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Planting the Seed: From Startups to Public Companies, Businesses Along 78 Corridor Flourish

By Andrea Siedsma

 

 

In 2016, two entrepreneurs in the Netherlands - Maurits van de Ven and Tony Martens - came up with a solution to help address the world’s hunger problems via the production of the aquatic plant Lemna and formed an AgTech company called Plantible Foods.

 

In order to continue their R&D activities for this protein-rich plant, relocation to the United States was a logical choice due to friendly regulations around new food ingredients, availability of capital, and better weather conditions for year-round cultivation, van de Ven said. While searching for potential locations, the founders increasingly focused on Southern California and stumbled on a potential site in San Marcos, which, they discovered, has the perfect climate to further test the potential for Lemna during year-round cultivation trials.

 

“Many sunny days and a relatively mild climate are very favorable conditions for reliable cultivation R&D results,” van de Ven explained.  

 

From L to R: Maurits van de Ven and Tony Martens of Plantible Foods

 

And so, the entrepreneurs packed up and moved to San Marcos in the fall of 2017. The pair is currently building a vertically integrated agricultural system that will allow them to create the “best and most sustainable plant-based protein in the world.”

 

Lemna is a very fast growing green leaf that is packed with protein and doubles in biomass in just over 48 hours, van de Ven said.  Plantible Foods has developed technologies to sustainably grow Lemna on non-arable land and to process the plant into a valuable food ingredient that behaves similar to egg white.

 

The reason behind the company’s existence: Global population growth and increasing natural resource scarcity will result in a worldwide shortage of protein, according to van de Ven.  

 

“Traditional agriculture requires arable land and lot of fresh water to produce enough protein to meet future demand, he said. “Therefore, innovative solutions are necessary to produce high quality proteins more sustainably. Our mission is to produce the best plant-based protein in the world, that can be used in many different consumer categories. In order to achieve that, we tried to find a protein that tastes great and affordable.”

 

Plantible Foods is currently preparing for ingredient testing with CPG manufacturers. After successfully proving its proprietary extraction technology at lab scale, the company is now preparing for an important phase of small scale ingredient testing and validation by third parties. This phase is part of the product development roadmap towards larger-scale pilot production of its plant-based protein ingredient. In parallel, Plantible continues to strengthen its IP portfolio through patent applications in various fields.

 

 

For van de Ven, location is everything for his startup to grow. San Marcos, he said, is well connected to the I-15 and I-5, with both domestic and international airports nearby, and is relatively close to large cities such as San Diego and Los Angeles, which, he said, make it accessible for potential investors and partners to visit San Marcos as well as a comfortable commute for current and future employees.

 

“In addition, the existing biotech industry in San Diego has established a robust ecosystem of many different suppliers and service companies that can also cater to the growing food and beverage industry, including producers of specialty foods and craft breweries,” he said.  “The 78 Corridor’s natural attractiveness, combined with a growing number of startups in innovative technologies, retains local talent and attracts talent from other areas. This is a great opportunity for startups because being located here adds all these benefits for employees, which supports the ability to build powerful teams. Eventually, it is the people that make startups successful.”

 

Plantible Foods is one of a plethora of unique companies along the 78 Corridor - which includes Escondido, San Marcos, Vista, Carlsbad, and Oceanside.  And, that’s no surprise considering the ample amount of resources available to help fuel and sustain startups.

 

“The cities along the 78 Corridor have been working hard to build a solid startup ecosystem that supports companies from various industries and sizes,” said Kevin Ham, Economic Development Director for the City of Vista. “These companies and their innovation play a significant role in economic growth, job creation, and quality of life in the region. Through invention, entrepreneurship, science, and technology, these startups have the capability to not only enhance our daily lives but to even solve some of the world’s most pressing challenges. We are proud to have these startups call the North County region their home.”

 

Below is a sampling of other thriving small and mid-sized companies that have grown along the 78 corridor.

 

Bitmo (Carlsbad): Fintech startup that plans to disrupt the $160 billion gift card industry.

 

Year Launched: 2017

 

Digital Deets: Often described as the 'Venmo for gift cards,' Bitmo is a mobile platform that allows consumers to gift easily and securely right from their mobile wallet. Unlike plastic gift cards, Bitmo is highly flexible and allows users the ability to exchange gift cards from one brand to another and even split the value between multiple brands for free"

 

Background: The initial concept for Bitmo was born out of entrepreneur Michael Smallwood’s frustration with all the plastic cards in his physical wallet. “Cards get lost, they’re hard to manage, or you’re stuck with a card you don’t want. Plus who wants another piece of plastic to carry around?,” he thought.

