Home Back Issues August 2010 Young business leaders ignite startup scene

Young business leaders ignite startup scene

| Print |  Email
Articles - August 2010
Wednesday, July 21, 2010
Article Index
Young business leaders ignite startup scene
Page 2
Page 3
Page 4
Page 5, Reader Comments


John Friess was 23 years old when he and his brother launched Wired.MD, the first company to stream patient education videos into the exam room.

“This was in 1999,” he says, grinning and speaking loudly over the late-afternoon din of the Backspace crowd. “You could write a business plan, launch a software application and get acquired about six weeks later. Naively we were thinking this was going to be a year, maybe two years. It’s been 10 years.”

Friess and his brother Mark founded Wired.MD on March 13, 2000. On April 14, 2000, the tech bubble burst. It took time and work, but they survived the bust, with more than a little help from their peers.

As the crash was playing out, Friess found himself standing in the Oregon Zoo parking lot one evening after an Oregon Entrepreneurs Network event, talking with a circle of tech company founders for hours. “I realized that this was the most valuable interaction possible,” he says, “other founders of other start-ups, talking about the problems and solutions we had found. We were joking we should start our own group, for founders only. No one else can come in, because we’re naïve, we’re pathetic, but we also have a lot of potential. That was the impetus for Starve Ups.”

Starve Ups held its first meeting on Oct. 15, 2000, with founding companies Wired.MD, Rumblefish, Asset Exchange, viaLanguage, GC Materials, Versation and CoolerEmail. Friess argues that the results of these and other Starve Up companies over the past decade prove that peer-to-peer mentoring works. “Seven of our original eight members kept going with the group,” says Friess. “Two have been acquired. All are profitable. Some are extremely profitable. And we’ve added 47 members total over the years; 40 of those 47 are still in business. Over two-thirds are profitable. We think that by the end of next year we’ll be close to 15% getting acquired and by the following year we’ll be at 20%.”

Friess also credits the Starve Ups’ model for his own successful exit. He estimates that more than 130 people made money when Wired.MD was acquired by Krames (a division of MediMedia) for $7.5 million in January 2008. “We sold the company for about two-and-a-half times the amount of money we had raised,” he says.

That payout has enabled Friess to move onto his next business, Journey Gym, a mobile gym for fitness-conscious travelers. Journey Gym is a member of Starve Ups along with Jive Software, Plas2fuel, Keen Footwear, Khanna’s MergerTech and other promising companies.

Friess is particularly jazzed about MergerTech’s membership in the group because of Khanna’s expertise in building up a company and cashing in ambitiously. “It’s all about the acquisition now,” says Friess. “With Nitin’s help, we want to get 25% of our member companies to acquisition if exit is the plan.”

If that plan comes to fruition, it could spawn a related fund that would be similar to the Portland Seed Fund, but open exclusively to Starve Ups companies. Friess says members have been planning to create a fund for years, to vote on investments and require that all companies that earn investments must join the group to make the most of the peer-to-peer mentoring. Member companies would pay back into the fund as they sell their companies, continuing the cycle.

Friess believes that such a fund would complement the city’s seed fund rather than compete with it.

“I don’t think there would be any competition between a Starve Ups fund and the fund Josh wants to start,” he says. “We need 20 more of them. The more funds we can start in Portland, the better. The more money we can bring into the state, the better. The more entrepreneurs we can spawn, the better.”

STORY BY BEN JACKLET


 

Comments   

 
Kent Lewis
0 #1 Build & KeepKent Lewis 2010-08-09 07:56:42
Excellent article, and kudos to the entrepreneurial team featured in this article. As a friend, vendor and partner of many of the entrepreneurs in this article, I can say the cause, and their achievements are legit. Looking forward to seeing more funding and entrepreneurial resources available in Portland in the near future.
Quote | Report to administrator
 

More Articles

Making faces

News
Thursday, February 20, 2014
02.20.14 Thumbnail ModelsBY VIVIAN MCINERNY | OB BLOGGER

As retailers consolidate and newspapers fold, the business of modeling shifts to ad agencies, apparel companies and new media.


Read more...

The 2014 List: The Top 33 Small Companies to Work, For in Oregon

March 2014
Thursday, February 27, 2014

100best14logoWebOur 100 Best Companies project turned 21 this year, so pop open the Champagne. Our latest survey gives us plenty to cheer.

 


Read more...

Tech makes the world go round

Contributed Blogs
Thursday, March 20, 2014
03.20.14 thumb internetBY JASON NORRIS | GUEST BLOGGER

I don’t think anyone can (or should) remember what it was like to get things done without the internet. This milestone in technology has certainly benefited brick-and-mortar companies and subsequently launched a new era of businesses.


Read more...

Buy the book

News
Tuesday, March 25, 2014
2 03.25.14 thumb bookshopBY VIVIAN MCINERNY | OB BLOGGER

Oregon is home not only to many fine writers but also several accomplished small publishers.


Read more...

100 Best Companies to Work for in Oregon [VIDEO]

News
Monday, March 03, 2014

Screen shot 2014-03-03 at 11.26.47 AM

Check out interviews with employees from some of the 100 Best Companies to Work For in Oregon winners and find out what makes their company a great place to work.


Read more...

From the Editor: The human factor

March 2014
Tuesday, February 25, 2014

In this issue, we celebrate our 21st annual 100 Best Companies to Work For in Oregon project.


Read more...

How to help your staff solve their own problems

Contributed Blogs
Friday, March 21, 2014
03.21.14 thumb coxcoffeeTOM COX | OB BLOGGER

During a recent talk to HR Directors, I asked if they saw leaders trying to solve every problem, instead of delegating to and empowering staff. Every head nodded. Every single one.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS