San Diego’s Wireless Industry Establishes Startup Incubator
At a time when communications startups are about as rare in San Diego as a newborn Panda at the zoo, the local wireless industry is delivering a nursery. CommNexus, the San Diego communications industry group, and San Diego-based Leap Wireless (NASDAQ: LEAP) are establishing a non-profit business incubator here to nurture startups developing communications technologies.
CommNexus CEO Rory Moore tells me that San Diego’s new business incubator, dubbed EvoNexus, is intended to provide a safe harbor for entrepreneurs who have been caught in the worst recession in decades. “We have a lot of very talented engineers who have been laid off,” says Moore, who was a founder or co-founder of seven companies, including San Diego’s Silicon Wave and Peregrine Semiconductor. “Two years ago, the best and brightest kids were sucked up from the Jacobs School of Engineering at UCSD, and now they can’t find a job.”
In an e-mail blast sent to thousands of recipients yesterday afternoon, CommNexus issued a “call for applications” that invites telecom-minded entrepreneurs to launch their startup in the new incubator, dubbed EvoNexus. The incubator hopes to host one or two startups by July and as many as 10 by the end of the year, according to Cathy Pucher, executive director of EvoNexus.
Pucher says she’s targeting startups that specialize in communications and communications convergence technologies, such as in wireless life sciences, or wireless smart grid equipment. Among other things, applicants will be judged on the soundness of their development plan, target market, domain experience, and willingness to participate in entrepreneurial education programs. Pucher is a longtime industry veteran currently a co-founder and executive vice president at HuTribe, a San Diego startup focused on mobile social management applications.
The EvoNexus incubator will provide free and fully furnished office space, utilities, Internet access, and education and business mentoring by local executives and other volunteers. Startups will be allowed to stay for as long as two years, and will have no financial or other obligations to EvoNexus after they depart.
San Diego-based Leap Wireless, which provides low-cost wireless services through its Cricket Communications subsidiary, is donating office space for the incubator in Sorrento Valley, where Qualcomm and scores of other tech companies reside.
Moore acknowledges that getting venture funding for such startups is another matter. “It’s miserably hard for a company to get funded in the seed round here, and the angel network isn’t that great either,” he says. “As an entrepreneur, you have to figure out how to bootstrap.”
Moore also conceded that technology incubators have had mixed success—especially over the past decade. Dozens of high-flying, for-profit Internet incubators—including San Diego’s IdeaEDGE—flamed out after the dot-com bubble popped in early 2000. Nevertheless, he contends San Diego needs something like this. Moore also says the incubator model has been successful among some of Silicon Valley most-prominent venture capital firms.
“The community understands that we have to do things a little differently, because things are different here,” Moore says. “The advantage that Cathy will have is access to other forms of capital and access to in-kind contributions.”
Tyler Orion, former executive director of a group of technology incubators known as the Pacific Incubation Network, tells me she’s pleased to see CommNexus make the attempt. “The combination of pre-screening for credible business concepts, plus mentoring, plus a strong director, plus a nurturing start-up environment has been proven time and again to contribute substantially to launching viable companies,” Orion says. We haven’t had great success with incubators ‘with walls’ in San Diego, but the incubation model definitely has been proven in other communities and I’m still a fan.”
The decision to create the incubator also reflects strong support among the CommNexus board members who represent many of San Diego’s biggest tech companies. “The entire board of directors of CommNexus is behind this,” Moore says. “And when I say Qualcomm is behind it, they are behind it in ways that I can’t talk about, along with other companies like Nokia, LG, and Peregrine Semiconductor.”
Even during the current VC funding drought, Moore says entrepreneurs with the right technology and a compelling business plan stand a better chance to get funding at the incubator, which will at least give them easier “access to the right people.” Local executives, engineers, and other professionals who support San Diego’s venture community have committed to volunteer as advisors, instructors and startup mentors.
Moore is a competitive aerobatic pilot, and he sounded characteristically brash and confident during our conversation. After nine months of economic retreat, and at a time when the vacancy rate of San Diego’s commercial office space is approaching 28 percent, Moore seems to view the incubator almost as a line in the sand. Sure enough, in a statement issued late yesterday, Moore says, “EvoNexus is a rallying point for our community to be proactive towards developing successful companies irrespective of the challenges we face.”
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