UCI’s De-Acceleration : Rumors Fly After Business Program’s Sudden End

A small university-based effort to spur entrepreneurship does not sound controversial. So when UC Irvine’s new business school dean canceled the Accelerate business development center last month, who would have thought it would touch off a rash of rumors, finger-pointing and second-guessing that shows no sign of abating?

Sure, universities can be highly political places, and UCI is no stranger to the taint of scandal.

But Accelerate’s mission hardly seemed likely to ruffle feathers. Encouraging new businesses is one of the most fervidly discussed topics in Orange County, and it’s widely believed that support programs such as this are badly needed.

Those with inside knowledge of Accelerate, however, say that relations between the program’s strong-willed director and university officials had grown so acrimonious over the years that the relationship was bound to explode at some point.

Call it . . . Accelergate.

More than a month after the closure, only a few of the dozens of people interviewed for this story would allow their names to be used--even as they privately aired their hard feelings and whispered theories.

Rumors being bandied about run the gamut from “somebody really big was behind this” to “somebody must have been doing something really bad.” Some are downright outlandish and none could be substantiated--but they’ve put everyone involved in an uncomfortably defensive mode.

David Blake, who joined UCI as dean of the Graduate School of Management on Oct. 1, maintains that he ordered the shutdown largely because of a possible gap in government funding that could have cost the university more than it wanted to pay. He also wanted a broader program that would collaborate with the university and business community.

He acknowledged he had serious concerns about the way Accelerate was managed, but would not elaborate. “It involves personnel issues and I don’t think that’s appropriate to discuss in a newspaper,” he said.

But, whatever other reasons might have prompted Blake to act, sources say the demise of Accelerate boiled down to an issue of control: Critics have long considered it a rogue operation with a loose cannon at the helm.

*

UCI for years has wanted a more wide-ranging program that would make ample use of university resources and faculty, forge strong ties with Orange County’s high-tech business community and help foster a new wave of potential market-leading companies.

Tiffany Haugen, Accelerate’s erstwhile director, strove to distance herself from the university. She concentrated on helping very small, very young firms with uncertain futures and rebuffed as self-serving many of the efforts at collaboration by other groups and businesses.

“Tiffany just didn’t see anything positive about being associated with the university, and she saw it as a tie holding her back in doing better service to her clients,” said one former Accelerate insider.

“The dean and the university saw her as a university employee, and believed she should be looking for opportunities and reflecting well on the university. She just didn’t think that way. She became very outspoken and bitter about trying to work with the university and get things done.”

One former Accelerate counselor said he “wouldn’t even know I was affiliated with the university, except that my check was cut by them.”

*

Throughout her eight-year tenure, Haugen, a tall, striking former model with MBA and law degrees, was a lightning rod for controversy. She battled with UCI, for instance, over its desire to have Accelerate use faculty and students as counselors and advisors, arguing that they had no training in entrepreneurship.

Her frequent absences also raised eyebrows. One former Accelerate insider said Haugen twice took three-month vacations at her second home in Colorado, and spent considerable time working with her husband, a UCI management professor, for the couple’s private investment company.

Well aware of such reports, Haugen hotly denies them. She said she traveled often to drum up investment support and lobby for changes in laws and policies that would benefit Accelerate. Last spring she took a few months off on medical leave, she said.

In recent months, though, Haugen enraged some local businesspeople with her plan to hold an investment conference in Palm Springs instead of Orange County.

Some sources also criticized Haugen’s internal management as unfocused and lacking in strict financial regimens.

“There was little in the way of serious budgetary management,” one former staff member said. “At the end of the year, the expected losses were laid at the feet of the university, and the university was expected to cover it.”

Some sources said they tried to make changes.

Luis Villalobos, a high-tech entrepreneur, left last summer as chairman of Accelerate’s board of advisors. “I went in there, tried to work hard to mend fences and run the program,” he said.

But Villalobos said that Haugen was intent on doing it her way. “I wanted to broaden it. Her focus was on teaching entrepreneurs to write business plans.”

Haugen countered that UCI was more interested in a program that would generate revenue and recognition for university faculty than helping entrepreneurs.

For instance, she said, she resisted pressure to have UCI professors speak at seminars because they expected large fees and she needed to keep costs down for cash-strapped businesspeople.

She characterized UCI’s disapproval of her management as a misinterpretation of the terms of Accelerate’s contract with the state and federal government. Under the Small Business Development Center program, of which Accelerate was a part, resources were to be made available to any developing technology-based business, she said. “We took in all comers under that description.”

*

By all accounts, there was no big blowup between Haugen and Blake that precipitated the closure. They met just a few times, and relations seemed to be cordial at the one Accelerate board meeting that Blake attended, according to others who were present.

Haugen and her camp of loyalists--which includes some former Accelerate staff members and clients--say they had no forewarning of the closure. They say they’re still hopping mad, and have vowed not to let the issue rest.

“I’m looking for answers,” said Fred Willis, a Rolling Hills Estates software entrepreneur who received assistance from Accelerate. Another former client, Hank Blanco of Laguna Niguel, said he’s “outraged” by the closure. “How dare somebody take away something that is very precious to me without saying we’re going to come up with something else?” he said.

Willis and Blanco, who is working on a process to make internal combustion engines more efficient, are trying to organize former Accelerate clients to protest the termination of the program.

As the rumors, faxes and e-mails continue to circulate, Blake lamented in a Christmas Eve memo to GSM students that they’d become immersed in the flap over Accelerate. He wrote that there were valuable lessons to be drawn, including that “it is never helpful nor wise to be dragged down by the actions of others no matter how untoward, inaccurate, or unfair.”

Another was: “Never consider yourself to be bigger than your institution.”

Many sources say they’re still hopeful that something good will come out of Accelerate’s demise.

*

On Wednesday, university officials gathered to organize a task force that will study options for a new business outreach program. In the meantime, Blake said, he has arranged with the state and federal government to continue Accelerate’s services until a new program is started.

Though the government funds will be up for grabs, Blake and other university officials say they haven’t decided yet whether they’ll submit a proposal.

One idea under consideration is to set up an organization structured like UC San Diego’s highly acclaimed Connect. That program is privately funded and serves as a forum for networking and resource-sharing in the region’s high-tech community. It has been credited for helping jump start successful companies such as the digital communications provider Qualcomm Inc.

Blake is also considering a new post at UCI that would act as a concierge, directing businesspeople seeking advice and assistance to the appropriate person.

Of his own conduct, Blake contended: “We have handled this with the dignity and class that I think is appropriate.”

But Denise Arend, who runs the small-business program at the state Trade and Commerce Agency, said, “There’s a bit of egg on a lot of faces that none of us probably wish we had. I wish we’d been able to plan better for all the fallout.”