The Download: Coaching Start-Ups

By Kim Hart
Monday, June 8, 2009

Jim Basara of Falls Church came up with an idea to offer luxury goods over the Internet. As an executive and amateur musician, he wanted to be able to rent a nice guitar that would be waiting for him at his hotel while he was on the road. When he couldn't find such a business, he started his own.

Guitar Affair lets enthusiasts rent boutique and high-end instruments by the week. Consumers pay a one-time fee, and then pay each time they want a guitar sent to their home or a hotel. If they like the instrument, they can buy it.

He had already shipped about 30 guitars across the country when he formally launched his site two weeks ago. But Basara, who was chief operating officer of Herndon-based Language Analysis Systems before it was acquired by IBM, has a few hang-ups. He doesn't have time to go through the deluge of inquiries he received after recent media coverage. And he's noticed that customers don't realize they can actually buy the guitars.

He spent about an hour and a half Thursday afternoon in a conference room discussing possible solutions with his business advisers: Jonathan Aberman, managing director of Amplifier Ventures, a McLean-based venture capital firm; Michael Dering, former chief executive of ServiceBench, an online warranty claim manager based in Sterling; and Richard Moore, who is on the board of directors of Vocus, a Lanham-based public relations software firm.

Aberman suggested taking guitars to an open-mike night at a local nightclub to create buzz about the company. Maybe rent a kiosk at an upscale mall to generate interest. Moore said a public relations SWAT team could be formed to help deal with the questions coming to the Web site and join online discussions. Dering pointed out that the Web site should have a separate section to sell guitars and accessories.

Guitar Affair is one of six companies in the Business Accelerator Program launched by Amplifier three months ago. The firm invested $50,000 in each in exchange for a small equity stake. The start-ups are also receiving three months of personal attention from the three advisers, who brainstorm ideas, help stave off financial issues, coach the founders on pricing models and connect them with others who might be able to help.

"This is about providing a service to these companies, not just money," Aberman said. The Accelerator program aims to provide intensive attention to the companies "and then keep working with them but bring in new companies that need intensive help," he said.

The companies are in various stages of development and have different needs.

Intensity Analytics, a company run by John and Bethann Rome, of Warrenton, was also seeking guidance last week. The Romes are developing a product that monitors how people use their computers. Their assignment since their last meeting with the group three weeks ago was to find five to 10 customers who would agree to test-drive the product in "beta" form.

The Romes found six such customers, but now they're struggling with how much to charge them. And a few of the customers want to become investors. Aberman and Moore suggested holding off on taking more money until the Romes are more sure about the direction of the company. Do they want to build a long-term business or build a product that another company would want to buy, Dering asked.

"If you take money now, you'll have to give up too much of the company, and you shouldn't do that before you figure that out," Aberman said. "You need to model out costs. Do you need a CFO-type person to help you out with that?"

John Rome said they were planning on asking John Hurley, who runs the venture pipeline group at law firm DLA Piper in Herndon and also helps advise companies in the Accelerator program, to take a look at their plan. In fact, they'd had lunch with him that day.

"Ah, he'll be great for that," Aberman said.

The Romes also have been asked to bid on a project worth $3 million over six months. But the project would distract them from continuing to develop the company. Bethann said she is concerned that they may not be able to arrange a business line of credit -- especially in this economy -- to have the cash flow to keep up with the costs of overseeing 30 engineers.

"That's a financing issue that can be worked out," Dering said. He said the project would be a great way to get revenue and defer the need for outside funding while also testing the product.

"Every company was a new company at one time and needed new customers," he said with encouragement.

Howard Wins Engineering Grants

Howard University got $150 million richer last week.

The university has been awarded a series of in-kind grants from Siemens PLM Software, a division of the company's automation group. The grants are the largest in the university's history and will go toward strengthening the engineering curriculum.

The grants include engineering software, student and instructor training, and specialized certification programs. The division of Siemens that awarded the grants focuses on product life-cycle management (PLM), which helps companies collaborate, track and manage long-term projects. This gift is part of the Partners for the Advancement of Collaborative Engineering Education program, a corporate alliance between General Motors, EDS, Sun Microsystems and Siemens that was formed to enhance engineering and science education.

"We benefit because we can hire people who know our software, and our customers benefit because they can also hire people versed in the software they use," said Tony Affuso, chief executive of the Siemens PLM Software division.

James H. Johnson Jr., dean of Howard's College of Engineering, Architecture and Computer Sciences, said the grant will help students gain "practical experience necessary to prepare them to enter the workforce as future engineers."

Kim Hart writes about Washington's technology scene every Monday. Contact her at

© 2009 The Washington Post Company