INSIDE INNOVATION; Incubator takes media startups under its wing; Digital Media Center incubator in Santa Ana works to create high-wage jobs
BYLINE: COLIN STEWART
This is the first of two columns on local business incubators. Today's focus is the Digital Media Center incubator in Santa Ana. Thursday's column will be about a new incubator that UC Irvine is helping to create.
A startup business can fail for so many reasons.
Maybe its prices are too high, its customer service is poor, or its marketing is lame.
Maybe its founder is a brilliant inventor who turns out to be an overwhelmed and disorganized chief executive.
But the chance of such failures is reduced if the startup can grow in the shelter of a business incubator such as the one in the new Digital Media Center in Santa Ana.
"We're here to assist," incubator director Bart Hoffman says, too simply. His incubator gives innovative startups high-quality, low-cost office space. But the more important boost is putting them in touch with experienced advisers, potential investors and strategic partners.
If it does its job right, the incubator can whittle business uncertainties to little more than one key question: Does the business offer a product or service that customers want at a price they can afford?
If the answer to that question is "no," an incubator can't turn your startup into a "yes." But an incubator can help remove obstacles that might prevent a potentially profitable business from ever learning the answer to that question.
GOALS FOR GROWTH
The mission of the Digital Media Center's incubator is to encourage the development of young businesses in digital entertainment and online media, including digital audio, digital video, Web software and Web content development.
The incubator is still too new to be judged as a success or a failure, but it is working with businesses that fit its mission -- two have ties to Hollywood, one is developing Web software.
The online business,Clupedia, has eight employees in six offices who are building a Web browser add-on that will accept and organize comments and ratings about people, companies, products, services, pets, or anything on the Web.
The two Hollywood-related businesses are smaller.MaMoCais developing a system for recording the movements of people or animals for use in creating animation.Teresis Media Managementstores and tracks video footage for television editors and producers.
The idea for the Digital Media Center goes back to 2000, when a county economic-development committee and the Orange County Business Council identified the digital media industry as Orange County's most promising sector for high-growth companies and high-wage jobs.
With support from the city of Santa Ana, a federal grant, and the Rancho Santiago Community College District, the $13.5 million center opened last summer. It provides space for Santa Ana College's television, video and digital arts programs as well as for the nonprofit incubator.
Most of the 24 incubator offices are under construction, with completion scheduled for July.
MEETING NEEDS
To be eligible for help from the incubator, a business must convince Hoffman and his advisory board that it will offer a unique product or service, has a competitive advantage, and will create good-paying jobs.
When a young business moves in, Hoffman determines its shortcomings and sets about remedying them. For example, does the entrepreneur need advice on business basics? Hoffman might bring in experts from the Orange County Small Business Development Center.
In contrast to other startups that are operating on a shoestring, companies in the incubator tend to have an easier time attracting investors and talented employees because they're based in high-tech office space, with fast broadband service, videoconferencing, and wireless connectivity.
"Having such facilities gives us a lot of credibility ... at an incredible price," said David Saad, founder of Clupedia. "It allows us to attract talent and project (the image of) a really well-established company, as opposed to a garage-type operation."
In the incubator, rent is $1.70 per square foot, about 30 percent less than the average for large office buildings in Orange County.
MaMoCa founder Gene Alexander is looking forward to using Santa Ana College's TV studio, which is downstairs in the Digital Media Center. "It's probably going to end up saving us hundreds of thousands of dollars," he said.
For Hoffman, the key is the incubator's lounge.
"That's where they can talk about their business, develop relationships with other businesses in here, and create strategic partnerships," he said. "When we have 10 or 15 businesses in this incubator, toward the latter part of this year, those relationships and strategic partnerships will begin to develop."
One of the incubator's goals is to create 150 jobs. So far, its three businesses have created just six jobs, but each one has raised money that will make expansion possible.
If all goes well, the startups will outgrow the incubator quickly, long before they reach the suggested three-year limit on their time there.
Saad, for example, says Clupedia might be out of the incubator within a year.
"We hope that we're going to outgrow this space as soon as possible," he said. "That's going to be very good news."
On site:Bart Hoffman, outside the Digital Media Center, encourages building business relationships.
cstewart@ocregister.com or 714-796-7841