In Depth

Starting Up in a Down Economy

Venture capital investments are down and many financial institutions are struggling. But security entrepreneurs Doug Camplejohn, Aaron Turner and Mike Rothman say if the idea is good, the time is right to launch a company.

By Joan Goodchild, Senior Editor

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"In many ways, some things are easier in tough times. But great companies can be started at any time."

Aaron Turner: The case for investment

A former strategist in the security division of Microsoft, Aaron Turner left the software company in 2006 to begin research and development at the US Department of Energys Idaho National Laboratory. For two years, Turner worked on, and eventually patented, a cell phone-based payment and identification system. It is technology Turner believes will be crucial to the future of mobile security. The resulting startup, RFinity, received its first round of funding last September. It wasn't an easy day.

"Our final meeting was one of the worst days for the Dow," Turner recounted. "So, we were literally sitting across table from our investors, looking at them, saying, 'OK, we believe this is a solid technology, you believe this is solid technology. We both believe this is a good business-model.' It was really galvanizing from our perspective, as the founders of the company, to see that validation in their eyes and their commitment to investment in us."

With their first funding hurdle conquered, Turner and his partner, Steven McCown, have now turned to bringing their message to potential partners and customers. Conversations can be just as difficult as the day Rfinity closed its funding.

Case in point, said Turner: He and McCown have been engaging with some of the large financial institutions that are receiving TARP (Troubled Asset Relief Program) money.

"There were a couple of instances where people were diverted from meetings they were supposed to have with us to meet with members of the Department of the Treasury to discuss how they are going to use their TARP money," he said. "We need to be able to articulate a message that is compelling enough to prioritize our meeting over talking to the members of the Treasury to let their business survive. Why should they take the time to meet and talk to us when their business is crumbling around them?"

But Turner, like Camplejohn, believes regardless of what is going on inside a financial institution, if the promise of profit from a product is there, it will find a way to market. Rfinity is already in early talks with a handset manufacturer to integrate their security technology into a phone.

"It's not about the externalities. It is really about believing in ourselves and the validity of the technology," he said.