Russ: This is the BusinessMakers Show heard here and online at theBusinessMakers.com. It's guest time on the show, and my guest now is Shobeir Shobeiri, business relation manager and team founder of plugandplaytechcenter.com. Shobeir, welcome to the BusinessMakers Show.

Shobeir: Well, Russ, thank you for inviting me.

Russ: You bet. Let's start by you telling our listeners what is plugandplaytechcenter.com.

Shobeir: Plug and Play is a really cool environment for let's say if you're a tech junkie who wanted to do a startup idea, we basically are your home. Think of Silicon Valley in a box, in a building, and that's what we are. We facilitate you by housing you there so you could move in shop, have your company there. And then the value of us is the ambiance, the atmosphere, along with getting you scaling with venturing financing and a lot of other stuff.

Russ: Kinda sounds like an incubator.

Shobeir: It is kind of an incubator, but we call it a tech center because it's for profit. We're not a traditional government-owned entity. We're hungry ourselves to help these companies, 'cause if these companies succeed, we succeed.

Russ: Okay. Is the rate for leasing office space, is it economical?

Shobeir: We are kind of economical. We value it a little more because of the services that we provide.

Russ: Sure, okay.

Shobeir: So once you move in, you get access to all our events without paying costs for that, the exposure factor. You get Times coverage on press, and we don't charge for that type stuff. So it's just the value of being at Plug and Play. But you pay a little bit more for the real estate side.

Russ: So how many clients does Plug and Play have today?

Shobeir: Roughly 238 startups from all around the world there.

Russ: (Laugh) Goodness. And where all do you have offices now?

Shobeir: We started in Silicon Valley, so there's three locations there, Sunnyvale, Palo Alto, and near Stanford in Redwood City. And then we just opened this summer in Southern California in Hollywood, Los Angeles, and in Glendale.

Russ: Okay. Is some of the assistance actually consulting and advising?

Shobeir: My initial role is I'm a relationship manager. So I'm not a traditional sales guy. I'm a liaison for these startups. Once they move in, I could advise and help them out.

Russ: Okay. And you're actually giving 'em business advice.

Shobeir: Correct.

Russ: Okay. And you also mentioned connecting 'em with funding and venture funding. How does Plug and Play do that?

Shobeir: Yeah. So we have this very cool process where basically if you run down what the traditional way of doing it – and you sent your executive or somebody to investors, there's this whole 10-percent ratio. Ten percent look at it. What we do is, we actually say, "Hey, come and do this 30-minute brainstorm session with the venture capitalists." And we make sure that that startup is actually ready to present to the venture group, so they come on a monthly basis. So the partners that have is like Draper Fisher, Canaan Partners. Those are a couple of the names that we work really hands-on with. And one of their partners, like Tim Draper, comes and sits down every month. We look at six companies. " So the ratio's cut down dramatically because they're at Plug and Play. That's one of the ways we do it. And then obviously, the events and just being at Plug and Play, these guys walk around and hang out with their portfolio that might be based there they could say, "Hey, what's this company?" and just walk into the cubicle all of a sudden. So –

Russ: So you actually have these relationships with these top venture capitalists –

Shobeir: Yeah.

Russ: – that agree to come by once a month and review what you think they oughta review.

Shobeir: Exactly. We've been around for almost four years. There's been about $700 million invested in our companies, half of which we've made the introductions at the initial stage, some of which we've actually helped close around.

Russ: My goodness. That's (Laugh) pretty good stuff.

Shobeir: And in an overall perspective, there's been ten companies who have been bought out in just less than four years.

Russ: That actually exited out.

Shobeir: That's correct.

Russ: Right, cool.

Shobeir: So we like to build relationships with the big corporate brand. As you could see here, we have Cisco, Microsoft. Best Buy's one of our closest relationships, which is very interesting. They have a venture arm and they want to be fairly active in the Valley as well at the very early stage because they –

Russ: Best Buy does.

Shobeir: Yeah.

Russ: Yeah, right. Okay. Well – but your relationship with Cisco, is that because Cisco bought a Plug and Play company?

Shobeir: As far as I know right now, no. I think they're one of the top three active companies who still purchase. So their corporate data team is always hungry and looking at startups potentially to buy out.

Russ: What does being a corporate partner with Plug and Play mean?

Shobeir: Yeah. We make it very easy for these companies at this early stage to build a relationship with the startups and give a fraction of the rate, let's say, if they want to work with them. So Microsoft has this program called Biz Spark.

