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Interview with Phil Yanov - Founder of GSATC

August 7, 2008

I recently talked with Phil Yanov of the GSA Technology Council.  We had a great discussion of Phil’s career to date, his involvement with different groups throughout the Upstate, what excites him about technology in the Upstate today, and how to infiltrate Bill Gates’ secret lair.

SCStartups: It seems like you’ve had a pretty solid career in IT since your graduation from Bob Jones University.  Can you give us some of the highlights from then up until now?

Phil Yanov: Coming out of Bob Jones, my interest was really in IT more than anything else.  I really would have been a computer science major, but at that time the university didn’t even offer it as a major.  While I was still in school, I worked for a small software company doing AS400 software development.  I was there for a little, and it wasn’t really my thing or something I was good at.  I then went off and worked for the very first “software-only” store in Greenville.  The name of the store was “Software One.”  I made a lot of great connections in the few years I was there.  Software One decided it was too early to have a software-only store, and that it couldn’t be ramped up quickly enough.  They sold the business, but they gave me a few clients with which I founded Phillip Yanov Associates.

So what did you do there?

I ran Philip Yanov Associates from ‘86 to ‘92.  We did software development, networking, and computer sales.  I always thought of us at a software development shop first.  (We mostly developed in Paradox!  They called these “third-generation” software environments.)

I built that into a little business until I sold it in ‘92.  I sold it to MidSouth Data Systems.  They were going through a consolidation and ramped that business up very quickly.  They went from a number of small cash register companies to bringing all of them together and creating the world’s largest reseller of IBM systems.  This became Kyrus Corporation.  We grew from about 43 employees to somewhere near 700 employees.

Was that an exciting time?

Absolutely.  I’ve always said that the ride up was spectacular.  The ride down, not so much.  You reach a peak there where you bring in a lot of folks, and you end up having to eventually downsize.  It was one of those things where coming from a small business to having hundreds of employees and always going through growth, I never realized I would become good at letting people go.  This was a very tough thing to do.

What happened next?

We parted ways in 2001.  After that, I had a bit of experience and wanted to run my own PR business.  I went off and did that for a little while.  Basically, I wasn’t really thinking about running a PR business, but running a PR hobby that would pay me.  That wasn’t a particularly good model.  It was fun, but it wasn’t greatly profitable.  For me, it was all about having a good time, and that didn’t really scale.

Did that lead to forming the GSA Technology Council?

I’m a self described recidivist community builder.  I helped start the very first PC users group back in 1983.  Over the first 15 years, I took on the job of President seven different times.  We ran a really great BBS system though, and with that as something that would attract people, we actually had more than 1,000 members.  We were larger than the Charlotte or Atlanta users groups at the time.  Around 1995, Microsoft flew me out to Seattle to find out what exactly it was we were doing that was so successful. It was a great chance to talk about what we were doing and share some ideas.  It was during the heyday of Windows 95, so I was able to see the inside of Bill Gates’ vault.

Was that inspiration for the GSATC?

It was a ton of fun, but I realized that I had really built a hobbyist group.  That was fine, but I became more interested in professional uses of computers than hobby uses of computers.  The idea was that I really wanted to create a professional organization that helped people build careers and companies around technology.

In September 2002, I wrote the first letters GSATC in my moleskin notebook and decided this is what the group of the future might look like.

What were some of the ideas you originally had for GSATC?

I thought then that it was for straight technology professionals – guys working in IT primarily.  I was really trying to think about people doing networking – how do they learn about new technology and get connected to it.  How did software developers decide upon platforms?  My career at that point had been in helping IT people meet their full potential and figure out their future technology roadmap.

That’s what we figured out with GSATC early on.  Let those people meet and get together.

How has GSATC expanded to help people get connected today?

The primary story of the GSATC is of just great growth.  We started off with 1,300 names in a mailing list in 2002, and now we have 11,000 or so – people exclusively in the Upstate.

We also went from IT only to IT plus entrepreneurs and now to include other technologies such as chemists or people involved in pharmaceuticals.  I’d say the biggest change is the growth and change in audience.  The change has been to expand our mission and continue to connect people.

