were lucky enough to receive a few hundred sign ups
within the first two weeks.
Unfortunately, as Chen put it, everyone hated
version 2.0 too, but there was one person who did
use it for a small organization and told them that he
loved it. For Chen, that one person was enough for
him to feel like they had traction. Their next step was
to apply for Y Combinator. The interview lasted much
longer than they expected, which they saw as a good
sign. After the interview they went to celebrate at an
all-you-can-eat Sushi restaurant. They expected to
get a call while they were eating. Chen describes the
experience: Then, one hour passedtwo hours
three hours They then realized that it had been a
bit too long to have not heard back. Chen so happened
to check his email as a way to distract himself from the
tension he was feeling, and inside he found an email
from Y Combinator; it stated something along the lines
of: The market is saturated and were not sure if you
can get enough traction. They were rejected. None
of them could eat after that. There was a 20-minute
awkward silence in which they were trying to decide
whether they should continue or not. Within that
time, they all seemed to agree that they really loved
what they were doing and didnt want to stop. Chen
told them, Im going to drop out and hustle my way
through it, even if you guys dont want to. Then
everybody decided to go full-time and go all out on
utilizing user feedback to create the ultimate product.
Then, Strikingly 3.0 was born. The third was a

charm; users were reacting positively to it. They had

placed a button at the bottom that said: click here
to upgrade, but funnily enough, they didnt have an
actual payment system in place yet. One day, they
noticed that a girl from Harvard University had actually clicked the button to upgrade. They got ahold of her
and asked: You actually want to pay to upgrade? to
which she replied, Yeah, when can you have it fixed?
David Chens answer was an unhesitant Right away!
Chen admits, We didnt know how to do marketing, so we just talked to every customer we could.
I replied to every single email I got. I spent about
100% of my time talking to users. As a result of this
hard work and dedication, they became what Chen
described as Ramen profitable. After five months of
progress they finally went to apply for Y Combinator
again, but this time, before the interview they had a
quick little discussion about their intentions. They said
to each other, Were doing this for ourselves, not for
them. Well just show them what were doing and say
If you like it, thank you. If you dont, thats fine. Well
continue to power through this. The folks at Y Combinator seemed really impressed by the fact that they
were back again and still continuing to work together
on the project even though they had told them that
it was probably impossible to do. Chens friends had
similar opinions on the venture. Chen quoted a close
friend as saying, David, I love you so much, but I
think youre probably going down the wrong path. It
was the conviction and persistence that Chen and his
team possessed that won the hearts of Y Combinator,
and they were accepted.
In hindsight, Chen believes this was a turning
point, even though he and his team didnt realize it at
the time. We kept on thinking that we were dreaming, Chen admits. He even mentioned a time when
his friend had taken a nap and woke up only to say I
just had a dream that were accepted at Y Combinator,
to which Chen of course replied, Its not a dream, we
really did!
When we asked Chen what was so beneficial about
being at Y Combinator, he explained: The biggest
benefit of being in Y Combinator was really being
integrated into the entrepreneurial community and
being able to talk to other entrepreneurs who could
relate to our struggles and help us solve problems.
Chen recalls, I didnt know what the ecosystem was. I
heard about it a lot, but I didnt really get it until I was
in it. What was also special about it was that we got
three months where all we had to do was worry about
the actual product, and for a startupthats beautiful!
Following this unyielding persistence and incessant
dedication, David Chens Strikingly team went to demo
day and managed to raise $1.5 million. This is more
than some rags to riches story; this represents the
power of setting high goals, being persistent about
achieving them and not allowing yourself to fall into
doubt and depression. As David Chen has proven, you
can utilize the most uncomfortable and unfavorable
circumstances to create the most successful outcomes,
as long as you have the right determination and
mindset.

advertise@impact.fm | WWW.IMPACT.FM

35

STARTUP
& NOTICE

Jeng and Lee decided to create

a mobile platform that would enable fans
to upgrade their seats seamlessly
on their smart phones.
PHOTO BY DON HAYNES
36 MARCH 2014

Two Women

One Vision

Nerdy sports fans collaborate to create Mascot Secret.

