Breathing Life into an Enterprise – An UCSB Entrepreneurial Contest Leads Three Young Alums to Start Multimillion-Dollar Company
By Rob Kuznia
Originally published in the spring of 2009
While it’s true young entrepreneurial dreamers have all their lives to start that first business, some believe there’s no time like college — or the years immediately after — to take the plunge. One of those believers is Byron Myers ’01, and he should know.
The 2001 UC Santa Barbara graduate is one of three young founders of a business that began as an innocent idea for a UC Santa Barbara entrepreneurial competition.
Now, the three UC Santa Barbara alums own a company that generates up to $15 million annually, pays a handsome salary and employs 50 people. And here’s the kicker: Myers and the two others — Ali Perry ’03 and Brenton Taylor ’03 — are all still in their 20s.
Called Inogen, the Goleta-based business manufactures a portable oxygen concentrator for lung-disease patients. The suitcase-size oxygen generator is designed for those who suffer from Chronic Obstructive Pulmonary Disease, which is usually caused by smoking and is the fourth leading cause of death in the United States.
Inogen One is a lightweight answer to bulky stationary systems that tether people to their homes and air tanks that need to be refilled every couple hours.
Given their status as a local success story, the Inogen One founders are often invited to speak in classes at UC Santa Barbara. Myers, the company’s 29-year-old director of marketing, likes to encourage students to strike out on their own right out of college.
“You don’t have much to lose — no mortgages to pay or kids to feed,” he told Coastlines. “Now is the time to see if you can make something happen.”
As the trio has shown, you also don’t need a degree in engineering. Myers and financial controller Perry were math and econ majors; technology director Taylor was a biology major.
To date, the company has sold 20,000 units, which fetch between $4,000 and $5,000 apiece. The young entrepreneurs wracked up numerous accolades, including mention in Inc. magazine’s annual “30 Under 30” issue profiling “the coolest young entrepreneurs in America” of 2007.
The success of Inogen One underscores the power of a simple idea, especially one that offers a solution to a common frustration.
It all began when the college friends decided to enter a contest that is now known as the New Venture Competition hosted by UC Santa Barbara’s Technology Management Program, which offers courses about the process of commercializing new technologies.
It was near the holidays, and the contest didn’t get under way until after winter break. The group went home to their respective families and ruminated.
At the time, Perry’s octogenarian grandmother, Mae Stoneman, was suffering from COPD and had just been prescribed an oxygen tank. Stoneman lamented how this could prohibit her from embarking on some of her dearest pursuits, such as attending plays and going on cruises.
At 55 pounds, the device that generated the oxygen for her portable tank was the size of a mini-fridge, and could not be transported. The thought of running out of oxygen outside the house — say, during a traffic jam — was terrifying.
Then came the million-dollar idea: Why not design a portable device that does it all?
With this in mind, the group set about crafting the concept for the competition, which requires a business plan and a good pitch. To say they impressed the judges would be an understatement of the highest order.
Odell and CooperThe judges not only awarded the team first place, they encouraged the students to give it a real go. What’s more, two judges continued to work with the students to help them refine the idea.
Then, one day, during a meeting at a coffee shop, one of the judges, UC Santa Barbara alum Steve Cooper ’68, made an announcement.
“He said, ‘We’re at a point now where I want to invest in your company,’ ” Myers recalls. “That was a surprise. Then it became much more serious.”
Cooper — currently the CEO of Skyler Technologies — became the company’s first chairman. The other judge, Kathy Odell, became the CEO. (The company recently hired a new CEO, Raymond Huggenberger.)
Using Cooper’s $200,000 investment, the company created a prototype. By fall of 2004, the device was ready to roll off the production line. At 10 pounds, the oxygen concentrator — which is designed to last five years — can be carried like a suitcase, complete with a lightweight cart on wheels and a retractable handle. In 2005, the Federal Aviation Administration approved its use on commercial airliners.
The first model off the line went directly to Stoneman, who soon after hopped aboard a cruise ship, Myers said. She used the device for three years before dying last year. She was in her late 80s.
Myers, who graduated two years before his younger business partners, acknowledged that the company has felt the sting of the recession. Although he declined to reveal recent revenue figures, the 2007 article in Inc. magazine said the company at the time had 100 employees.
Still, Myers said he is very optimistic about the future, and added that the push now is to go public. He also plans to stay with the company for a long time.
“We’re not looking to just get acquired quickly,” he said.
Meanwhile, despite his success, the San Diego native is still reluctant to purchase a home in Santa Barbara, where median price of a home in late March was $715,000, the highest in California.
“I was never comfortable with the housing prices here,” he said.
So for the foreseeable future, Myers and his partners will continue to work on their business, strive to take it public, speak to students in the Technology Management Program, and pay rent.