SLO’s new network: Young entrepreneurs group together

Pacific Coast Business Times
By Elizabeth Werhane
Staff Writer
Feb. 20, 2004

They’re in their early 20s to mid-30s. They can handle the high cost of living in San Luis Obispo. They aren’t trust-fund babies. If you ask them who they work for, they all have the same answer—“me.”

In a tough economy and a city not known for generating high-paying jobs, 10 small-business owners are redefining the San Luis Obispo business community through an informal network that meets regularly. They started businesses not to get rich, but to stay in the Central Coast city of 44,000.

San Luis Obispo is the eighth-largest city in the Tri-Counties and home of California Polytechnic State University. But housing prices are soaring in the college town and there are few large employers around.

To purchase a median-priced home of roughly $400,000 takes $80,000 per year in income, said Bill Watkins of the University of California, Santa Barbara Economic Forecast Project.

And that kind of income is not easy to come by. “If you’re going to work for someone else on the Central Coast, the money isn’t so great,” said Heather Fenton of the San Luis Obispo Chamber of Commerce.

Yet half of the group’s members are homeowners. They’re customers of banks, law firms and accounting firms, and some are expanding their companies beyond the city limits.

Erik Wolting, 31-year-old owner of All Seasons, a gardening and landscaping service, said most Cal Poly students leave the area after graduation. He said it’s not because they want to, but because they can’t afford to stay.

After growing up in cities all over the world, he put down roots in San Luis Obispo. He began working for a landscaping company that he later purchased. His business had approximately $1 million in revenue in 2003.

Tina Porter, 29-year-old chief operating officer of SLO County Passport, started the discount membership card business to be able to live in her hometown. “It’s really the only way of staying,” she said.

For 23-year-old Aaron Steed and 21-year-old Evan Steed, the brothers behind Meathead Movers, the choice to start a business was simple. “We needed to figure out a way to make money because our parents didn’t give us any,” Aaron Steed said.

Wolting said he sees a gap—an absence of people in their 20s and 30s. “Where’d everybody go?” he said. “They went to L.A. or they went to San Francisco.”

The unofficial entrepreneurs group is proof that not quite everyone left. They found each other at community networking events where they were drawn to each other’s youth and energy. Rich Ferguson, a 33-year-old magician, said many people seem to attend Chamber of Commerce mixers because it’s part of their routine, but the younger members actively network and make contacts to help their businesses grow.

James Whitaker, 24-year-old co-founder and owner of Left Coast Enterprises, thinks youth is an advantage in a startup. He said established business owners with families and house payments may hesitate to take risks. “We all have very little to lose,” he said. “If everything were to go to hell, we’re still 27, 28, 33—still very young.”

Whitaker and his 25-year-old brother, David, founded Left Coast T-Shirt Co., a local custom screen printing and embroidery shop, and QuikCondoms.com, an online discount retailer that ships condoms worldwide.

The group of young entrepreneurs is focused heavily on marketing—and collective muscle. They learn who made what deals with whom and use that as leverage in negotiations. But they also are focused on customer service. “Word-of-mouth travels faster than any type of advertising here,” said Tamara Cohen, owner of Mad Hatter Catering.

They also work together regarding decisions about hiring, documentation, products, uniforms, logo designs and, of course, networking.

“We have our meetings, we have dinner, a couple of glasses of wine, and we help each other out,” Whitaker said. “All businesses have problems and all businesses have some of the same problems.”

The entrepreneurs are more than just tadpoles in the San Luis Obispo pond. Their companies are developed and growing. Some have opened new offices, acquired competing or complementary companies, or used the profit from one company to start another. For instance, in just two years, SLO County Passport increased production of its discount book from 60,000 copies to 137,000 copies.

They also have learned the lesson of giving back. In response to the Southern California wildfires last fall, four of the businesses partnered to deliver more than 100,000 pounds of donated goods to the fire victims, and they raised more than $5,750 for the American Red Cross in a three-week period.

Different companies host local wrestling tournaments, volunteer at the San Luis Obispo Botanical Garden, provide computers to elementary school children through Computers 4 Kids, donate to DREAM for Kids, and provide their services—including magic and catering—to charitable events.

Some of the group’s members have sacrificed big bucks to fly solo in SLO. “I gave up a six-figure position in the Bay Area working for a leading biotechnology company,” said Damien Porter, the 29-year-old chief executive officer of SLO County Passport. He said he worked the full-time job while starting the company, which translated into 18 months of 90-hour weeks. The longest vacation he took was five days for his honeymoon with his wife and business partner, Tina.