BY ALEJANDRO GROVER

hat is it that makes a startup successful?

the solution to an all too common problem that sports

Cleveland had a 97.98% occupancy, making it nearly

There always seems to be this mix of

fans experience, and they were willing to quit their

impossible to find a place to stay. Jeng and Lee ended up

trial and error, grueling work ethic

full-time jobs to do something about it. The idea was

having to spend about a month sleeping in their Mini

and a brilliant, yet simple idea. Were

conceived when they were at the NCAA 2012 Final in

Cooper and continued to work hard on their product at

seeing more and more college graduates

New Orleans. The issue was simplewhen someone

the accelerator. Jeng joked that people would leave the

with honors moving into the startup

chooses to buy front row tickets for an event like the

office late at night commenting on how they must be

world despite the more conventional

NCAA finals, they do so without knowing if their team

very hard workers to stay up so late in the accelerator,

opportunities available to them through their degrees.

will be in it or not. So what ends up happening is that

and although they were hard at work, the reality was

Why is that? Jennifer Jeng and Donna Lee, co-founders

a lot of front row seats will be purchased, but are

that they just didnt have anywhere else to go.

of Mascot Secretoffer their own perspectives on these

abandoned at the final.

topics and more in our exclusive interview.

One thing that can be said about Jeng and Lee is

Jeng and Lee emphasized the importance of

Jeng and Lee noticed those empty seats. They were

mentorship in their journey towards the end of our

desperate to get closer since their team did make it to

interview. Jeng put it this way: As much experience

that they are a couple of focused entrepreneurs who

the final. They were willing to do whatever it took to

as we have in our backgrounds, the fact is we dont

are determined to get things done and they make no

move up or upgrade whether that meant trying to sneak

know everything. You always need more help and

excuses. They both have dynamic backgrounds that

over or paying an additional fee.

expertise in the areas you are not

did not directly translate to their entrepreneurial

They failed. After recognizing this

familiar with. It makes it so that we

career paths. Jeng also described Lee and herself

obvious problem and experiencing

dont have to waste our time making

as nerds and sports fans. Lee had graduated with

an all too common frustration as

mistakes. When we tell a mentor

a degree in political science through which she

sports fans, they made it a plan to

who is an expert in their field about

transitioned into a career in law, while Jeng received

come up with a solution for this

a plan that we have, they can shut

a degree in hospitality, which she used to establish a

problem and help others. Jeng

it down immediately and force us

career in hotel clientele services. These very different

and Lee decided to create a mobile

to come up with a new plan if they

backgrounds that were both fairly successful led to an

platform that would enable fans to

know its very unlikely to work. So,

entrepreneurial team to create an awesome startup.

upgrade their seats seamlessly on

that saves us a lot of time and makes

their smart phones.

progress happen faster. Also, as a

How does that work? Lee explained that she never

saw her law career as the end destination. She always

Once they decided to dedicate

themselves

from corporate strings in the future, and she did indeed

problem, they applied to several

who really believes in what youre

try. She tried a few times in fact. Jeng and Lee have

accelerators around the country.

doing, they can help to pick you up

been working together for years. Their first startup

When asked about why they

when youre experiencing those

together didnt pan out too well. They were trying to

chose to apply around the country

down times.

establish an online reservation site for spa services,

instead of locally, they explained

but the business simply failed. When asked about why

that it was really important for

formed in Cleveland, Jeng and Lee

that is, Lee responded by saying We probably screwed

them to explore all options; they

were introduced to the Cleveland

up too many times in every little place, to which Jeng

strongly valued finding someone

reacted, Thats when you learn to fail fast and move

who genuinely believed in their product. Beyond that,

their concept quickly. As for now, Jeng and Lee are

on. Lee elaborated on their failure by saying, Another

it was important to them that they find people with the

consistently striving to improve their product and add

problem was that we were working our other jobs full-

same core values in order to reach optimal success.

