bizSanDiego the business of san diego county

Gen X and Y Entrepreneurial DNA posted on January 7, 2008

One’s a rock star, one’s the rock star’s wife, one’s a technologist and an aviator, one’s a social marketer and one’s got an environmental conscience. They have different makeups, but these twentysomethings and thirtysomethings have all chosen entrepreneurial paths.

Story by Jon Hindman Photos by Kevin Lock

Not every entrepreneur had a lemonade stand as a kid. Not every entrepreneur was the top candy salesperson in school fundraisers. Not every entrepreneur is willing to bootstrap their company to the point of near destitution to reach their dreams. In fact, entrepreneurs have such a wide range of appearances, personalities, special skills, educational backgrounds and management styles that it’s often next to impossible to recognize who’s an entrepreneur and who isn’t.

Read on to get a snapshot into the lives of five entrepreneurs pursuing their dreams, doing what they love and posting a profit at the same time.

Open Airwaves
San Diego isn’t Seattle. The local music scene can’t boast Hendrix, Pearl Jam, Foo Fighters, Alice In Chains, Soundgarden, Nirvana and a slew of other famous bands and musicians that were thrust out of Seattle’s music incubator. But a few bands have made an indelible mark—namely Unwritten Law and Blink-182.

The latter was formed in part by Tom DeLonge—born and raised in Poway—who has one of those inspirational stories you can’t ignore.

When DeLonge was 13, one of his friends gave him a guitar for his birthday. It was nothing quite like the Fenders and Gibsons he wails on today.

“It was a really old beaten guitar worth about 20 bucks,” he says.

And even though he picked up the instrument quick, and had the singing voice to match his newfound talent, being in a band wasn’t his first calling.

“I was originally going to be a firefighter. I was in the San Diego Cadet Program,” says DeLonge.

Not that it would have been a bad career choice, but it was a far cry from what he ended up doing. And the reason he decided to pursue rock stardom over firefighting: “They yelled at me to do pushups. Well, then rock and roll seemed better,” he jokes.

So while still in high school, DeLonge and Scott Raynor formed Blink-182, which had a successful run from 1992 to 2005, enjoying the bulk of its commercialism after the release of Enema of the State in 1999. Raynor, as many die-hard fans of the band know, was kicked out of the band for a drinking problem that pretty much severed the tie between him and DeLonge.

That’s probably one of the biggest controversies surrounding the 32-year old punk rock icon, who seems to have set himself up well, not only in the realm of music, but in the business world, as well.

About 10 years ago, when Blink-182 was still dreaming of gold records, DeLonge had his sights set on the long term.

“I was sure we wouldn’t continue to sell records,” he says. So [going into business] was an insurance policy of sorts.”

With a $20,000 investment, the budding entrepreneur started a holding group called Really Likable People (RLP), which now encompasses a few different companies. The mini empire that he’s built started with Loserkids.com, a website specializing in youth-branded apparel. Despite the Loserkids.com moniker, DeLonge has proved to be anything but, even though he does admit being a little lazy in his early rock and roll days, stating that he and his fellow band members never practiced and didn’t pay any attention to the business side of the music industry.

That hasn’t been the case with RLP, which also encompasses Macbeth Footwear, a rock and roll–inspired shoe company. And at one time, before it was sold, Atticus Clothing, a T-shirt brand, was also under the auspices of RLP.

He juggles his business seamlessly with his newest music pursuit, Angels & Air¬waves, which was started in 2005 and recently launched its second album, I-Empire.

Yet DeLonge never seems satisfied and is already in the midst of his newest venture, Modlife.com, a Web-based operating system designed to help usher in a revolution of media, starting with music. The launch will be this spring, and there’s already a large buzz surrounding it. The preview of what’s to come for Modlife.com can be found on the Angels & Airwaves website, www.modlife.com/angelsandairwaves.

DeLonge opts not to share revenue numbers for his private company, but does disclose that in hopes of possibly taking RLP public, it was recently valued at $12 million. And that’s not including the Modlife.com component, which, if it’s anything on the scale of MySpace (it was designed to rival the popular social media site) could potentially increase that value tenfold. Right now, DeLonge has about 20 U.S. employees who work out of his San Diego office, and he also has offices in London and Australia.

