BEAVERTON CITY COUNCIL
SPECIAL MEETING
BUSINESS ROUNDTABLE
JUNE 27, 2005

CALL TO ORDER:

The Special Meeting of the Beaverton City Council was called to order by Mayor Rob Drake at the Open Technology Business Center, 15455 NW Greenbrier Parkway, Beaverton, Oregon, on Monday, June 27, 2005, at 6:45 p.m.

INTRODUCTIONS:

Present were Mayor Drake, Couns. Catherine Arnold, Betty Bode, Dennis Doyle, Fred Ruby and Cathy Stanton. Also present were Chief of Staff Linda Adlard, Economic Development Manager Janet Young, Assistant City Attorney Bill Scheiderich and City Recorder Sue Nelson.

Others in attendance were: LaVonne Reimer, Launch Director, Open Technology Business Center (OTBC); John LaSelle, President, Trillium Software; Mark McChrystal, President, Termsys; Stan Curtis, IBM; Wilf Pinfold, Intel; John Joye, CEO and Tom Fortune, Vice President, Audioglobe; Tim Witham, OSDL; Greg Cosmo Haun, Codefetch; Scott Lewis, Eclipse Foundation; Brenda Meltebeke, Ater Wynne; Ed de la Fuente and Dorian Simpson, Planning Innovations.

TOUR AND UPDATE ON OPEN TECHNOLOGY BUSINESS CENTER ACTIVITIES

Economic Development Manager Janet Young presented a history of the development of the software-focused incubator. She said the incubator’s name was changed to Open Technology Business Center (OTBC) and it was a 501(c)(3) organization. She said LaVonne Reimer was the Director of the OTBC for the launch period and Heather Oiland was the Office Manager. She said during the first six months they had worked to establish a solid internal foundation for the OTBC, developed external alliances, sponsorships and partners for the OTBC.

Young said the original vision in the Business Plan was to promote Beaverton as the premier place in Oregon to start and grow technology businesses. She said the mission from the Business Plan was to be the focal point for attracting technology entrepreneurs developing software applications and solutions for specialized sectors of the software industry and the OTBC was becoming that place. She said the OTBC provided them with critical expertise and coaching, a network of contacts and flexible office space designed to foster growth.

She said there were thirteen companies renting space in the incubator who were not affiliated with the Center, and three or four of those were in fields closely aligned with what was occurring at the OTBC. She said Ms. Reimer would discuss the resident companies which were currently affiliated with the Center.

OTBC Director LaVonne Reimer provided Council with an information packet on the OTBC (in the record). She presented an overview of the companies currently at the OTBC and said some company representatives would speak briefly about their projects. Current resident companies include: Audioglobe, Furfly, Liquid Markets and Stunt Computing. She said the OTBC provides startup teams with a variety of strategic services. She said the OTBC's six-month launching process concluded May, 2005 and she was excited about the companies engaged in this project. She said the companies represented innovations of various types, the teams were smart and they had the potential to have a strong economic impact on Beaverton. She said the startups were in good shape in terms of quality of ventures and investors were interested in hearing the presentations of several of the startups. She said there was substantial national and international interest in the OTBC and it was promising that the entire major global technological organizations related to open technology were aware of the OTBC and were following what was happening. She said they were working on sponsorships and that the time commitment from consultants and employees of larger technological companies offset significant costs the OTBC would have incurred. She said executives, entrepreneurs and investors from the community donated extensive amounts of time to do such tasks as screening prospects or reviewing investment presentations.

Reimer said they were working with fifteen companies at the OTBC in some stage of the pipeline from strong interest in membership, to those working towards being accepted into the Center, to the current residents. She said she was working with the University of Oregon to conduct an Open Technology Focus Business Plan Championship at the same time the University holds its New Venture Championship this year. She said the OTBC and the University will share resources to make launching the competition more cost effective and they will hand-pick universities around the world that focus on open technology and invite those teams to come to Beaverton to compete. She said the OTBC had the opportunity to engage with projects starting at the earliest possible moment; it provides strategic support to startup teams; it gives them access to industry leaders and experts who serve as advisory boards; and it teaches them how to raise money and attract investors for their projects.

Jon Joye and Tom Fortune, Audioglobe, said they had been in the OTBC for three months and gave a brief history on Audioglobe. Fortune said they were a music-based product company. He said the OTBC had helped them grow and mature as a company and they were looking forward to the future.

Mark Crystal, President, Termsys, reviewed how Termsys started and became involved with the OTBC. He showed a sample of their bar-code based product. He stated the OTBC assisted him with focusing his business plan and investment presentation.