Do you have a favorite anecdote to share of people that have been involved in the GSATC?

There’s a person that is building a software business here, and he and I originally connected when he used to come to the PC user meetings when he was in grade school.  A lot of the folks I know today I met when I was selling software and they were still in high school.  That’s very exciting to think that we’ve been able to help people get excited about technology.

What’s the first step for people to get involved with GSATC?

We try to get new people into the email list to let them know periodically of what is going on.  (Editor’s note: visit www.gsatc.org) Part of our mission is also to let everyone know about all the great technology groups out there.  This is why we have this calendar that display meetings for many different events and groups.  These groups are helping the point people in technology – people out there developing software, we help them get connected.

I’ve always noticed that a lot of smaller groups have failed because they didn’t find their audience before the original founder ran out of the enthusiasm to get it started.  We’ve always thought one of the things we could do is help someone trying to start a group is help them find those 20 or 40 people that share similar interests and help them get connected.  (Editor’s note: visit the GSATC calendar here.)

One of the recent events that has grown in popularity is Tech After 5.  What are your plans for it?

We started TA5 because people always said that they loved lunch meetings, but they didn’t get a chance to talk enough with each other.  We kept hearing that message, so we decided we needed to come up with an event that is a true networking event.  There’s a different crowd that just wants to talk with each other, and we want help those people meet.

I wasn’t sure this would work for a very long time, but we finally launched it in March of this year, and we’ve seen tremendous growth every month.

We built a simple model for people to connect – we get them to RSVP online, drop a business card in a bowl, you get a free beer, and then you’re on your own.  We know there are entrepreneurs, tech professionals and investors in that room - these are people that can help.  We’re going let you make something happen.

What are some of the things you’ve seen in Greenville that have you really excited?

At risk of leaving someone off, what Jim Oswald is doing at PinPoint GeoTech is a fascinating model.  His timing couldn’t be better.  They place GPS devices inside city trucks so that trucks can tag a problem they notice while driving.  Someone else can then come back to that problem.  The city dispatcher then gets the work ticket and adds it to a person’s job queue.  There is a great efficiency to be had here.  Think about all the big trucks with awful gas mileage rolling around the city.  They’re doing the best they can, but right now they don’t have the best information.  This service help cities get information to the right people.

I’m also excited about Innegrity.  They are making fibers that have most of the strength of Kevlar at a fraction of the price.  They’re in a mode where when they get real traction, they are going to become a fantastic business. (Innegrity just received a $15 million investment.  Read about it at the GSATC site. )

As far as Greenville goes, what do you think has gone well over the last few years, and what are the next steps to make the city even better?

There are so many people involved in making the city “better,” there is no one group – it’s our ability to come together and create the idea that we’re headed in the same direction.  For us to reach out and communicate.  Today, I can communicate with people like at the Upstate Carolina Angel Network and help them get companies in their pipeline.  We’ve really managed to fill in some gaps – we used to not have an angel network; we didn’t have FastTrac Venture Training.  We’re happy to be part of all of these things.  These things are dramatically different from where were five or six years together.

Why are you doing this?  Why not go be a partner in a PR firm?  Why do this?

I can’t help myself.  This is something that, when I started with the PC users group, I’ve done as a hobby most of my life and been lucky enough to stumble into some success with it.  The real thing for me has been to get people connected and make sure they have a good time.  It’s just the way I’m wired.

Written by Adam Steinberg · Filed Under Startups |  

Interview with Matt Dunbar of the Upstate Carolina Angel Network

August 4, 2008

Last week, I had the opportunity to talk with Matt Dunbar, the Managing Director of the Upstate Carolina Angel Network.  Matt is a graduate of Clemson University, and he recently returned to the upstate after earning his MBA from Stanford and spending several years with Boston Consulting Group in Atlanta.  Matt discusses his transition from consultant to managing director, entrepreneurship in the state, and the present and future of UCAN.

SCStartups: So Matt, you graduated from Clemson. Can you walk us through your career to now?

