#StartupsEverywhere Profile: Scott Fox, CEO, OC Startup Council
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Growing the Orange County Startup Ecosystem
Orange County, California has more to offer to young professionals than Disneyland and surfing. We spoke with Scott Fox, CEO of the OC Startup Council, about how he is working to support early stage startups in Orange County by connecting them with resources through this organization.
Can you tell us about the OC Startup Council and the work you do?
The OC Startup Council is an organization that I started last winter. We are focused on connecting Orange County technology startups with resources from around OC and beyond.
I saw a hole in our local tech community that needed to be filled. Orange County is fragmented because there is no downtown like other cities. So we have a lot of great startup resources that are also very fragmented, meaning that people can’t find them. As a serial entrepreneur myself, I am self-trained to find business problems and solve them. The problem here was that entrepreneurs, especially new ones, were having a hard time finding resources that they should have been able to find to help build their companies. Essentially, the Startup Council is a website and a membership group working to collect all of these local resources in one place. We have a directory, a jobs board, and an events calendar, and a blog that collects all of those resources together.
When I started doing MasterMinds workshops for startup founders in 2017, I tried to help all different kinds of entrepreneurs, like I do in my 3 books about startups. Over time, though, I learned that the interest from sponsors is much greater in technology or life sciences startups that have scalable growth potential. Many of the sponsors are law firms, banks, and accountants who are much more interested in tech growth companies as future clients than they are in restaurants, hair salons, or t-shirt companies. My background is in software, mostly e-commerce and online marketplaces anyway, so I tilted the focus towards software, and it has served us well in gaining support and selling out every event we hold.
Can you expand a little further on your background and what sparked this project?
Having gone to Stanford in the ‘90s, we all got sucked into the Internet for obvious reasons. After moving to LA from the Bay Area, I naturally started entertainment related dot-coms, like streaming or ecommerce in music and television, where the Internet was overlapping with the content industry. I did that for fifteen years, and also I started writing books on entrepreneurship to help introduce startup thinking to a wider, more diverse audience than we usually see in Silicon Valley. I’ve written 3 best-sellers that are now available in many languages around the world. About 10 years ago, I left my last corporate job after helping start LiveNation.com. Now, I spend most of my time as a community organizer trying to help other startups get off the ground and as an angel investor via Tech Coast Angels and the Startup Council Syndicate (on Angel List). As with my books, my community organizing and investment activities are all aimed at helping a broader set of people participate in the digital revolution.
What are some of the main recurring roadblocks you see or have faced yourself?
The number one problem here is unequal information distribution. A lot of people like to do their own thing and they do a great job, but they’re not great at marketing. That is true in businesses and nonprofits everywhere. I think people really under-communicate, especially when they don’t adequately use social media or their email lists. Many are non-profits, of course, so they are so busy scrambling to stay alive financially that they don’t do a great job of spreading the word about their services or clearly articulating the support they can offer to early stage company founders and teams.
Another roadblock is that, since it’s hard to make money helping early stage startups, not many people focus on the earliest stages of company formation and support those types of founders. There are a lot more resources for companies who are already up and running than there are for really early stage companies who struggle to turn a profit or pay legal fees. So I and the OCSC try to help the really early stage founders with their idea formation, product development, and investor presentations. My philosophy is that we need a lot more companies to be trying in order to find a few winners. If you just sit around waiting for those Series A and later stage type people to emerge, you narrow your pool even further. There are a lot of brand new entrepreneurs out there who deserve a chance and can offer tremendous opportunities to investors if they have the right mentoring.
What are some ways you see policy interacting with startups?
On the positive side, I’ve been excited about the Jobs Act and the loosening of investment regulations for people to invest in early stage startups. We have more people able to support startup innovation through platforms like Angel List and crowdfunding, too. Making it easier for friends and family to support startup founders is important.