on additional features that connect teams with the

time, so our attention was diverted. You just cant go

part-time on a startup.
With Mascot Secret, Lee and Jeng came up with

to

solving

startup you have so many ups and

envisioned herself doing something more independent

this

One of the accelerators Jeng and Lee were most

downs, and when you have a mentor

Thanks to the connections they

Cavaliers, a team which picked up

fans; seat upgrading was only the beginning. Keep an

attracted to was located in Cleveland. So, they drove

eye out for Mascot Secret, they may be coming to a

to Cleveland in their Mini Cooper only to find out that

venue near you.

advertise@impact.fm | WWW.IMPACT.FM

37

ON PATROL

Our staff investigates interesting events, underlying opportunities and news in the
entrepreneurial community to bring controversial topics to light. Our writers get out
there to seek the latest and greatest in innovation, game-changing and overall disruption
in different industries.

GENTRIFICATION:
A SOCIOCULTURAL TUG-OF-WAR
Everything you thought about urban revitalization is wrong
BY GINA KIM

or years, the term gentrification has had a

negative connotation to it, so much so that
some prefer to use a more light term, such as
restoration, renewal or revitalization. Whatever
word one may prefer, it all ultimately means
the same thingthe process in which new
businesses arrive to lower-income urban areas
where residential shifts, urban development and displacement take place, changing the composition of a
neighborhood. In simpler terms, gentrifications motto
is ultimately: out with the old, in with the new.
Its easy to see why so many people oppose the idea
of gentrification. It implies a negative effect geared
towards urban families, often involving population
migration as lower-income residents are displaced in
the name of business. There is a transformation from
what gentrification used to mean to what its become
today. Businesses that have been affected differently
have their own definitions of what renewal means,
whether it be the waging of a social war between
class and race or the mere trend of a business model
done for the sake of supply and demand. This article

38 MARCH 2014

explores these standpoints that contrast one another

with a closer look at a new business concept thats
transforming downtown Santa Ana.
What exactly makes downtown Santa Ana such a
unique commerce? There is an urban core characteristic, the family friendly orientation aimed towards
procuring the Latino/Hispanic and other minority
communities for years. The urban shift progressing
over the years has slowly wiped out low-income
families as rent increased, which eventually led to
evictions. Revitalized areas sprouted high-end establishments focusing on retail shops, restaurants, and
other types of entertainment. The formerly known
safe haven for small businesses is no longer looking
out for these original renters with the handshake
and promise of a good deal, but instead shifts all of
the focus on targeting a younger demographic. The
communal Hispanic environment has changed face
forever.
Why should small businesses be coerced into
giving in and changing their brand? Why should it
be imperative for them to sell out to the corporate

rat race to find cheese? If anything, local proprietors

were finding cheese on their own from the start, but
redevelopment is now threatening to put a stop to it.
The product of their hard work is being taken away to
make room for the rich who always seem to win. Nostalgia and sentimentality are obliterated for the sake
of an upscale neighborhood that will eventually mold
itself to become a cookie-cutter portrait of mono-cultural capitalism at its finest. The traditional notions
of familial values are scoffed at and have become
nothing but a postcard boasting of its new commercial
ideals that took everything away from Mom-and-Pop
stores to replace them with new business trends that
glorify the new generation and the capital revenue it
will produce. Once residential and commercial shifts
are implemented, will there be any history left in
downtown Santa Ana? Are the stories of the past swept
under the rug, or more so figuratively, pushed behind
the chain link fences put up by construction sites, to be
forgotten of what Santa Ana really stands for?
Local businesses have made a mark in downtown Santa Ana within the past several years before