 

Having built successful businesses in the mobile software space, Smallwood recognized there was a clear disconnect between all the other financial services companies - like Acorns for saving, Robinhood for share trading, and even Venmo for money transfers - and that of a $160 billion gift card industry that is still mostly based on physical plastic.

 

“With the growth of mobile payment systems like Apple Pay and Google Pay in the US, as well as market research that shows as many as 78% of millennials want an entirely mobile experience, we knew there was a clear opportunity for Bitmo to replace the old plastic gift card,” Smallwood said.

 

 

One-of-a-Kind: Smallwood said Bitmo is unique in several ways. “First, of course, we’re entirely mobile – meaning you can conveniently send a gift of value to anyone as easily as a text message, while your recipient can manage and spend it right from their phone at over 130 Nationwide retailers. Because it’s so convenient, we believe Bitmo opens new opportunities to gift friends, family, and even colleagues and service providers when the old plastic card would be too much effort or just, frankly, too tacky.”

 

Success:  So far, Bitmo has had more than 100,000 gifts sent through its platform and the app is on track to surpass 1 million users by the end of 2019, growing 28 percent month over month.  

 

“The key to our success has been an incredible team building and marketing a product that is really resonating with our consumers,” Smallwood said. “Bitmo is constantly expanding its gift catalog to include more retailers - many of which currently love our ability to help drive customers into their stores.  Because of their strong support, we’ve been able to incentivize our most active Bitmo users to do what they already love – sending everyday gifts to friends and family. We even give users the ability to send their first gift to a friend without needing to add a payment method."

 

Funding: Bitmo recently raised $3 million from investors. The startup plans to use the money to build its marketing, sales, product, finance, and engineering departments, Smallwood said.

 

Kudos: Bitmo was recently honored as a “Cool Company” in 2019 by the San Diego Venture Group.  

 

Location Feels: Smallwood chose Carlsbad for Bitmo’s headquarters due to the coastal city’s location right off I-5 as well as proximity to the beach and an available talent pool.

 

“We are also just down the street from GoPro, Walmart Labs, Verve, and numerous other high tech companies,” Smallwood said. “And being just 25 minutes to San Diego and 50 minutes to Orange County, we’re able to pull from an enormous talent pool while still maintaining an incredible quality of life. Many of our employees live in Carlsbad and neighboring communities, including myself."

 

The 78 Corridor Attraction:  Smallwood said he has seen strong growth and a commitment to startups along the 78 Corridor over the last couple of years, which makes the region even more attractive to companies like his.

“North County continues to expand its talent pool and tap into resources previously commuting away from the area.  "This centrally-located area with improved transportation options lets us draw upon an even larger talent pool within commuting distance of our office."

 

Flux Power (Vista): Advanced energy storage systems manufacturer.

 

Year Founded: 2012

 

Technology: Flux Power develops advanced lithium batteries for industrial applications such as electric forklifts and airport ground support equipment.

Included in Flux Power’s systems are electronic control units built in sheet metal enclosures.

 

Acceleration: Flux Power is one of many startups that uses Vista-based Open Source Maker Labs (OSML) to build products and prototypes.

 

Paulus Geantil, Flux Power’s CTO, said the traditional process of product design can be very lengthy - for a startup, this can make things either very expensive or just take too long. Most startups, he said, can’t afford an entire CNC machine shop, fabrication tools, and personnel necessary to create viable and testable prototypes. The tools available at OSML, he said, can really give a startup company a head start and a fair chance of delivering the innovations necessary for modern products.was impressed by the idea of having high tech tools available without the large upfront cost of having to buy the equipment.

 

 

“I had been personally responsible for the rapid prototyping of many of our concepts as I own several robotic machines myself, both purchased and self-built. But a place like OSML would allow these capabilities to be shared amongst my entire team and not have the entire burden on me,” he said.  “OSML helps us across the board in our ability to imagine and then realize designs quickly. OSML has sophisticated tools (software and robotic and hand tools) that allow a person to walk in, conceive, design, fabricate, and quickly iterate an idea to a working prototype quickly. We can do things in hours and days instead of weeks and months.”

 

Innovation Station: Geantil said the growing amount of resources along the 78 Corridor have the potential to foster innovation that he only dreamed of as a kid.

“There are so many amazing ideas that can now be easily and inexpensively developed by those who conceive them,”  he said. “This allows an exponential increase in the overall innovation of society as a whole. When I was a child, I thought up a way to help my parents with their business by making a program to automate some of their busy work. The tools and training were simply terrible at the time, but I was able to help them. A year later a company built similar tools, selling for $30,000. Had I had a resource like OSML back then, just imagine.”