John Lassell, Trillium Software founder, said he developed a records management software program that they are marketing in the sustainable building field. He said their software will be given freely to all users; they will gather the data into a database which Trillium will mine. He said their profits will come from mining the database. He reviewed how the OTBC helped them contact venture capitalists and consultants to market their product.

Mark Malloy, Liquid Markets founder, (contacted by conference call), reviewed Liquid Markets' products. He said OTBC helped immensely in the development of their products.

Mayor Drake asked whether the money raised by these early stage companies was used to purchase consulting assistance or to put a roof over their heads.

Reimer said it was a case of keeping the roof over their heads. She said these were people who bought into delayed gratification and who understood they first need to address basic needs. She said OTBC's goal was to provide the services for which businesses would normally pay significant consultant dollars. She said the volunteer executives who consult with OTBC participants, are able to give good advice in a short period of time; that also saves the startup companies months of time of having to learn from their own mistakes.

Assistant City Attorney Bill Scheiderich asked what the market penetration was for open source platforms commercially.

Tim Witham, OSDL, said it depended on the market and if a license had to be purchased. He said moving upwards, it was Number 2 Server OS, and then either Number 2 Desktop OS or Number 3 Desktop OS.

Stan Curtis, IBM, said the open technology market was worth $6.5 billion and it would double before 2010. He said this was a huge market opportunity.

Brenda Meltebeke, Ater Wynne, said she could validate everything Ms. Reimer and the startup companies were doing. She said from the legal perspective, the OTBC was a boon to the area and the open technology field. She said Ms. Reimer brought many resources to the startups at the OTBC. She said Ater Wynne was a sponsor of the OTBC, they had referred startups to the OTBC, and they provided consultants to the OTBC. She said the OTBC had considerable support from many resources in the region.

Scott Lewis, Eclipse Foundation, said he was an entrepreneur, a member of the Eclipse Board of Directors and a lead in the Eclipse communications projects. He said Eclipse was a broad consortium of software companies that pay dues annually to join Eclipse and were committed to developing one Eclipse product per year. He said Eclipse was a community of software companies and individuals working to build a software infrastructure and companies based on the technology.

He said there were over 100 members in Eclipse and they had eight top-level projects and 43 sub-projects. He reviewed their membership as of 2005. He said Eclipse had more than 50% of the market share of the integrated development environment for job-based tools. He said their market share was growing rapidly and they were moving toward developing other software applications.

Reimer underscored the quantity and quality of participation the OTBC received across the board from the legal community, the open source community, the entrepreneur community and the major industries locally. She said they will list on the Web site all those who participated in helping the OTBC. She said there were eight venture capital firms that have agreed to review the plans of companies referred by the OTBC; this is a significant factor since they receive so many plans that it is often difficult to get them to review one which crosses their desk.

Coun. Arnold asked why people joined the Board.

Reimer said there is not yet a formal Board of Directors outside the original City members, but she has been meeting with an informal Advisory Board. She said those on the Advisory Board were excited about the open technology possibilities and wished to contribute their own resources. She said they wanted the startups to be successful; that reflected well on the region and would generate economic development. She said they were driven by a common sense of purpose.

Coun. Stanton said when this was first presented she felt it was similar to basic infrastructure and it was the best thing to do to maintain a healthy job base and technology in Beaverton. She said she was happy this was brought forward to the Council. She thanked everyone for the work they were doing to bring their ideas forward and develop them.

Mayor Drake thanked Intel and IBM for being instrumental in the development of the OTBC. He said he and the Council endorsed this concept because they were building and supporting clean industry. He said in looking at the long-term picture of how Beaverton would develop, this enforced the good work previously done by others; this would strengthen Beaverton and Washington County.

Mayor Drake asked Ed de la Fuente and Dorian Simpson from Planning Innovations to talk about why they located to the OTBC.

Mr. de la Fuente said they moved into the OTBC in January. He said the OTBC was in line with what they do, which was to help companies identify, evaluate and successfully launch their products. He said they worked primarily in the technology field. He said their clients included Quest Communications and Motorola. He said they also worked with startups in the San Francisco Bay area.

Mr. Simpson said the OTBC holds open round table discussions with participants in the open source community to unders tand current business models and determine what was changing in open sourcing and in the entire field. He said the more they unders tand regarding the changes, the more successful they would be in the OTBC.

Brenda Meltebeke said people serve on the Board because they like to work with startup companies and this opportunity does not have an equal anywhere else in the region. She commended the City Council for having the courage to provide this opportunity. She said OTBC would put this area on the map.

ADJOURNMENT

There being no further business to come before the Council at this time, the meeting was adjourned at 8:00 p.m.

APPROVAL:

Approved this 18th day of July, 2005.

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Rob Drake, Mayor