Matt Dunbar:  I graduated from Clemson in ‘99 with a Bachelor’s degree in Chemical Engineering and took a job with a company I co-oped with when I was in school, Eastman Chemical Company.  I worked for Eastman for about four years as a manufacturing engineer in one of their specialty plastics plants and in an applications development role working with our scientists and our customers to improve our product offerings to the marketplace.  Along the way I decided to shift my focus from engineering to business, and I was fortunate to have an opportunity to study at Stanford’s Graduate School of Business, so I ventured out west.  I earned an M.B.A as well as a Masters in Education while I was at Stanford from 2003-2005.

What led you to choose Stanford instead of an east coast school?

Quite frankly it was a combination of the strong academics at Stanford and a real sense of adventure and a kind of romantic concept of “go west young man.”  I love the landscape in California, and I took advantage of the weather to spend a lot of time outdoors hiking and fishing. Of course the classroom experience was phenomenal as well - with incredible exposure to some of the pioneers of Silicon Valley, as well as extraordinarily talented students and professors.  I had a great experience.

So what did you do after you graduated from Stanford?

I really enjoyed my time in California but long term I wanted to be back in the Southeast, so I set my sights on making a move back in that direction.  Also, I was pretty impressed with my classmates who had come out of the management consulting world, and I thought that their skill set was really compelling - strong analytics coupled with a unique ability to communicate clearly.  So given those drivers, I focused on seeking opportunities with the top management consulting firms that had offices in Southeast.  In the end I joined the Boston Consulting Group in Atlanta, so it accomplished both my goals of extending my business education  and getting back to the Southeast.  I came on with BCG in September of 2005 and was there for about two and a half years.

Of course one of the things I really enjoyed about Stanford was the tremendous exposure to entrepreneurship, and it planted the seeds for me to want to make a shift from the large corporate world to more entrepreneurial endeavors - so when the opportunity with UCAN came along it seemed like a great way to participate in the entrepreneurial space. It also allowed me to get back to South Carolina which is where I ultimately wanted to be.
What exactly is the Upstate Carolina Angel Network?

UCAN is a network of individual investors who seek to infuse equity capital into fast-growth, high-potential startup companies in the region.  These kinds of investors are known as “angels,” because they provide a source of capital between friends and family and institutional investors.  There has been a trend over the last decade or so for individual angel investors to form groups to improve their ability to screen, evaluate and negotiate investments, and there are about 300 angels groups around the country today.  Our group is a network in which each member makes his or her own investment decisions - in other words, we are not a committed fund.

UCAN was formed over the course of the last year or so by several folks around Greenville who had been involved in angel investing on an individual basis and in groups in other cities, such as Charleston.  They began exploring the interest in forming an angel group in the Upstate and had a strong response, so they put together a core team who hammered out the details and launched UCAN in April of this year.

How did you get involved with UCAN?

I attended a Clemson Renaissance Center event in January, and it just so happened that I stood in the buffet line next to JB Holeman (one of the founders of UCAN along with Tim Reed).  I mentioned my interest in returning to the Upstate, and he mentioned that UCAN was seeking a Managing Director.  Over the course the next couple of months or so, we stayed in touch, and I was invited to come up for an interview in April, and I came on board full time in May.

How do you fit into the day to day operations?

My job as Managing Director is to coordinate the overall investment process for our group - which entails everything from general administrative tasks to generating and screening deal flow to working with entrepreneurs on their presentations to working with our investors on due diligence and deal negotiations.   Fortunately, we have a strong Board and several committees who help carry the load.

What’s the current investment model?  Will you co-invest with other groups or VCs?

Our model is much like other investment groups - we are seeking preferred equity investments in early stage companies, primarily as a first tranche of capital beyond friends and family.  We are very much interested in syndicating with other angel groups, and have established relationships with a number of them in our region - we expect to share deals on a regular basis and are currently working on a joint due diligence effort with the Charleston Angel Partners.   We will also look to build strong relationships with VC firms to help develop a pipeline for our portfolio companies to seek additional capital as they grow.