redevelopment had taken place. Downtown Santa Ana

was meant to be a focal point for the working class
community to have a place to visit, shop and relax on
the weekends with families. Chefs or bakers coming
from humble beginnings progressed their businesses
from the food truck to being offered a spot to establish
their dreams at the center of downtown. For so many
of these renters, they were promised to have their
property taken care of. With no impending worries
of their businesses ever being shut down, proprietors
got on board with the promises made, but suddenly
everything changed.
Instead, property was given to developers who
had a vision to embark on a project to revitalize Santa
Ana, renewing the commerce to garner a more hip
and new customer base. However, unlike the rent
space that was offered to them in the past, renovation
opportunities werent as readily offered as the years
went on wearing down these decade-old painted
buildings. Operating under certain conditions, such
as merely tearing down establishments without fixing
them eventually starved out the customer base. With

The changes that were made what with switching

names from Fiesta Marketplace to East End were
just the beginning of ethnic cleansing.
the help of federal government/city/state who all
changed downtown Santa Ana into a shopping center
encroached upon local businesses. With surrounding
communities around Orange County such as Irvine
and Anaheim assimilating their business mode of
destroying the past, it seemed to make sense to these
developers who followed suit.
Ryan Chase, a real estate investor and property
manager of East End explains how important it is to
look at the other side that explains market forces,
capitalism, and the reasons behind redevelopment.
What seems to be an apparent unjust business mode
of conversion actually works towards capital demand.
According to Chase, Orange County has the potential

to grow, but lacks that urban experience which he

tries to create with his business decisions. Trends in
downtown are revitalizing; there is no in between for
businesses. They either thrive or die, Chase reveals.
Santa Ana has the potential to become an epicenter
in terms of culture, business, and commerce. For
Chase, it wasnt about kicking certain races out, and
thats what weve been accused of. It was about investing in new businesses and competing with markets
such as strip centers, malls or even the Internet.
For some, its a positive change. A stretch of
businesses on the west end of 4th street echo different
sentiments of the new transformation. Velvet Lounge
at 416 W. 4th St is a popular venue aiming

ON PATROL

at the younger demographic (admittance of ages

ranging from 18 or 21+) to be the mark of their capital
revenue. Along with catering to a younger crowd,
Velvet Lounge is also a popular gay-friendly club and
bar in the evenings with several LGBTQ themed events
aimed towards a different kind of social community.
Velvet Lounges assistant manager and longstanding employee of Club Lucky Entertainment Robert
Carroll is all for the new environment that the business is eager to adapt to. Speaking from a personal
standpoint and not representing the venue as a whole,
I dont believe theres any type of pushing going on
with this new business mode, Carroll states. Its about
us as renters accommodating the current economic
climate; ultimately, for Velvet, its a positive factor. It
brings in extra revenue and gives young people a local
hangout that they wont have to venture out to LA or
West Hollywood for. Velvet is allowed a spot in Orange
County to help a different kind of minority community, which is ultimately the LGBTQ crowd.
Samuel Romero, a longtime owner of St. Teresas
Catholic Gift Shop, thinks otherwise. Night life and
alcohol are the major tones of Downtown Santa Ana,
he argues. The changes that were made what with
switching names from Fiesta Marketplace to East End
were just the beginning of ethnic cleansing. Why glamorize the nightlife and promote something [alcoholism]
thats already a problem as is? he disputes. Renovating the entire courtyard started from mowing down
the carousel and family oriented shopping areas by
setting up chain link fences around construction sites,
along with blocking our storefronts definitely killed
foot traffic and at least 25 percent of our customers.
Upon asking him if the racial card was to be considered, especially seeing as though it is his own ethnic
demographic being pushed out and doing the pushing,
he fervently agrees. Latinos/Hispanics are definitely
being affected. Businesses are forced to change their
store dynamics, leases are held until we can fit the
tone, and all of this change was made through PBID
[Property Based Improvement District] and city staff,
including major property owners and business councils. Everyones in the same wavelength at the end of
the day, Hispanics or not.
For proprietors similar to Romero, they raise the
same questions about this social war breaking out
between the old versus the modern. What exactly is
valuable? Is it truly only about profit, or does the value
of sentimentality instill more of a desire to keep a shop
open for consumers whove been faithful customers
for years on end? Perhaps most of these businesses
operated under conditions to cater to a family-oriented environment and saw most of these redevelopment changes as scare tactics to sway the council. For
Romero, along with many others, it is the last battle
to fight for local businesses that have been a part of