 

Growth Spurt: Flux Power is currently expanding from a 30,000 square-foot facility to a 100,0000 square-foot building in Vista.  

 

“Vista has grown from a farm and flower community to something of a minor Silicon Valley type community,” Geantil said. “The people here are well educated, ambitious, and driven for a change for the good. Vista had no idea what it would become. But now the city finds itself as a place where businesses can really flourish.”

 

Flux Power certainly fits into that growth realm. The company - which was spun out of Epic and founded by Chris Anthony and Michael Johnson - was first launched in 2009 to build energy storage systems for Epic. Then in 2012, Flux moved more toward grid energy storage solutions.

 

“The addition of artificial intelligence into our systems allows an unprecedented capability of system optimization and longevity, perfectly suited to their environments,” Geantil said. “Essentially, we have given our systems human-like ‘feelings’ that allow them to train and perform for particular applications. Just like people, any electrochemical energy storage system needs the right environment to reach its full potential.”

 

 

Flux Power, which has grown its workforce from about 30 people to 75,

launched a full product lineup last year for material handling. “Our orders have gone from two-to-five units per order to 40-to-80 per order, so you can imagine this is a very exciting time,” Geantil said.

 

Resources along the 78: Geantil said Flux Power’s growth and success were made easier with the support of valuable resources along the 78 corridor such as OSML.

 

“OSML’s value is immeasurable,” he said. “Imagine the next big idea comes from a 13-year-old girl who has this idea to better something, and it turns out to be so much better than Facebook. And all these people join up to the idea and all of a sudden you have a thing that can employ 100 or 1,000 or more people.  How can one measure that potential? OSML can facilitate such a thing. As an inventor, I often listen to the ideas people have. So many people have at least one idea that can make a better world or an easier world. But there is this barrier to realizing one’s idea. OSML lowers that barrier. OSML truly makes dreams happen, at least for inventors.”

 

HireAHelper (Oceanside): Leading online marketplace for hiring hourly mover labor anywhere in the United States.

 

Year Founded: 2007

 

The Deal: HireAHelper allows consumers to compare local movers in order to get the best deal - all online.  It's simple to use and lists which equipment is included in the moving fee (like furniture pads, dollies, and plastic wrap), as well as extra costs.

 

Background: During his senior year of college, San Diego native Mike Glanz had two jobs. On the weekends, he loaded and unloaded moving trucks with his college roommate Pete Johnson. During the week, he studied information systems management and worked part-time as a software developer. After Glanz and Johnson both graduated, they paired their moving experience and Glanz’s software skills together and decided to create HireAHelper.

 

The entreprenuers felt they could build a marketplace for “Hybrid™ moving,” which combines the cost savings of the do-it-yourself moving approach with the convenience of hiring loading and unloading help from professional movers.

 

“So, we built a prototype of the application and raised a little bit of seed money from family, quit our jobs, prayed, crossed our fingers and launched in 2007,” said Glanz, also HireAHelper’s CEO.

 

Niche Market: According to Glanz, 10.1 percent of Americans (32.4 million people) moved in 2018.  While a small segment of people employ a full-service moving company, the vast majority of them chose to move themselves, he said.   “We serve these do-it-yourself movers by providing an affordable place to hire local movers to do all the heavy lifting. This hybrid approach is much more affordable than hiring a full-service moving company, and a far more appreciated solution than begging friends and family for couch-lifting help.”

 

Growth: Since HireAHelper was launched in 2007, more than 100,000 customers have booked moving labor through the site with most of the growth coming from customers' word-of-mouth and repeat orders, Glanz said.

 

HireAHelper initially launched as a horizontal marketplace, offering day labor, cleaning, yard work, and help moving. The company has since pivoted to become a vertical marketplace with a mission to operate the best moving labor quoting and booking tool on the web. HireAHelper has over 1,000 moving service providers across the United States and conducts more than 65,000 moving jobs each year.

 

“We’re looking to continue to expand our services – connecting people with every type of moving service, not just hybrid moving,” Glanz said. “Instead of only offering one moving service, labor, HireAHelper will soon connect people with rental trucks, boxes, or even full service movers with a truck.”

 

“The 12 years we’ve been in business, there were only 4 months that we didn’t have year-over-year growth,” he added. “There’s just so much opportunity in the moving space. We’ve worked hard to build out our network of quality movers in the major markets around the country and generate some awareness around the Hybrid moving approach. Last year we reached $20 million in sales, so it’s a moving model that continues to gain adoption.”