Russ: Right.

Shobeir: And they offer free Microsoft products through this platform.

Russ: Right.

Shobeir: And then they could distribute it to our companies, or Sun Microsystems started this program called Startup Essentials, and they offer servers and rack space at a huge fraction of the cost that they would for a big enterprise company.

Russ: And so you're kind of introducing that to all of your client companies.

Shobeir: Exactly.

Russ: Alright. Let's say that I had a technology startup and I thought it might be interesting to check out Plug and Play and you got me interesting. Is it strictly a monthly rental arrangement, or do you guys actually sometimes take an equity position?

Shobeir: Let's say you walk in and you have a cool idea. We give you a grand 'ole tour. We talk and learn about your company and where you're at, at the stage you're in. You get a sense, also if you actually like us and our value stake. And then we kind of come to a consensus that you actually have a startup idea. Then, yeah, I would say, "Hey, this is how much it is to move in. how many people are you guys?" And then it depends at this stage. Generally speaking, if you're prefunded, more of a concept, Stage 2 even, a stage where you guys are – have developed a product or would like someone like me to accelerate it with getting the financing. We've done about 15 to 25 companies that we have gotten a hands-on – got advisory shares. We call it Gold Memberships. And we've got a good track record with those, so a lot of 'em do get the seed financing that they're looking for anywhere under a million dollars.

Russ: So if you wanted to do that with me and I didn't want to give up equity, would you still let me office there?

Shobeir: Yes, yes, of course.

Russ: Okay.

Shobeir: That's what I'm saying, like, my time is put a little bit more into this and my team and focused on, like, these certain companies. And we have a couple cool ones. You could check 'em out. There's one called Clickster out of MIT. There's one called TwitVid. They're a video platform for Twitter. They're out of Waterloo, Canada. And Zoosk is a big dating platform. They're –

Russ: And these are all companies that you have that you have that equity position in.

Shobeir: That's correct.

Russ: So when you talk about your team and your team helping out these companies, how big is the Plug and Play team?

Shobeir: We have about 35 people on our team.

Russ: Okay. That includes Southern California and Northern California.

Shobeir: Yeah, and all the divisions that we do have.

Russ: Right. So when you open new locations, you kinda have to equip it with a team as well, too, right?

Shobeir: That's correct. We're fairly aware of the talent pool and who we like to hire, one, but expanding to the national and global scene. For example, we've partnered up with actually universities and government agencies to kind of build business relationships and processes. So we're the hub for them right now in the Silicon Valley. And then what we do is, for example, Cornell is our first university we have built a partnership. And they're an incubator.We help them out and we say, "Whatever you guys are looking for for business planning competition," you come – we come and bring some friends of ours along with them getting their next stage, coming to the Valley to scale their businesses and host an event there and announce, "Hey, we're coming – moving out there, some of those startups." That's one example.Another one is like the Canadian Trade Commission. They're our biggest international partnership. So they look at thousands of startups and they narrow it down to, like, three to six per quarter coming to the Valley. And they come to Plug and Play and we help them out either in the funding or the business side of things, getting the partnerships, but while the development's still there. So, like –

Russ: So you're real attractive to a company that wants a Silicon Valley presence.

Shobeir: That's correct.

Russ: Okay. So before I let you go, Shobeir.

Shobeir: Yeah.

Russ: Tell me what the long-term plan is for plugandplaytechcenter.com.

Shobeir: We want to be having about 1,000.00 startups under our brand. And basically our present insight of meeting next year's goal is to go and partner with up to like say five global partnerships in which we expand the Plug and Play brand abroad.

Russ: Are you planning to open up other facilities across the United States as well?

Shobeir: That is potentially in the pipeline. So we do have a couple cities in mind. As of right now, we've the mayor of Austin. We've had people in Boston and Seattle, some of the tech clusters, Boulder. We've done some case studies on where it would be. So, yes, we are open to opening locations, but we'd be happy to partners with people who are interested.

Russ: Great. Well, Shobeir, I really appreciate you sharing the Plug and Play story with us.

Shobeir: Yeah. Well, thank you, again. I'm excited. Anybody who would like, feel free to contact me.

Russ: There you go. And that's Shobeir Shobeiri, business relation manager and team founder of plugandplaytechcenter.com. And you're listening to the BusinessMakers Show heard here and online at theBusinessMakers.com.