Local entrepreneurs fight it out, Survivor style
Eight contestants stood nervously at the front of the Sierra Nevada Brewing Co.'s Big Room stage. Behind them a tropical-beach scene was projected on a screen. They weren’t competing for a cash prize or dream vacation, however, but rather for a chance to fund and nurture their own entrepreneurial enterprises.
This was the semi-final round of “Venture Island,” a three-month business-plan competition, a la TV’s Survivor, in which people of all trades have battled to get their small businesses off the ground.
In between each round of presentations and questioning by a panel of judges, the contestants also received coaching and evaluation from respected North State businesspeople. Gradually, the original 17 competitors were narrowed down to eight.
One by one last Thursday night (June 5), the panel and audience, acting with equal authority, asked five contestants to leave the stage, until only three were left standing.
Steve Culton was shocked to find himself among them. He is not your average 30-something hotshot with a business degree and booming new start-up company. He’s a 56-year-old retired nurse and father of five from Paradise who turned an idea he got on the job into an invention.
During his 20 years as a nurse he noticed a huge and potentially fatal problem with oxygen tanks getting unplugged and going unnoticed. The tubes must be detachable to prevent strangulation if the tubing gets caught, but this can leave patients unable to breathe.
“I fought for one guy’s life for 51 minutes one night, and the whole time I was doing compressions, his oxygen was on the floor,” Culton said. “After we transferred him to the ICU, I thought, ‘Wouldn’t it be great if that thing had a whistle on it?’ “
And the “nurse alert connector” was born.
In 2004, Culton got a home equity line of credit to obtain the $37,000 needed to patent the idea and started Desert Air Industries.
However, to get his business fully operational, he will need $50,000 for production, packaging and product liability as well as licensing fees from the Food and Drug Administration, $98,366 altogether, provided no clinical trial is necessary.
“It’s a good thing, not a bad thing,” Culton says of the FDA’s requirements and fees. “But it’s really pricy.”
Although production of each new attachment mold is only 23 cents more than the mold costs now (77 cents), if 30 percent of hospitals bought it, the revenues produced could be as much as $16 million, he said.
When Culton saw an ad for “Venture Island,” he was interested in attending as an audience member in order to learn more about the process of finding venture capitalists.
Through a misunderstanding, he ended up on the phone with Jon Gregory, president and CEO of Golden Capital Network in Chico, a local venture-capital firm and a major sponsor of the competition.
“I told him about my product, and he said, ‘You’re on in four hours,’ “ Culton said.
Although new to the business world, Culton did surprisingly well in the first round, earning a standing ovation from the audience of local businesspeople and others. Unfortunately, his luck turned in the third round, when he pulled a prototype whistle from his briefcase that didn’t make a sound.
“I grabbed the wrong whistle, and it was very embarrassing,” Culton said. “I think I finished dead last in that round.”
Besides gaining skill in public speaking, the contestants also received counseling and coaching from business and marketing experts.
“In a large sense, I think the mentoring has been the real reward of this endeavor,” Culton said.
“Venture Island” also has allowed Culton to network with many investors interested in his product.
“The inside lid of my briefcase is covered in business cards that look better than my Christmas tree,” he said, adding that he is going to wait until the final round on June 26 to start making phone calls.
The other finalists Culton will battle include Robert Strazzarino, representing his software company College Scheduler LLC—a program to help college students register for classes—and Crystal Martin, representing the California Academy of Nurses.
The emcee of each installment of “Venture Island"—or, as he’s called, “the big kahuna"—is Roger Akers, one of the managing partners of Akers Capital LLC, a venture capital firm specializing in emerging technologies based in Fair Oaks. He is enthusiastic about the program’s success so far.
“I thought it went very well; we created some excitement, entertained the audience to some degree, and provided some real insight into how entrepreneurs must adapt to different situations,” he said.
Akers says the objective is to educate people on the logistics of starting up a business. “The goal is to help people expand their entrepreneurial skills and develop an economic engine in a fun and interesting way,” he said.
Culton’s rollercoaster ride has been interesting for Akers to watch. Even if Culton doesn’t win first prize, Desert Air Industries will surely benefit, he said. “[Culton] can get some exposure that will help him find people to work with in the future to drive his business venture.”
The amount of the grand prize is still in the works, said Gregory, but they are hoping to total at least $50,000. The winnings will be split 70 percent, 20 percent and 10 percent for the first-, second- and third-place winners, respectively. The final round of the competition will take place June 26.