Friday, May 14, 2010
Interview with Matthew Jenusaitis, OCTANe
Story by Benjamin F. Kuo
It's been just about a year since Matthew Jenusaitis took the reins at OCTANE (www.octaneoc.org), the Orange County-based organization which has been looking to spur the high technology industry in the area, so we thought we'd talk Matthew about how that year has gone, the group's recent merger with the Orange County Venture Group (OCVG) and the upcoming VC in the OC conference, and what Orange County's biggest challenges are in the high tech area.
Thanks for the time this morning. How has your first year been?
Matthew Jenusaitis: Overall, I am real happy with the first year, both from a personal point of view, as well as for the organization. A lot of people had asked me why I was taking the job, since I was a commercial guy, had been a commercial general manager, and had been running companies for my whole career. They asked me why I was interested in a nonprofit? But, I really enjoyed doing this, because I was at the point in my career where I wanted to give something back.
Clearly, 2009 was not a good year, from the perspective of the technology innovation ecosystem. That was primarily driven by the economy; when the economy is down, investments are down, and it is increasingly difficult to d a startup. At the same time, the need for the products and services that OCTANe provides are greater in a recessionary economy than in when the economy is booming. Technology and innovation has historically been the thing that has pulled the economy out of recessions, and I think that is especially true right now. The demand for our products and services is really high, unemployment is high, the need for new technology is high, as is the need to increase efficiency from businesses. For OCTANe to be successful, we want to see our technology ecosystem grow.
I have also been very happy with our organization. We've got a relatively small organization--just five full time employees and usually somewhere between six and seven in total including interns and contractors--but I've been impressed with what we've been accomplish in my first year. Generally speaking, I'm really just been along for the ride this first year, learning how Cynthia, Luis, and Janelle run the day to day activities. Last year, we did fifty different educational programs, talking to on the order of 10,000 people in those fifty programs. The second big accomplishment last year was the retooling of our Launchpad process. Launchpad is a virtual incubator and accelerator, where we put companies in and give them quantitative and qualitative feedback and mentorship. In the last year, Luis has torn down the program and rebuilt it, and together we've put together a program which is much more robust and provides even more valuable insight, and is running better than it has ever been running before.
I think the biggest accomplishment, however, is our relationships with the universities. Historically, OCTANe has been loosely married to UC Irvine, where OCTANe first started five or six years ago. As you know, it was started by the Vice Chancellors at UCI and Dwight Decker, who really got together and got things going. However, it didn't feel like we were firing on all cylinders, functionally speaking, until the last year, when we made pretty good strides not only in improving our relations with UC Irvine, but also expanding our university relationships with Chapman and Cal State Fullerton. Chapman in particular has been a big supporter of OCTANe and a group we enjoy doing programs with.
So what are the major issues you're now tackling as an organization?
Matthew Jenusaitis: In the year going forward, clearly the biggest issues is investment dollars. In order for startup ecosystem to really flourish, you need to pump money into the system. It's been kind of lean. There are a couple of good things going on, but that's where the challenges lie. I think the investment economy is coming back, and first quarter numbers through Thomson Reuters really suggest Q1 is positive--both in terms of exits and the potential to get money back. There was also a fair amount of early stage investment, more so than in the past few years, which is a really positive sign. However, our challenge is that there are not a lot of venture capital investors in Southern California. The geographic epicenter for investors is really in the Bay Area, and we have kind of a paucity of investors in Southern California. I think the big challenge, is to take advantage of the homogenization of the West Coast--the corridor between San Francisco and San Diego--and taking advantage of the fact that things are becoming more blended. You have to give thanks to Southwest Airlines and Virgin America for their $39 flights, which makes it a day trip to SFO or San Jose. There's also all of these technologies--such as GoToMeeting--which helps the flow of information between Norcal and Socal become better. I think the biggest challenge we have, is to get these investors to see that the startup world is not totally based in the Bay Area, that we have a whole, West-coast ecosystem, which Orange County is a part of. We want to make ourselves more visible to the myriad of investors out there. The second thing is the stuff we have been doing--education, networking, and connections--and getting that primordial soup stirred up and catalyzed.
If you were to tell investors about Orange County's strengths, what would you say?
Matthew Jenusaitis: If you take a look at the hottest sectors of investments, it's healthcare and medical devices, information technology, and clean technology. Those are the three biggest innovation clusters Orange County really has. Orange County is also pretty rich in intellectual horsepower. If you measure it in terms of patents generated, measure it in terms of the number of technical jobs per 100,000 residents--it's very high on all analytical measurements. You see that it's pretty high here in Orange County, as it is in San Diego. It's also high in Los Angeles, but I think per-capita it gets pretty diluted, due to the huge population. But, as a whole, the Southern California region is pretty technology dense. The biggest message I strive to communicate to investors, is it's a pretty good place to do business.
Let's talk a bit about VC in the OC, which is next week--what's the story there on your merger with the OCVG?
Matthe Jenusaitis: One of the things I first noticed when I came into OCTANe, is there are lots of nonprofits out there trying to essentially do similar things. There are lots of good ones out there, but economically, it doesn't make sense to have five or six out there. One of the things we did was try to identify the two or three that were really great, and figure out how to collaborate. OCVG was one of those, and what we ended up doing was merging with OCVG to create a single organization. I think that that brings more value to our constituents, creates less of a tax burden on sponsors, and provides more value to sponsors. It also provides more clarity in the ecosystem. VC in the OC is really the first product of that merger. OCVG had historically done VC in the OC in the fall, and OCTANe had done something around innovation in the spring, and by combining the two we've been able to deepen the content. We now have a full day meeting, and close to 400 people signed up. Our keynote is Neel Kashkari, former Assistant Secretary of the Treasury, who engineered the TARP bailout. We also have panel discussions on clean tech, life sciences, gaming, information technology, and digital media. We also have 80 different companies, a melting pot of innovative technology, investors, and investment presentations. We hope that will go a long way to stimulate the ecosystem.
What would you like to see most, a year from now in Orange County?
Matthe Jenusaitis: I'd like to see another half dozen or more startups, because the multiplier effect for high tech startups is 3:1 in terms of jobs. If you get ten companies funded and going, those ten companies might hire ten new employees, creating a total of a hundred jobs. That multipler creates 200 more jobs in related areas, so we end up creating 300 more jobs in the area. That will not revolutionize the economy in Orange County, but it will help. It puts things in a positive direction. Everything is a little bit of building on what you've done before. We'd also like to see OCTANe grow and flourish. We'd like to see people recognize all the things we can do, and be more engaged--and with a higher level of engagement, the more effective we can be in driving things like new technology startups.
Thanks, and good luck!