Lets say I am an entrepreneur with a great idea and a solid team.  I’m interested in having UCAN fund my company.  What do you look for if you were to invest in our company?

After benchmarking with a number of other angel groups, our Board has recently set down some deal screening criteria that define what we’re seeking.  Primarily we are looking for companies that can achieve very rapid growth and have the potential to return ten times the investors’ money within 3-5 years - so in otherwords, these are not “lifestyle” type businesses.

Other screens we apply are geography (within about 4 hours drive-time of Greenville), valuation (generally less that $5 million pre-money), amount of capital sought (usually up to $1.5 million, although may be higher for syndicated deals).

From a business perspective, we are looking for a strong management team that’s trustworthy, passionate and articulate - and preferably with deep startup and industry experience.  If the management team doesn’t have that experience we at least need to see a Board or key advisors who can bring those critical skills to the table.  Of course we also need to see a compelling market need, a viable solution and a defensible competitive advantage for the company’s product.  Finally - there must be a viable, well-constructed, believable plan to execute against the opportunity - there are tons of great ideas out there, but we need to see a clear-cut path - from a sales and marketing standpoint - to “cross the chasm” from idea to viable fast-growth business.

That raises an interesting question (defensible position) about patents.  Some people say that patents are not necessary because if you are startup and you get sued by IBM, you won’t win anyways. What’s your view on that?

We like to see a defensible position. That doesn’t necessarily have to be a patent - especially in areas such as software, where there are so many ways to get around a patent anyway.  It’s quite possible that a strong patent position is an important part of building the company’s defensible position, particularly in industries such as materials and devices, in which case we put more emphasis on it, but overall we’re really looking at the company’s competitive advantage - which can come through many avenues, including patents, unique cost-structure, first-to-market timing, novel processes, etc.

Are you accepting executive summaries or business plans?

Yes.  We are taking business plans through out web site.  (www.upstateangels.org)  Click on the Entrepreneur’s page and follow the link to submit plans through AngelSoft.

How has the transition been from consulting world to the investing world in dealing with startups?

The nature of a large company is vastly different from startups, and there’s quite a bit of difference in thinking about what is critical for success given the stage of development.  However, there are many things that the consulting teaches you - especially how to analyze, prioritize and communicate - that are also critical skills for a role like this one.  It’s very challenging, but also great fun, and I’m learning a lot.  I really enjoy learning from our investors and from entrepreneurs, and I love being a part of the real engine of our  capitalist system - the risk-taking and hard work that drives the economy.

Have you noticed any trends in the ways large Fortune-500 companies do business that could help startups be successful at an early stage?

There are certainly lessons to be learned.  A strong management team is key in both - their ability to execute, prioritize and adjust to changing conditions is essential.  There are also great lessons to be learned about developing and implementing strategies that allocate precious, limited resources to the most-important, highest return uses.  Of course, the challenge that is unique to entrepreneurs is that they generally have to be more focused on short term cash flow - otherwise a great growth strategy can run you right out of business if you can’t generate the immediate cash needs to stay afloat until you reach critical mass.

As a native of Upstate South Carolina, what can the state and universities do to foster more innovation and help people start companies?

I think a lot of activity we are seeing now is absolutely along the right path to building out our entrepreneurial infrastructure.  We need to continue growing support for the whole spectrum of entrepreneurial activity - from invention to management training to entrepreneurial finance.
The research centers and tech transfer efforts at all three of our research universities are critical, as are efforts like the Clemson Renaissance Center and the state sponsored FastTrac program to expose entrepreneurs to the unique challenges of managing fast growing enterprises.   Seed and early stage funding through programs like SC Launch! is vital - and the state can do more to provide incentives and tax credits for those who choose to put risk capital to work in startup companies. Local economic development programs are also important, as are networking and professional programs such as the Greenville Chamber’s NEXT group.
All these efforts are important components of the big picture - and just like innovation in the most well respected companies - we need to continue refining our approaches, failing fast, and focusing resources on the programs that create the most impact.
Is there anything else you would like to add?
We just want to let people know that we are open for business and looking for good deals.  We also want them to know we intend to provide value-added capital - in other words, not just cash but also seasoned advice and experience from our members.

