Logo: University of Southern California

Enterprising Engineers

The USC Viterbi Startup Garage, a business accelerator for engineering-led new student businesses, aims to create the next Facebook in Los Angeles
By: Marc Ballon
August 27, 2013 —

Budding entrepreneurs collaborate in the USC Viterbi Startup Garage

USC Viterbi School of Engineering alumnus Ali Khoshgozaran had an exciting idea for a startup. 

Why not create a location-specific app that provides information in real-time about interesting goings-on in a given neighborhood? Through the app, people could learn about local concerts and festivals, traffic jams, news, unfolding emergencies, flash sales at nearby hotels, restaurants and retailers and much more.

In early 2013, Khoshgozaran and two other engineers cofounded Tilofy (short for “Time” and “Location”) to bring their concept to market. Khoshgozaran, with a USC Viterbi Ph.D. and a pedigree that includes stints at Yahoo!, Microsoft Corp. and Samsung Electronics, quickly positioned the new business for success. Within a few weeks, he secured more than $200,000 in seed funding and an offer from a Silicon Valley incubator to move Tilofy up north, which Khoshgozaran said would “expose us to a strong network of Bay Area investors.”

As has happened all too often, it appeared the Southland would lose yet another promising engineering-led venture to the land of Apple Corp., Google Inc. and Facebook Inc.

Los Angeles has much going for it – a vibrant culture, great weather, Hollywood diversity, and world-class universities such as USC, UCLA and Caltech. But the City of Angels lags when it comes to nurturing high-tech startups.

Whereas Silicon Valley has nearly 160 venture capital firms with $5 billion to $10 billion in available capital, Los Angeles has less than 20 venture funds with only $500 million to $1 billion, according to PricewaterhouseCoopers. Silicon Valley also dwarfs Los Angeles when it comes to the number of high-tech incubators, business development consultants, angel investors, tech firms, entrepreneurs and engineering talent, the ingredients that make for a flourishing startup ecosystem.

Despite Silicon Valley’s allure, Khoshgozaran and his Tilofy cofounders decided to remain in Los Angeles. Why? The Viterbi Startup Garage, a new USC-created accelerator created specifically to keep companies like Tilofy in Southern California by providing them the support and resources they need to succeed.

The Startup Garage features a unique collaboration among USC, venture capital giant Kleiner Perkins Caufield and Byers, and United Talent Agency (UTA), a Hollywood talent firm that for several years has advised entrepreneurs on strategy, key partnerships, business development, and other growth oriented strategies.

“The Startup Garage allowed the Tilofy team to stay in ‘Silicon Beach,” Khoshgozaran said. “We believe USC’s partnership with Kleiner Perkins and UTA has fundamentally differentiated it from other startup accelerators.”

UTA's Brent Weinstein and USC Viterbi's Ashish Soni
The brainchild of Ashish Soni, executive director of Digital Innovation and founding director of Viterbi Student Innovation Institute (VSi2), the Startup Garage offers financial support, mentoring, and other strategic resources to a select group of USC student and alumni entrepreneurs over a 12-week period. Over 90 teams competed for 10 spots in the accelerator, which launched May 28. Each team, cofounded or led by a current USC Viterbi student or alumni, received $20,000 in exchange for 4 percent equity.

“The ultimate vision is to help create the biggest technology company in LA, which will create a ripple effect and build a thriving ecosystem of new investors, professional services and entrepreneurs,” Soni said. “We want to keep engineers and other talent that drive the economy here in Los Angeles.”

New firms create about 3 million jobs per year, according to the Ewing Marion Kauffman Foundation, an entrepreneurial advocacy group.

Given engineers’ integral role in today’s high-tech economy, it makes sense for USC Viterbi to nurture its students’ talents for the benefit of Southern California and beyond, USC Viterbi Dean Yannis Yortsos said.

“The world is being re-created and re-imagined like never before, with an astonishing speed, at an exponential pace, and in front of our very eyes thanks to engineering and technology,” he said.

The 10 Startup Garage teams reach several milestones during their time in the accelerator. At one month, they proved demand for their concept with market research data. At two months, teams will complete early iterations. After three months, the budding entrepreneurs will have finished software or hardware products that they could shop to prospective investors, including UTA and Kleiner Perkins.

“We are very keen on finding engineers that are working on grand challenges or solving difficult problems that look like they can be transformed into companies.” Kleiner Perkins General Partner Mike Abbott said.

Teams came into the accelerator at different stages of development. Some had paying customers and investors, while others had little more than a good idea. What they all share is a passion to create something innovative and an overall appreciation for the Startup Garage’s dark and Spartan space on the fifth floor of the Information Sciences Institute (ISI) building in the of Marina Del Rey.

Inside the facility, team members sat together in an open communal space with dim lighting and a billion-dollar view. The business builders typed away frantically on laptops, retired for impromptu meetings in adjacent meeting rooms and shared ideas and strategies with one another. They sat on no-frills red-and-yellow USC themed furniture. Over the three months, many spent the night at the Startup Garage, catching late-night shuteye in sleeping bags donated by VSI2 Board Members Jeff Stibel and Peter Delgrosso. 

“For me it’s perfect,” said Jonathan Sutherland, 23, cofounder of Everlab, the maker of the Koala mobile app that allows users to record and share an audio annotation to tell a photo's story. “All I need is a large table and room to think.”

The Startup Garage’s teams came to the accelerator with a cornucopia of interesting ideas.

Gregory Lou, 31, a USC Viterbi master’s alumnus and an Ironman triathlete, hopes to turn his passion into profits. He spent the summer working on Racevine, a website that aggregates and reviews endurance races from around the country.”

“I want to create the go-to source for racing as much for myself as for anybody,” Lou said with a laugh.

Christian Vanderwall and Awadi Rathugamage, both USC Viterbi students, have created Scholasphere, a common application for academic scholarships. The AIO Robotics team has worked on designing a 3-D copy machine. Moving Analytics made a phone-based app that measures daily movements and encourages healthy physical activities. MediaHound has overhauled its film and TV aggregating website to include other premium entertainment and better social discovery. Jiangyang Zhang, a 26-year-old USC Viterbi Ph.D., and his partner Jimmy Liu, a USC Marshall alumnus, have built out GymFlow, a mobile platform that leverages historical data and gym card swipes to predict current and future gym traffic.

That collection of talent made it easy for UTA to decide to participate, said Brent Weinstein, the talent agency’s head of digital media and himself a USC alumnus.

“When we considered doing a program like this, it was very appealing to work with a school that has such a strong pedigree and that puts out so many talented engineering graduates every year,” he said. “And the mission of building something to support those engineers and further grow the technology and startup scene is something we’re very excited about.”