From the April 1999 issue of Startups

They haven't quit their day jobs; Lovy Page and Tory Agent still share a squad car as police officers five days a week (and Page, 30, still finds time to compete as a professional heavyweight boxer). But last August, the childhood friends became entrepreneurs, launching Donuts 4 U, a pastry shop in Dallas.

"[We] knew if there was an eatery here, especially one that everyone could afford, it would do really well," says Agent, 27. "Everyone's eaten a doughnut in their lifetime, just like everyone's been to McDonald's. And everyone will eat a doughnut again."

OK, so maybe he's speaking for himself--and the rest of the force--but cops aren't the shop's only customers. Donuts 4 U is surrounded by 12 schools and more than 30 churches within a one-mile radius or less. The numbers tell the story: Sales have exceeded $500 a day since the store's inception. Local media couldn't resist playing up the cops-and-doughnuts image, giving Donuts 4 U just the publicity boost it needed.

The fiscally conservative pair were able to launch their company without outside financing, since they worked special assignments for the police force during their off-hours and invested the extra income. "Instead of going out and buying a $70,000 or $80,000 car, we put that money into the business," says Agent.

Thanks to a marketing strategy that focuses on group accounts for churches, hospitals and other businesses (they even snagged exclusive pastry rights to last January's Cotton Bowl championship), the partners expect sales to more than double this year. "We have an unconditional commitment to success," says Agent, "and now's the time to make it happen."

Party Line

By Heather Page

High-tech entrepreneurs today are plugging into the latest business-networking phenomenon--and we mean quite literally. Ditching the traditional, stodgy suit-and-tie gatherings, hipper and happier hunting grounds are being found at what's been dubbed "LAN parties"--loud bashes where party-goers come bearing computer hard drives to hook up to an on-site network for competing in multiplayer games.

Dim lights, wall-to-wall computers and the brash sights and sounds of Quake II set the scene for these informal, lively gatherings. Computer enthusiasts and high-tech industry types come to hang out, scout out technical talent, mix with other businesspeople and press the flesh.

"They're a place to meet people involved with programming, networking, 3-D games and high-end computing," says Mark Surfas, president and CEO of GameSpy Industries, a Costa Mesa, California, computer consulting firm that hosts the popular BeatDown party.

LAN parties are being hosted in a variety of locales nationwide--even around the world. (Check out http://www.lanparty.com for a listing of the latest parties, dates and times.) Some are somber events; others boast loud music and drinking, feature participants in wild costumes and last for several days.

Most people play computer games first and talk shop second. But that may be changing. Says Surfas, "[LAN parties] are becoming more about socializing and relaxing. You're beginning to see all types of people now."

What The Hell?

By Michelle Prather

Satan. Beelzebub. Lucifer. Prince of Darkness. All aliases under which the devil does business--a business that seems to be, er, on fire these days. But don't resort to day-long prayer sessions just yet. We're not forecasting an upswing in Satanism, á la Rosemary's Baby, but rather a harmless (arguable, we realize) marketing frenzy that's employing the devil as an icon for the new generation.

"I think [devil imagery] was considered taboo before. But as the younger generation's getting older, [the imagery is] less offensive and less symbolic of anything Satanic," says Ron Walden, director of sales and operations for Los Angeles clothing company Third Rail USA Inc., which uses the horned one as its logo/mascot. Walden claims Third Rail's draw is due to its overall edginess but admits the "mascot T-shirt" (featuring that pesky devil) is a bestseller.

The devil's even being sold in a completely blatant fashion, and companies doing it aren't suffering, even though large chains sometimes opt not to carry their goods. "I luv Satan" is emblazoned across a line of T-shirts, hats and beanies made by Oakland, California, Cinder Block Inc., a music-merchandise company that distributes licensed products for bands and does custom and contract screenprinting. To date, they've sold 3,000 of the shirts alone. Co-owner Jeffrey Bischoff, 36, says shock value's the probable culprit: "People who wear something like that are looking to kind of rebel and say `Listen, I'm not all good--I'm a little bad.' "

There's also the traditional, very nonoffensive way of selling the devil, as COP Corp. in New York City is doing with its licensing effort for The Harvey Entertainment Co.'s devil in diapers, Hot Stuff. "He's `the devil made me do it, mom' edgy character that's both devilish and impish," says COP president Carole O. Postal. Soon, the junior specialty market (including apparel, backpacks, watches, key chains--anything you can slap a logo on) will be infiltrated with Hot Stuff's likeness.