So does that mean you look to take board seats or advisory roles?

In most cases we would expect to have a Board seat in our portfolio companies, although in some cases we would take on observer status - especially if we invest in syndicate and  another group is represented on the Board.  Either way, we intend to be a resource so that a portfolio company CEO can call us up to help them navigate through their challenges.

Written by Adam Steinberg · Filed Under Blog, Venture Capital |  

Interview with Evan Tishuk of OrangeCoat

July 24, 2008

I recently talked with Evan Tishuk of OrangeCoat, a “gourment” web-design shop in Greenville.  We discussed his background, how OrangeCoat got started, and his views on Greenville as a technology town.  If you know of anyone that would like to share their story with SCStartups, shoot us an email!

SCStartups: So you went to undergraduate at Clemson – what did you do after graduation?

Evan: I graduated in 2002, with a degree in Computer Information Systems.

I was working for Sclumburger when I graduated, which had a plant near Walhalla. For Comp Sci students, it was a great co-oping opportunity. I stayed there for a while, and then I looked at the situation and saw that I didn’t want to be a career person at a large corporation.

My next move was to Greenville, where I worked for a local website design shop, and I started doing design and programming for them. The company began doing really well and had a couple of good projects coming down pipe. We then brought Adam (Evan’s co-founder at OrangeCoat) on to work in a limited capacity doing public relations and copy writing.

As we were going to bid on a pretty big project, Adam and I made a move to get a little more buy-in within the company. We asked if we could have an ownership stake, and we were basically told to “get out.”

So, we said: “we can do this better on our own.” That was the start of Orange Coat. That was in late 2003.

How did you go about getting first clients? Did you have to moonlight?

It was a really bad time for doing anything on the web. The tech bubble had burst and there were ashes everywhere. We were not in a good position to float forever, but we did have low-overhead going for us.

We were living in Clemson and trying to scrounge up anything we could find. Our strategy was to just do the best possible work, even if we were making less than minimum wage. We figured if could build up a reputation and portfolio, then we could continue to raise our rates until we gained traction and word of mouth from our network helped us generate more business.

Our first year was pretty lean. We got audited by State Treasurer because they didn’t believe we made so little money.

Our first sizable project came from a Google ad – a $10,000 project.  That kept the lights on and gave us confidence that we could succeed.

Did things ramp up from there?

Yeah, pretty slowly. We knocked out that project and learned the ropes of how to deal with clients. One of our biggest learning processes in our first few years was how to do project management. We had tons of energy but weren’t great at reading people and understanding the political implications of walking into a committee and making ten different people happy, justifying decision and instilling confidence in what we were  selling. That is probably the biggest barrier to entry for people getting into business now, and it’s something we had to learn the hard way.

We took a slow approach to ramping up. We’re both fairly conservative. We just wanted to take a slow approach to growth. We just kept our heads down and kept working.

Did OrangeCoat ever try to raise any money?

Nope.  Because OrangeCoat is a service, most investors were hesitant to fund us.  Investors are almost always looking for “product-based” companies.

We did try to do a side project in 2006 that involved a marketplace for widgets. The idea was to create a marketplace to give designers an outlet to sell components that weren’t just themes. Buttons or forms would be an example. Then, buyers could purchase snippets of code to assemble their own theme a la carte. However, the standardization just wasn’t in place at the time, and we ran into some issues. We had a business plan and presentation built, but we ended up tabling the idea to concentrate full-time on OrangeCoat.

What really makes OrangeCoat different from other web design firms?

I think our approach is a little bit different. We compete against a lot of different sets of companies – marketing firms with big ideas that farm out execution, strict technology firms that stick to RFPs, and consultants that do a lot of the business strategy and a bit of implementation.

We feel like our niche is focused on the web, equal parts, design, strategy and technology.

Will you help customers launch and put a revenue plan together?

Yes, we have three basic groups of clients. Entrepreneurs that will come to us. We’ll help them flesh out a plan and give them some ideas they may not have considered. Basically, leverage our knowledge. Whether or not they can do anything is another thing, but we will often give them a very reduced rate if we like them and what they are doing.