 

 

Cash Flow: When the company first launched, HireAHelper raised about  $350,000 from friends and family. HireAHelper was recently acquired by a well-funded strategic partner.  “Right now, we’re focused squarely on driving growth instead of raising more cash,” Glanz said.

 

Local Roots: Glanz, who was born and raised in Mission Beach, attended college in Riverside and wanted to stay in Southern California for his career. That’s when he started looking along the 78 Corridor.

 

“Oceanside, and North County San Diego in general, are simply more affordable places to operate than in the higher-rent downtown San Diego district,” he said. “Oceanside has also really grown up in recent years. About 10 years ago, there weren’t a whole lot of options in terms of restaurants or other services - but now it’s a growing scene with new companies, craft breweries, and restaurants opening all the time. We’re very happy in Oceanside.”

 

Startup Scene: Glanz believes the region’s startup scene is no doubt burgeoning and gaining momentum as a hub. “And I think there are far more resources today than there were 10 years ago along the 78 corridor,” he said. “It’s cool to see how the ecosystem has really grown in North County San Diego. It’s a blend of talented people from South Orange County and San Diego that are shaping a unique tech scene.”

 

“A startup-friendly culture is emerging here in North County as it seems entrepreneurs are coming out of the woodwork, and it’s nice to be a part of that,” he added. “I love being an entrepreneur. It’s what I’ve always wanted to do. But being part of this North County tech community makes it a special experience. I can’t imagine being anywhere else.”

 

Networking: One way Glanz engages with his fellow entrepreneurs is via region-wide events like San Diego Startup Week. The week-long event, slated for May 28 - June 3 this year, is the “best networking event of the year in our area,” he said.  “There’s so much to learn and so many smart people to meet. I think it can add a lot of value for small businesses in terms of getting them on the local radar. This event, as well as a North County Day, really entrenches you in the community – and it shows others that you’re willing to participate. I think that by showing the door is always open, more opportunity will eventually present itself.”

 

 

One Stop Systems (Escondido): Manufacturer of specialized high-performance computers.

 

Year Founded: One Stop Systems (OSS) was founded in 1998 by seasoned tech executives Steve Cooper and Mark Gunn with the mission of developing and selling specialized Industrial PC components and systems.   

 

Market Focus: Today, OSS provides high-end specialized and scalable computer systems used by engineers, scientists, creators and other professionals who are pushing the boundaries of their industries.

 

Through its “AI on the Fly” initiatives, OSS is also leading the trend of moving artificial intelligence (AI) computing out of data centers to the field close to where data is sourced.  

 

Cool Customers: OSS services hundreds of customers a year across a wide range of industries. Two of the company’s top customers include Disguise, a leader in media servers for video productions of large scale events such as the Super Bowl; and U.S defense giant Raytheon, a major U.S. defense contractor and industrial corporation with core manufacturing concentrations in weapons and military and commercial electronics.

 

OSS also supplies major customers with AI systems in autonomous driving and homeland security applications. “The common aspect of all of these solutions is uncompromised performance to address complex problems that are not solvable using standard off-the-shelf mainstream computers,” said Cooper, the company’s President and CEO.

 

Growth: Since 2016, OSS has enjoyed dramatic growth both through expansion of its core business as well as through several strategic acquisitions, Cooper said.  OSS acquired San Diego-based Magma in 2016, and then in 2018 acquired CDI in Irvine and Bressner in Munich, Germany.

 

The company’s annual revenue grew from $18.9 million in 2016 to over $37 million in 2018, while its employee count has more than doubled to more than 125. Cooper said OSS anticipates revenues to be between $54 million and $58 million in 2019. OSS became the first Escondido-based public company when it listed on the NASDAQ Capital Market exchange in February 2018.

 

 

Homebase: Cooper said he and his co-founder chose Escondido as OSS’s homebase because the city “provides cost effective, light industrial office space in an ideal location.  The proximity to great sources of technical talent from the local universities as well as other high technology companies is important.”

 

“Escondido is family-friendly and a short commute from a wide range of residential communities, and nearby San Diego is a location for technology companies, all together providing the advantages of Silicon Valley without the costs and congestion,” he added.

 

Regional Hub: Cooper said the 78 Corridor overall is an attractive location for businesses, especially high-tech industries.  “OSS established it headquarters in North County because of the region’s numerous advantages, including ample source of talented employees, a great family-friendly living environment, and low cost of living versus other West Coast technology centers,” he said.  “There is also an active angel investor community and many small company advisory services. OSS even received initial capital investments from local angel investors.”

 

Editor’s Note: For more information on startups along the 78 Corridor or the various resources available, please contact Kierstin Rielly at kr@sandiegobusiness.org. Also, check out Innovate78’s guide to startup resources here.

 

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