Thousand Oaks Business Cluster Experiment Dies

THOUSAND OAKS — A two-year business experiment born of defense downsizing and environmentalism shut down Thursday, doomed by a lack of money and a failure to aggressively pursue fund-raising.

The demise of the Thousand Oaks Environmental Business Cluster (TOEBC) has local leaders pondering the future of such groups in Ventura County.

When it opened in May 1995, the innovative coalition became only the second group in the nation offering low-cost office space and equipment to start-up companies focusing on the environment.

Drawing on nearly $90,000 in corporate and city subsidies, the group seemed to embody many ideals voiced by government and business leaders in the 1990s: cost efficiency, public-private collaboration and entrepreneurial spirit.

Many of the business people who shared everything from modems to coffee makers at TOEBC’s Lombard Street headquarters say they could not have gotten off the ground without the coalition.

“It gave us the stature of a company right off the bat,” said Bob Nino of I.C.-Net Inc. After a 40-year career in the aerospace industry, Nino launched his computer checking firm, designed to reduce the use of paper in the payroll process. “It gave us that instant front, that looks like you’re in business.”

Now that TOEBC is closing, entrepreneurs like Nino are hustling for new offices. They also realize that a host of free services, such as instant Internet access, will now cost money.

“They gave us the ability to be larger than we are,” said Tom Nielsen, another former defense industry employee who used TOEBC as a launching pad. His five-employee fuel cell firm, Energy 2000, is headed for an office in Camarillo.

“Things will be much more difficult,” Nielsen added. “We’re going to have to move to a mom-and-pop mentality. We’ve had more of a corporate mentality.”

During its two-year stint in Thousand Oaks, TOEBC attracted about 15 companies with 40 employees. Although many of the companies were started by former defense workers seeking to break into the budding environmental technology industry, TOEBC attracted a wide variety of start-ups.

They included Green Suites International, which distributes products to hotels, and EcoLife Corp., which cultivates a fungus that helps plants grow. TOEBC turned away more than 50 firms attracted by cost savers such as cheap rent, which ranged from $200 to $700 a month.

Stephen A. Wright, a GTE projects manager who helped establish TOEBC and arranged for the telecommunications firm to donate vacant office space, called the coalition a success.

With only two paid employees to run it, TOEBC proved that business collaborations can operate on the cheap, Wright said. And the concept behind business incubators--that companies in the same industry, at the same headquarters, will share ideas and network--was borne out during frequent informal brainstorming sessions, he added.

“A lot of these people are bright, executive-type people who hit the ground running,” Wright said.

But TOEBC officials, who had initially lined up donations from big organizations such as Lucent Technologies and the James Irvine Foundation, acknowledged they had trouble attracting more sponsors. Many of the companies sponsored by TOEBC are still in the development phase, and it was hard to trumpet their success to potential donors before they had sold anything.

Yu-Yue Widrig, the cluster’s director, said of the original $90,000 in seed money, $50,000 went to consultants who drew up a business plan and led the initial fund-raising effort. Although TOEBC received another $30,000 from GTE and Lucent Technologies last year, Widrig said it wasn’t enough, and the fund-raising effort died when the consultants’ contracts ended.

TOEBC should have had a full-time fund-raiser who aggressively went after grants, Widrig said.

Instead, in addition to her other duties, Widrig found herself on the phone asking companies for more money. Most of the initial donors said they only intended to contribute once, and others said they were donating to other nonprofit groups.

“I was disappointed,” Widrig said. “The climate out there was difficult.”

County Supervisor Frank Schillo said local leaders have a lot to learn from TOEBC. The county recently finished a study on establishing a business incubator that could support young technology companies.

Schillo said officials should keep an eye on the firms now leaving TOEBC to see if they become profitable.

“If people don’t make it in two or three years, you have to make way for other businesses,” Schillo said.

Cindy Cooke, executive director of the World Affairs Council of Greater Ventura County, introduced foreign officials to business people at TOEBC. She said business incubators should not breed a reliance on donations.

“I’m not sure the role of government is to underwrite companies,” Cooke said. “Even foundations and grants, these days, are short-lived, and you can’t rely on that for very long.”

Cooke believes successful companies should turn over some of their profits to the support group.

Thousand Oaks Councilwoman Linda Parks suggests that TOEBC can be revived through the TeleCommunity Center at City Hall. Although businesses could not move in, entrepreneurs could use the center to meet with clients, she said.

“I think of [TOEBC] as a feather in our cap,” Parks said. “Home-grown businesses are excellent for a community.”

In the meantime, the TOEBC firms are preparing to face the business world on their own.

Nino, for instance, struck a deal with a Newbury Park firm that makes navigation devices. He will do some consulting work in exchange for office space.

Still, with his TOEBC colleagues packing up and ordering new business cards, Nino said he felt a sense of sadness.

“I think we had a kind of camaraderie here.”