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Interview Published April 13, 2000

Jake Winebaum, eCompanies

Jake Winebaum, along with Sky Dayton, has been getting lots of attention lately with eCompanies (, their dot-com incubator. I asked Jake a few questions about why he thinks eCompanies is different, what he sees as Southern California's strengths and weaknesses.

BK: Southern California's been a hotbed for new Internet incubators, with eCompanies at the center of the movement. What makes eCompanies different than the rest, and what's your model for business?

JW: Becoming an incubator seems to have become pretty fashionable in the nine months since we launched. And it seems that there are almost as many definitions of what an incubator is as there are incubators. We think our model is part of what sets the standard for incubation today and differentiates us from the rest. We've set up an economy of execution that allows our incubations to get to market in about half the time it would traditionally take to bring the same product or service to market. We've set up an assembly line of sorts -- a Henry Ford approach to building Internet companies in 90 to 180 days -- where each incubation follows a 7-step process while the CEOs focus on what's different and unique and compelling about the company's product or service. During the entire process, our senior executives are accessible to the CEO to flesh out financial models, or strategic product plans, or to guide key business development deals.

BK: What kind of companies is eCompanies looking for, and what is your profile of the ideal portfolio company?

JW: We look for a number of things in our portfolio companies. Is the category at least $5 billion? Are they capable of being number one in that category in five years? Are they fundamentally changing an industry or an experience that is today broken or seriously flawed? If commerce is part of the business model, are they focused on demand creation or demand fulfillment, and are they in a space that has defendable margins? Whether you look at New Economy companies or Old Economy companies, earnings are always rewarded in the public sector. Identifying lines of business that aren't commodified and have strong margins can mean the difference between making a profit and eternally burning through cash.

BK: What strengths and weaknesses do you see in Southern California's growing technology base, and what do you think is important for companies here to succeed?

JW: The funny thing is that the new Internet Industrial Complex is increasingly less about technology, and more about changing and improving traditional ways of doing business. It's about seeing the future and integrating the Internet into every facet of your business. The Internet shouldn't be an initiative in your organization, it should be a guiding principle. In that vein, Southern California has the kind of creative business minds that can wrap their heads around the changes that need to happen from top to bottom in an organization. Southern California has a broader and more diverse talent pool to pull from -- defense, aerospace, entertainment, services -- which is a recruiting advantage. And quality of life near the beach is awesome. The biggest weakness might be the overall shortage of experienced technologists, but since places with more tech talent per capita (like Silicon Valley) have become so highly competitive, it's almost a wash.

BK: I notice eCompanies has invested now in companies all over the country. What's your strategy in terms of investing outside of Southern California?

JW: The principal geographic focus of the incubator is Southern California. We also think there are a lot of great ideas and talent pools in secondary markets outside of Southern California, and we invest in those companies through eCompanies Venture Group.

BK: Finally, as a successful entrepreneur and someone who's trying to make lots of companies here succeed, what do you think is the most important thing you've learned over the years that helps make the difference between a success and a failure?

JW: Execution. Great ideas only take you so far. At the end of the day, it comes down to what you're able to accomplish, and how quickly you accomplish it.

BK: Thanks!

Copyright (c) 2001 by Benjamin F. Kuo. All rights reserved.
May not be reprinted without permission.