A New Incubator, Launch Code, Courts Customers — and Employees

There are plenty of people who aspire to be entrepreneurs but who lack the know-how, the network, or the risk profile to succeed in that ambition.

Serial entrepreneurs Ryan Koonce and Robert Afshar think they’ve struck on a business model that can benefit some of those people, while also minting money for themselves.

The pair’s solution? Launch Code Technologies, a four-month-old holding company that Koonce likens to an enterprise resource planning platform for startups. LaunchCode is coming up with the ideas and marketing plans; it has the five-person engineering team in place. Now, from roughly 6,000 square feet of space in a high rise in downtown San Francisco, the company is looking for people to help turn those ideas into ventures big enough to potentially spin-off and receive outside funding.

It’s akin to Science, the L.A.-based incubator co-founded in late launch 2011 by former MySpace CEO Mike Jones, though Science both develops internal ideas and accepts outside ideas from other entrepreneurs. Koonce — a serial entrepreneur whose past startups include the social media marketing company PopularMedia, acquired by StrongMail in 2009 — says LaunchCode has plenty of ideas of its own.

LaunchCode also plans to compensate employees using good-old fashioned salaries. Only if an initiative evolves to the point of attracting outside investment will an employee receive a stake in the subsidiary.

Koonce thinks the conditions are more than reasonable. For one thing, both Koonce and Afshar are expert in loyalty systems, reward platforms, and media buying and optimization and expect to use that experience to drive initial customer adoption for each business. Indeed, LaunchCode is operating on an undisclosed seed amount of funding from Afshar, who founded the online marketing company LeadClick Media. Ashfar sold 75 percent of the company to two companies — First Advantage and First American Corporation — in 2005 for $150 million. He sold the rest of the company to First American for an undisclosed amount in 2009.

Koonce says that collective experience should give LaunchCode a leg up on the competition, particularly when it comes to developing subscription commerce businesses (it’s already working on monthly services centered on dog treats and bass lures, respectively), as well as other initiatives LaunchCode plans to introduce. Indeed, its first site to go into beta is a daily fantasy sports site called DoubleUp.com. And Koonce says LaunchCode expects to hold a product launch every 30 to 45 days going forward.

“Most of [today’s] startups build a product, try and get eyeballs, then hope they can monetize those users in some way,” says Koonce. “Our process is completely defined by businesses that we believe will have a greater lifetime value than the cost to acquire the consumer. For us, viral marketing is what we’re good at. So when we spend money to get traffic, we’re going to quickly understand how much money we can get [back in return].”

Besides, say Koonce, LaunchCode is a place to gain leadership skills. “Maybe you become a director of one business; it doesn’t mean you can’t become CEO of the next business.” (In fact, the company already has two employees in its “leadership” program. Asked for the ideal candidate, Koonce says that a director at a company like Yahoo would be attractive. LaunchCode is looking for “someone who might know 50 percent of what they need to build a company. We can teach them the other 50 percent,” he says.)

Whether LaunchCode can lure the types of employees it needs to succeed remains to be seen. But it certainly seems like a less risky way for would-be entrepreneurs to test the waters.

“The beauty of our model is that we don’t have to be passionate,” notes Koonce. “We don’t have one idea, or just one business. We have the luxury of throwing things out. And we fully expect to do that.”

Update: An earlier of this version mistakenly referred to Launch Code as LaunchCode. The company has also asked that we include that it has an office in Las Vegas, where Afshar is primarily based, as well as San Francisco.

Image: LaunchCode logo courtesy of LaunchCode Technologies.