Just as 1997 and 1998 were years when anything angelic soared beyond belief, maybe 1999 will be the year of the devil (you know what we mean).

Wigged Out

Businesses We'd Like To See: a company that makes hip toupees for young guys. Since comb-overs won't cut it and transplants are too pricey, rugs in hairstyles guys under 60 actually wear would be a welcome solution. (It sure beats the ubiquitous shaved-head-and-goatee look.)

Take A Bite Out Of Taxes

Before you head out to that fancy lunch with a client, do the math: How much of the dining experience is deductible? Here's the scoop. (Don't forget to save your receipts.)

Meals and entertainment (including tips):
50 percent

Travel (including parking):
100 percent

Back At The Ranch...

By Laura Tiffany

He'll say your marketing plan sucks. He'll tell you your venture capital presentation is BS. You may even feel close to tears. But when it's all over, Rob Ryan will be your most cherished--and respected--business mentor.

In 1995, Ryan retired from Ascend Communications, the multibillion-dollar computer company he founded, but he wasn't quite ready to rest. Wanting to give back to the entrepreneurial community, he created Entrepreneur America, a mentoring organization where he invites young entrepreneurs to stay at his Hamilton, Montana, ranch for three-day mentoring sessions. He rips their business plans to shreds and helps them reassemble the pieces into a more coherent--and, hopefully, successful--business model. So far, Ryan's had about 75 visitors to his ranch and has read the business plans of some 500 other companies seeking his tutelage.

"I look for product and marketing opportunities that are going in the opposite direction from the herd," says Ryan, who follows his apprentices' progress after the visit via e-mail and phone calls. Entrepreneurs, usually founders of high-tech and engineering companies, connect with Ryan through his Web site and his visits to universities like Cornell (where he serves as adjunct associate professor), Stanford and MIT.

"The flaws I see with start-ups are, they haven't done enough marketing, they haven't talked to prospects, and they don't know how their idea is really received," says Ryan, who dissects each company's business plan as a venture capitalist might. "They've [often] fashioned their businesses in the hardest way possible to secure money."

Gregg Favalora met Ryan in 1997 while attending a lecture at MIT. "I was really thrilled and really scared," says Favalora of the first invite. "I went to his ranch expecting he would rip me apart, and he did. That's why you go." Favalora, 24, co-founded Actuality Systems Inc., a 3-D computer display company in Cambridge, Massachusetts. "Frankly, I'm only beginning to reap the benefits of a lot of the things he said. He sets things in motion that will matter five or 10 years down the line."

Virtual Reality

By Shannon Kinnard

Got a great idea . . . but need money to get it going? You might benefit from a virtual incubator.

Unlike traditional incubators, which offer a protected, safe environment for start-up entrepreneurs to nurse their fledgling businesses, virtual incubators are typically Web-based resources. They help companies in the early stages of development that plan to eventually seek major funding. Members may be start-up companies seeking angel investors, or entrepreneurs in the pre-start-up stage who are seeking legal, accounting or marketing resources.

"Virtual incubators screen entrepreneurs, vendors and investors against a number of criteria," says Mark Kazlauskas, manager of Netcelerate, a virtual incubator that assists high-tech, Georgia-based, SEC-accredited companies.

To find the right virtual incubator, remember that exposure to potential investors is your primary goal. Look for free--but screened--membership, which minimizes your financial risk and gives you instant credibility. Ensure the management team has experience raising capital at every stage of growth, plus connections with investors in your area. Also look for opportunities to get your name on the site, through chat forums or a member directory.

To find virtual incubators, start with traditional incubators in your state or industry and see if they have online counterparts. Also investigate these virtual incubators: http://www.entreworld.org , http://www.bftc.org , http://www.garage.com , http://www.enterprise.org/enet and http://www.amisventures.com .

Shannon Kinnard (shannon@ideastation.com) covers technology incubators as the assistant editor for digitalsouth magazine.

Contact Sources

Actuality Systems Inc.,http://www.actuality-systems.com

COP Corp., (212) 249-1484

Cinder Block Inc., 1007 41st St., Oakland, CA 94608, (510) 658-2917

Donuts 4 U, (214) 428-3333

Entrepreneur America, mark@gamespy.com

Third Rail USA Inc., 110 E. Ninth St., Ste. B-531, Los Angeles, CA 90079, (213) 489-0711