On the negative side, everyone has complaints about the cost of healthcare and housing. Similarly, if immigration issues were adjusted to allow for those who are trying to add value to our country to do so more easily, that would be great. We have also had discussions about how the government might be able to use tax policy, credits, or incentives to help startups retrain and up-skill the workforce.
How was Congressional Startup Day, and what is your relationship like with Rep. Katie Porter?
I met one of her field reps at a Greater Irvine Chamber of Commerce meeting and they contacted me to follow up. I was happy to host the first Congressional Startup Day in Orange County as a nonpartisan event. I know some of our attendees do not agree with the Congresswoman politically, but I made the point that regardless of that, we need the dialogue.
We covered as much as we could in the meeting with her and I think it was a valuable step toward building a dialogue and an awareness that startup CEOs can have input on policy and legislation. Highlights were discussions around topics like opportunity zones and the high cost of living, which is especially pertinent to our area. Antitrust was also on everyone’s mind, and startups tend to be scared of that. As an entrepreneur, it’s hard to be a small business owner at the potential mercy of regulatory change.
Since then her office has been in touch a few times. Most recently they asked if we want to get involved in the Congressional App Challenge, which I plan to look into.
What is your relationship like with the startups in your membership?
It’s great. Everyone in the community increasingly recognizes how valuable it is to have a centralized information source that has no agenda beyond helping local startups succeed.
We’ve got probably 200 early stage software and hardware startups in our directory now. It’s kind of hard to tell what fraction of all Orange County Startups that is, but I’d say we have a pretty good representation. The longer the website is up, the more the network grows.
Most of them just sign up to for the website and mailing list, and that’s all we ever hear from them unless they start coming to events. That’s ok because that creates great value right there by increasing communication and exposure for their otherwise unknown websites. This helps potential investors, service providers, partners, and clients to find them more easily. That exposure, as well as the newsletter, has been very successful. Last winter, we had maybe two posts a week, and now we are up to 10-15 articles per week across two newsletters. These articles cover things like events, job postings, deal announcements, and newly available resources. That growth proves my original thesis that there is actually a lot of startup activity in our community that was under-reported.
What has your experience shown you about the trends of the health of the startup ecosystem?
Overall, I see positive trends in the health of the ecosystem. I think it’s a false premise to compare starting businesses today to some arbitrary period in the past. Entrepreneurs go when they’re ready. But I think things are getting better in the sense that startup costs are down, entrepreneurship is more accepted and appreciated, and more people are becoming aware of investing in startups, too.
I think the negative trends are things like the high cost of healthcare, housing, and regulatory uncertainty. These things make it hard both for people to leave their jobs and also to invest. The stock market has been down this quarter, which makes investors more hesitant to write a check to startups. Hopefully, that’s something cyclical that will come back.
Do you have any other unique perspectives on the startup ecosystem?
I’m spending a lot of time trying to build this ecosystem in Orange County, but I know there are a lot of other growing ecosystems that need guidance. I was back in Detroit last month for the Detroit Homecoming conference. They try to bring people who grew up there back to revitalize the city, which is something I see happening in a lot of places.
I think all of our startup ecosystems need to identify and support entrepreneurial leaders who are in a position to lead. Unfortunately a critical requirement also seems to be that they are so passionate about it that they will do it without necessarily making any money. Most ecosystem folks (meaning service providers) want to sit back until companies are big enough to pay their bills, but if we don’t spend more time investing at the earliest stages, then those companies don’t appear. You need leaders who care so much they do it naturally, and I think the best ones are entrepreneurs themselves.
Also, I think more towns need Seed Funds or syndicates that really do invest in the earliest stage ventures, rather than relying on angel groups or VCs who only look for companies that already have $10,000 to $20,000 a month of recurring revenue. We need to get people to believe they can leave their jobs and feel confident that they will be able to build something exciting. I’d like to see more communities and local companies provide matching funds or something similar that can help spur innovative, thoughtful company formation at the early stages. In fact, I’m starting the Startup Council Syndicate to do just that.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email edward@engine.is.