“Tom is such a leader in his entrepreneurial drive and spirit,” says his wife, Jennifer, an entrepreneur in her own right. “He is constantly thinking and innovating and pushing the limit. Whether it’s in music or business, he doesn’t believe anything cannot be done, and he is infectious with his pursuits.”

Jennifer, a self-described “Navy brat” who was raised in Coronado, Maryland and Texas, met DeLonge in high school through a mutual friend. She, like DeLonge, wasn’t very wishy-washy on her career path. She wanted to be a designer, and she wanted to be in business for herself.

Her road to being an entrepreneur started long before she graduated from San Diego State University with a bachelor’s in fine art.

“I was actually a designer from a very young age without even realizing it,” says Jennifer, 33. “I was always designing art projects. I love art and design and definitely had an entrepreneurial spirit at a young age.”

A year before marrying DeLonge in 2001, Jennifer started her first business, Jennifer Jay Design Firm. Just like DeLonge’s first venture, it was self-funded, squashing any thoughts that she was only able to work for herself because her husband is a rock star. And, she admits, the business had its early struggles.

“Like your first time doing many things in life, [the startup] had many obstacles in the beginning,” she says. “I had no problem with the client base, but as a creative type, it was difficult to understand the business side initially.”

Not one to give up, though, she trudged through and has gained notoriety with her second design company, Jennifer DeLonge Children’s Furniture, which she had inspiration for starting up when her daughter (the oldest of two children the couple has) was about a year and a half old.

While she also chooses not to disclose revenue numbers, her company’s success can be shown in other ways. Her children’s furniture is now in retail giant Barney’s New York, Giggle and Modern Tots, in addition to dozens of upscale boutiques across the country. Additionally, she’s built a strong base of celebrity clientele, including Gwyneth Paltrow, Courteney Cox Arquette and Debra Messing and Mira Sorvino.

Next up for Jennifer was MommaMust Haves.com, a fashion and interior design website specifically geared toward mothers. As Jennifer maintains, “Just because you’re a mom doesn’t mean you have to check your style at the door.”

Somehow she manages to run her companies with only six employees, a few of whom are freelancers, and shares office space with her hubbie. And she can afford to work only a few days a week, because she’s also dedicated to her child¬¬ren and, of course, her husband (“I’m his biggest supporter,” she says).

When it doesn’t disrupt their lives too much, the entire family goes on tour with Angels & Air-waves. They have their own tour bus to emulate “normal” home life as best they can.

The DeLonges may have more tricks up their entrepreneurial sleeves, though they are pretty tight-lipped about what’s on the horizon. Optimistic for his wife’s future success, however, DeLonge says, “Her company will far surpass mine someday.”

Renegade Tech Aviator
If you’re going to have a hobby, don’t make it an expensive one. But if it is a really expensive one, you’d better figure out how to support it.

Tyson McDowell chose one of the ex-pensive hobbies: flying planes. And the 25-year-old founder and CEO of Benchmark Revenue Management realized that to purchase his own planes and log lots of air time, he’d have to go into business for himself.

“Planes are very much why I started Benchmark, but not directly,” says McDowell. “I always say that I went into business to fly airplanes, but I actually love to solve problems. I love being involved in complex transactions. When I’m doing business, I dream about business, and when I’m flying in airplanes I dream about business.”

However, with inauspicious beginnings, McDowell’s entrepreneurial dreams appeared a bit risky. Imagine this scenario: Four former co-workers decide they want to go into business together with no real plan of action in place, no product or service and no clear direction of what the future would hold. That pretty much describes the infant stages of Benchmark in a nutshell.

“The original concept of Benchmark was—well, actually, there was no concept,” McDowell admits. “Instead, we all liked each other and wanted to work together. We even came up with a logo and a business card but had no idea what we were going to do.”

The year was 2002. And believe it or not, about three months into the business, while he and his partners had come up with product names like Date Magic and Gizmo, they still had nothing concrete in the pipeline. Then one day McDowell approached the other founders with an idea that would finally lay the framework for Benchmark’s current software offering.

