Self-Help for Startups

It's an unseasonably warm January evening, and the darkened office in lower Manhattan is packed. This is the monthly meeting of a new group for entrepreneurs called Ultra Light Startups. Sheraz Sharif, a lanky 30-year-old, stands up to pitch his idea, looking over the crowd of 80 sitting on white foldout chairs and floral print couches. He doesn't have a Web site yet. Instead, he points to a one-page outline projected onto a massive roll of paper hanging from the ceiling. It describes his plan to create a site for product reviews aimed at Hispanic Americans. "There are few sites going after this culture, and it's the fastest-growing U.S. population," says Sharif.

A buzzer on the moderator's iPhone trills. The one minute allotted for each entrepreneur's pitch is up. "I'd really welcome feedback," Sharif hurriedly adds before dropping into his seat.

Starting Up on the Cheap

Ultra Light Startups was founded 10 months ago by Graham Lawlor, a tall, blond 35-year-old who used to work on technology projects in the financial sector. As Lawlor says repeatedly throughout the night, the group is set up exclusively for entrepreneurs. Venture capitalists or large businesses trying to sell services are strictly forbidden. Lawlor wants entrepreneurs to be able to share freely their advice for starting companies on the cheap and keeping as much control as possible.

The group has taken off partly because of the rough economy. Fifteen people showed up at the first session last April. But during the past year, attendance began climbing and changing. While the meeting draws serial Web entrepreneurs, increasingly it's people who've been laid off from financial firms, ad agencies, and media companies—or those sick of worrying about when the ax will strike—who are showing up. "With the economy now, there is so much fear and such an unwillingness for most people to take a risk that it's a wonderful opportunity to start a company," says Sharif, who was laid off from advertising firm DDB in December. "Finding a group of people who want to come together and take advantage of this is what I needed."

Meetings for techies take place in cities all around the U.S. But after doing the rounds in New York, Lawlor felt there was room for one focused on entrepreneurs. "I'm willing to open up my kimono when I know that everyone is doing the same," says Lawlor, who worked at Deutsche Bank (DB) and UBS (UBS) before leaving to get a master's in economics and focus on his own startup ideas. "That's only possible where everyone in the room is an entrepreneur and going through the same thing." Sharif and 40 others go through the pitching exercise; the rest of the attendees are panel members or people who are planning to pitch in a month or two. It costs $5 a head to participate, so Lawlor can order in food for the group.

Tonight's meeting, in the borrowed offices of a Web video developer, follows an established pattern. One by one, the entrepreneurs get up and describe their startups, ranging from Proper Cloth, an online retailer that sells custom shirts, to Unype, a service people use with Facebook and other social-networking sites to track their friends' geographic locations. The entrepreneurs use the minute to try out their pitches, explain what's working, and list the help they need.

During a 20-minute pizza break, armed with info from the pitches, attendees make a beeline for people they think they can help or learn from. Then the rustling audience is called back to their seats to listen to a practical panel. The discussion this time, about a revenue-model workshop, hits close to home. The crowd carefully listens for two hours as five early-stage venture capitalists and startup consultants critique the business models of five young companies. Each month, the panel is convened beforehand by Lawlor. He invited VCs to help review the business models of five young companies for the January meeting.

Seeing Opportunity in a Downturn

At the break, there's a nearly unanimous sense among the entrepreneurs that starting a company during a downturn means cheaper talent, less competition, and more independence. "I wanted to take the opportunity to be the one in control of innovation and work on something that I believe in," says Jennie Baird, who co-founded Generation Grownup, a group of niche parenting sites, after being laid off last year as the editor-in-chief of iVillage, a women's site owned by NBC Universal (GE). Baird's startup is growing and covers its costs. But in the face of dwindling rates for online banner ads, she came to Ultra Light Startups for help recruiting sponsors. "Just the fact that people are excited is good to be around," says Baird, who makes connections she follows up with later.

There have been no breakout hits so far. But through the Ultra Light group, startup Web design shops and online ad services have signed up new clients and attendees have found jobs. In August, 28-year-old Alicia Gibb, a robotics enthusiast, met another entrepreneur who invited her to lunch with the head of human resources at a New York startup called Bug Labs. A month later she had a job with the company, which sells kits that snap together to build customized digital cameras or GPS locators.

For Sharif, who moved to New York from Miami in December, the pitch session was a chance to test his idea in front of others and get a better understanding of how attendees finance their ideas. During the break, he networks in a corner of the room with a group of people, including someone starting a Spanish-language social-networking site and another person who advises him to build a translation engine and consider partnerships with existing review sites. It may be an odd time for optimism, but Sharif is upbeat. "I was laid off, and it felt like it was time," he says. "Now that I am here, I'm going to be aggressive."

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