Another client is a business that is already established – mid to large companies that can’t afford an internal web department. They outsource work to us and we fill that gap.

The final group is large businesses that want really high-end and top-notch web design for a one-off project. Some examples might be doing flash cd-roms or presentations for a company like Fluor.

At heart we are really generalists by choice, and that keeps our tools sharp. The web is changing too rapidly to get too crystallized in one way of doing things.

Part of our mission is to have a flywheel spinning as fast as we can get it and have it spinning on its own. We do this so we can create projects on our own that will generate interest and gain traction.

We’re working on a couple side-projects. Keep your eyes on our blog for news. (http://www.orangecoat.com/blog)

What has Greenville been like as a place to start a business and how is it growing as a technology town?

We started in Clemson, but 85 percent of our clients were in Greenville, so it made sense to move here. We weren’t looking to go anywhere too radical like New York City. Being Clemson alums, there’s a certain desire to stick around, because this is such a great part of the country.

The business climate here has been great. In the past couple of years, we’ve seen an accelerated interest in technology. There’s still a lot of work to do but we can definitely see progress.

One of the challenges in attracting bright people is that Greenville can be perceived as a place that is just “family friendly,” as opposed to other areas in the country that have more progressive reputations.  Greenville isn’t there yet, but things are moving in the right directions. I’m excited to be here.

(Editor’s note: read more on Evan’s thoughts on Greenville on their blog - http://www.orangecoat.com/whats-greenvilles-message.)

If OrangeCoat could be anywhere in five years, where would that be?

I see OrangeCoat’s brand being synonymous with quality web design, and I’d like to see the idea of “gourmet” web-design grow.  With OrangeCoat, it’s going to be tough to create something else under that name.  I’d like to see OrangeCoat remain strong but move to the back seat as a blossoming side projects gains traction.

For myself, I hope to take a step back and enable a new group of people to take up the cause. Adam and I would like to have OrangeCoat at a place where, if we were to die in a plane crash coming back from Clemson National Championship, OrangeCoat would still exist.

Written by Adam Steinberg · Filed Under Startups |  

Tech After 5

July 11, 2008

One of the better networking events for startups in the upstate is Tech After 5 - hosted by Phil Yanov and the GSA Technology Council.  It’s a great opportunity to meet other entrepreneurs in the upstate and grab a beer.  (Sometimes, they even have prizes!)

The next TA5 event is happening next Wednesday, July 16.  Here are the details:

Wednesday, July 16, 2008
5:30 PM - 7:30 PM

Barley’s Taproom
25 W Washington St, Greenville, SC

Want more details?  Check ‘em at the GSATC website.

See you there!

Written by Adam Steinberg · Filed Under Startups |  

Revving the engine

July 7, 2008

Thanks for visiting the new South Carolina Startup blog.  Per our name, we’ll be covering all of the latest happenings in the startup scene around South Carolina and also hopefully providing a central network for entrepreneurs in the state to gather and share information.

We’re looking for entrepreneurs and investors of all shapes and sizes to tell their stories as we get the blog off the ground.  If you’d like to do an interview, publish a company announcement, or are interested in writing a guest article ping me at asteinb at gmail dot com.

Posts will start in the next week or so.  If you want to follow the blog via twitter, follow AdamS472.  Once Twitter decides to start working again we’ll setup a SCStartups account.

Thanks,

- Adam

Written by Adam Steinberg · Filed Under Blog, Startups |  

Welcome to the South Carolina Startup Blog

July 3, 2008

SpringStage is a new startup founded by David Cohen, Alexander Muse and Micah Baldwin. Our objective is to build a network of online, offline and media properties in an effort to promote entrepreneurship. Our focus is on local community development and in an effort to generate local content we are looking for a writer who is connected to the regional startup scene to blog about startups, entrepreneurs, venture capital and interesting people in your area. If this sounds interesting apply online below: http://www.texasstartupblog.com/startups/startup-blog-network/

Written by Adam Steinberg · Filed Under Startups |