McDowell, who never went to college and learned programming on his own—quite the “renegade pilot software guy,” as he calls himself—conceived the company’s RADE2 technology, which would ultimately take two years to create. During this time, he and the other founders bootstrapped the operation. His personal persistence to see the project through to the end equated to a load of credit card debt.

Things didn’t get much better once the RADE2 technology was seemingly ready for prime time.

According to McDowell, “The generic technology wasn’t selling. It was a black hole for venture capital. We were four guys in a 400-square-foot room, and everyone was out of money.”

That’s when they segued into tailoring the software for the health-care market. The reason: McDowell and his partners had done some due diligence and realized that “health care had highly reactive architecture with technology built out of necessity instead of out of ideal,” he says.

McDowell continues to explain that hospitals lose a massive amount of money each year due to various billing issues and denials. Some hospitals have a collection rate of less than 70%, which is unheard of in just about any other industry. Enter Benchmark, which designed its RADE2 technology to reverse-engineer the health-care billing process to ensure that hospitals start receiving more of the money they’re owed.

Benchmark’s first customer realized a 14% increase in cash collection and a 30% reduction in denial write-offs in just the first 90 days. After one year, the customer reported a revenue gain of $20 million over the prior year.

Suddenly the Mission Valley–based company was really on to something big. It had a proven product, was starting to make money, hired more employees (10 are on staff currently), and it even had investor interest. In 2004, one of its industry partners, Navigant Consulting, provided $1.7 million in non-equity seed financing and, more recently, Benchmark started a $6 million VC round to fund its rapid expansion. In 2008, Benchmark’s revenue is projected at about $1.2 million, and three years from now, revenue is expected to be more than $15 million.

McDowell doesn’t seem too concerned about losing shares of his company to VCs, and would start another venture down the road if push came to shove. But, he says, “I want to be there for 30 more years, if possible.”

Thank You for Not Smoking
In Sin City, Jeff Jordan was making a difference, and he wasn’t even out of high school. And in this case, what happened in Vegas didn’t stay in Vegas.

“I had gotten involved, when I was 16, in an anti-tobacco youth movement in Las Vegas where I grew up,” says Jordan, a Peruvian-American who is now only 23. He was particularly exposed to the marketing and advertising side of the anti-tobacco campaign he was working on, which is a big reason why in 2001, he decided to start up his own youth marketing and advertising company, Rescue Social Change Group (RSCG). But the focus, at first, wasn’t to take on clients solely in the realm of enacting social change.

“Tobacco just happened to be our first client, but there wasn’t a huge determination at first that we were going to focus on social change,” Jordan admits. “Then, as I got more into the field and started to read more on the scientific side and learn more about what social marketing was, I started to really see an opportunity for a niche.”

He also noticed that there was a lot of money being spent on behavior change from the federal government to nonprofits to even the state and city levels, though many campaigns were producing few, if any, results.

And another thing he realized he wanted to avoid was to only take on a few nonprofit “pet projects” each year like many agencies do. Not that there’s anything wrong with that approach, but Jordan felt a calling toward a 100% dedication to social change and moved in that direction with catlike speed.

The business started to flourish while Jordan was in college at Johnson & Wales University in Providence, R.I., where he received his bachelor’s in marketing in 2005. Soon after, he moved to California and chose to base his company in down¬¬town San Diego. It’s a move he says he doesn’t regret in the least, because the West Coast—San Diego in particular—is the source of a lot of youth culture and trendsetting movements. RSCG’s work currently consists of tobacco prevention, after-school program promotion, under-age drinking prevention and promotion of volunteerism. It serves a client list that spans 18 states.

Never completely satisfied with the work he’s doing, Jordan constantly looks for ways to improve himself, his company and the knowledge of others. In 2007, Jordan was accepted into the extremely competitive Experimental Psychology program at UCSD where he’s now pursuing a Ph.D. for his studies in behavior change. In addition, RSCG has published a book about social change management titled The Social Branding Dogma, and Jordan has visited more than 40 states and made countless presentations on the progressive practices of his company.