target a younger consumer base. He admits that for so

long downtown was faltering as other Orange County
centers such as South Coast Plaza were raking in the
customers and knew the four blocks of Downtown
Santa Ana werent thriving. Do we blend or create
different cultures? Do we throw away old models? I
believe they can both coexistold legacies and new
businesses can teach each other. Downtowns are
created for small shops, but developers visions are
trending. Its all business to them, he states.
When asked the same question as to whether
racism can be accounted for the changes being
implemented into this demographic shift when the
same ethnic demographic was pushing out the same
but older ethnic demographic, he answers, Consider
thisthe mayor, vice mayors, the city council-approved PBID are all Latinos. Everyone is Latino. Its all
business to them too. You have to appeal to developers,
and keep up what you own. However, whats unfair is
that developers will only do something once the city
funds them. Nothing was done for Fiesta Marketplace
and the reconstruction wasnt necessarily to help the
stores at Fiesta; it ultimately wiped them out. Buildings

Gentrification as a term seems a bit controversial.

Urban renewal is all about supply and demand.
the community for years. Its about holding onto what
Santa Ana is and to keep alive what it should be and
had been for so long.
While some businesses are for or against urban
revitalization, others evoke a neutral standpoint,
such as Kendrick of Rags International Newsstand. As
someone whos seen the Santa Anas market revitalize
over the past several years he understands that its all
a part of business. Gentrification as a term seems a
bit controversial. Urban renewal is all about supply
and demand, he states. Changes started being more
evident during the 70s in Washington which forced
some people out, including the gay community. Once
people moved, it changed the feel of the city. Its
the same with Santa Ana. Every city goes through it
whether they like it or not, Kendrick admits. Everything has to be done in the name of profit. Some people
are hit with the negatives, others with positives.
Robert Escalante of Custom Auto Service is
another longtime purveyor of the Downtown Santa
Ana district whos also witnessed the demographic
shift over the past several years. As someone who
doesnt need to worry about the future of his private
owned business, Robert also remains neutral on the
idea of revitalization, but nevertheless understands
the Latino/Hispanic retailers being driven out in order

Do we blend or create different cultures? Do we throw away

old models? I believe they can both coexist.
40 MARCH 2014

still look worn down as ever. Where will the Hispanics go? Where will they end up? The old and the new
should work together to move forward.
So where exactly will the baker, the chef or other
small business owners go? Who will look out for the
businesses that cannot keep up with the changes
initiated to reject the old and bring about the new?
Is it foolish to sentimentalize the old days of Fiesta Marketplace, and should the people of Santa Ana instead
embrace the newly refurbished commerce re-christened as East End? The battle causing the rift between
the working class and the federal/city government has
taken a toll on certain businesses that can no longer
keep up with redevelopment and will certainly die out,
lest they completely change their own business models.
At the end of the day, whatever definition different
businesses may have of gentrification and regardless
of the questions it raises regarding racism or social
class, revitalization is a sign of economic growth. Its
common for market changes to take place in businesses, and decisions are implemented in the name of
profit. As gentrification emphasizes, out with the old,
in with the new, this also applies to the redefined interpretation of urban redevelopment. However, some
may argue that businesses can progress if both the old
and modern can coexist to help each other in order
to thrive commercially, rather than using methods of
gentrification to push out those who cannot survive
the market. Business modes change every day to fit
the supply and demand of a consumer market base,
and downtown Santa Ana commerce is no exception
to the new transformation.