First published in UT San Diego, August 14, 2012
By Barbara Bry and Neil Senturia
Timing plays a critical role in the ultimate success or failure of a new venture. In 1995, when we started our first software company to focus on high-speed Internet in public places, the convergence of the recent release of Windows, the Pentium chip and the growing popularity of email had lined up the stars in our favor. We were the beneficiaries of these events over which we had no control.
A few years before, while working at UC San Diego, I started an initiative called Cross Border Connect, whose goal was to link technology entrepreneurs in San Diego and Tijuana. After a few well-attended programs on both sides of the border, we disbanded the initiative because technology entrepreneurship seemed premature in Tijuana. We had a good idea, but it got no traction— at that time.
Today, Tijuana is a different story entirely, according to speakers at a recent San Diego Startup Circle event. It is home to a burgeoning innovation ecosystem. In May, Tijuana hosted its first Startup Weekend. The Tijuana Economic Development Corp. (EDC) plans to launch an organization similar to CONNECT in San Diego, and MIND Hub (an accelerator started in 2011) has successfully raised $500,000 for three of its companies.
“Tijuana has been known as a center for low-cost manufacturing for more than 50 years for electronics, medical devices and now aerospace,” said Flavio Olivieri, president, Tijuana EDC. Now the region’s focus is also on creating companies, because the new generation understands that it can’t rely on making money in the traditional areas of real estate and services, he said.
Other factors contributing to the surge in technology entrepreneurship include a change in government policies allowing innovation grants to be awarded to small businesses (and not just universities), a growing number of highly trained engineers who have gained extensive technical knowledge while working in Tijuana manufacturing operations, and the establishment of Endeavor Baja California, an organization focused on identifying and supporting high-impact entrepreneurs.
In 2003, Jorge Arroyo and his partner Angel Sanchez started Arkus, a software development company and one of the first technology firms based in Tijuana. Arroyo grew up in Tijuana, and in 1999 earned a degree in computer science from Cetys Universidad, where he met Sanchez. “We have bootstrapped from nothing to an 80-employee company,” said Arroyo.
Initially, the company focused on customers in Mexico, and the business grew slowly.
“The game changer for us was when the Mexican government started accelerators in different cities in the U.S. to allow Mexican companies to access the global marketplace,” said Arroyo who spent a year in Silicon Valley participating in the Techba program. There he learned how to attract U.S. companies as customers and how “ideas can become a company.” Now, U.S. clients account for more than two-thirds of the company’s revenues.
In Silicon Valley, Arroyo also saw the benefits of accelerators, and so in 2011, he cofounded MIND (Mexico Innovation and Development) Hub, which houses five technology startups. ArkusNexus has provided seed capital to three of the companies, which also received a $500,000 government grant that includes funding for research at nearby universities.
“Our goal is to put together an ecosystem of universities, entrepreneurs and investors who can create high value companies,” said Arroyo.
In 2010, in an effort to revitalize Tijuana and celebrate the innovation ecosystem, a group of business and civic leaders organized the first Encounter Tijuana Innovadora, which highlighted the region’s advances in education, science, culture, art and technology. More than 691,000 people attended the 15-day event.
This October, the second Innovadora will have three tracks — creativity, industrial and humanities — and will include the second Tijuana Startup Weekend that seeks to attract participants from both sides of the border. Speakers include Steve Wozniak, co-founder, Apple; Alejandro Ramirez, CEO, Cinepolis; and Blake Mycoskie, founder and chief shoe giver, TOMS.
Rule No. 213
Never, ever discount the power of time and timing.
Neil Senturia and Barbara Bry, serial entrepreneurs who invest in early-stage technology companies, take turns in writing this weekly column about entrepreneurship in San Diego. Please email ideas to Barbara at [email protected]