As a testament to what he continues to build at RSCG, team members moved from Rhode Island, Nevada, Washington, Michigan and New Jersey to join the rescue team. His vision and commitment to positive social change continues to draw new team members to RSCG. About a year ago, RSCG had 14 employees, and currently that count is up to 25. Revenue is steadily increasing, as well. In 2006, revenue was $1.2 million, and in 2007 it will report revenue of about $1.8 million. That growth is just the beginning, at least that’s what Jordan hopes. He plans to take his company to greater heights by opening offices in other U.S. cities and attacking a greater number of social change issues.

That might not be easy, though, because there are still hurdles Jordan has to jump to take his company to the next level.

“We’re at a point right now where we’re trying to break through a glass barrier,” he says. “The approach we promote requires government and counties to rethink the way they fund and evaluate what they do. For us to continue to grow, we need a number of people to take risks and look at these issues in a different way.”

Will that happen? Maybe. Maybe not. But for Jordan, who believes that passion equals success, failure is not an option. He says he’ll find a way for the RSCG train to keep rolling somehow, someway.

Clean and Green Christine McDannell, a “valley girl” from Los Angeles, actually owns up to running her own lemonade stand as a child, and she’s confident that being an entrepreneur was in her blood.

Starting up her own company didn’t take shape until after a five-year stint in her first career, however. Directly out of high school, McDannell obtained her real estate license and became a property manager soon after. She says she enjoyed it, but she now muses, “Working weekends would be difficult, and I never stayed at one job for more than a year. I couldn’t figure out why. Recently I started to look back, and I think that was because it’s difficult for me to work for other people.”

But, truth be told, property management is what brought her to San Diego in 2001, and it’s also an experience that led her to start her cleaning business, Normal Heights–based Cleanology in 2003.

“Being in real estate, it was difficult to find a professional, trustworthy cleaning company that would show up on time and do what they said they’d do,” says McDowell.

Then one day, while browsing through the San Diego Union-Tribune classifieds for businesses for sale, she came upon an ad for a cleaning company. Her interest was instantly peaked, and after meeting the seller, she was convinced that she was ready to run her own company.

There was just one problem: “The bank didn’t want to give an unsecured loan to a 23-year-old,” she says with a chuckle.

So, instead, she bit the bullet and came up with her own concept, hired two employees and spent every day in the trenches cleaning homes. It was ironic, she says, because up until that time, she had paid someone else to clean her own house.

Luckily the business was not very capital intensive, and while the first year and a half she had to get down and dirty to keep her company afloat, she doesn’t regret a second of it. She survived the first year, and now, four years later, growth is coming much quicker and easier. She has 24 employees under her wings, her 2007 revenue hit $425,000, and next year she’s optimistic that the company will surpass the $500,000 revenue mark.

McDannell attributes this growth to a few factors. One example was that from the very beginng stages of Cleanology she set out to provide customer service that can be compared to Nordstrom. “I know it sounds funny,” she says, “but I want to give people the best customer service possible. That’s one thing I see missing in this industry.”

Another gap she instantly noticed in the cleaning industry was the lack of a green conscience. Looking for an edge up, coupled with the fact that she considers herself to have an extremely environmental awareness, she strategically decided to implement a strict recycling program, shuttle crews around town to reduce fuel consumption and harmful emissions and only use products that are safe for the environment, people and pets.

Plus, as a panderer to a dog and cat, she was particularly surprised that cleaning companies generally didn’t cater to their client’s four-legged friends.

“I know how stressful it can be to think, ‘what am I going to do with my pets, and will the cleaning products be harmful in any way if they stay.’ A lot of cleaning companies won’t even allow pets to be at the house,” she sympathizes. “We’re totally opposite. We love our clients’ pets. The girls bring dog treats with them to the houses, clean around the pets, and the products we use won’t harm them.”

Cleanology’s customer service principles and dedication to being green does drive up costs that are passed on to the customers.

“We’re not the most expensive cleaning company in San Diego, but we’re definitely priced above the average industry rate,” says McDannell.

Higher pricing hasn’t hurt Cleanology’s business one bit, however. McDannell’s customers appreciate her corporate values, because while she admits it’s one of the oldest clichés in the book, she adds, “You get what you pay for.”