Start Me Up

Posted by on Aug 29, 2012 in Blog, News, Uncategorized | No Comments
Start Me Up

 

Pasadena Magazine August 2012 (click here for the original article)

Written by Maria Russo

Collaboration is crucial to the success of Pasadena’s high tech entrepreneurial incubators and angel investors.

Walk into the airy, open-plan offices of idealab, an incubator of early-stage technology companies in Old Pasadena, and you’re greeted by an energized buzz. in some ways the scene is typical of the tech industry: the workers are casually dressed, mostly male and mostly of the geek/hipster persuasion. But this is not one company; it’s a bazaar- like cluster of nine, each with its own programmers and executives.

Toward the back sit five guys who run Punchcard, a mobile app that lets retailers and restaurants send deals and coupons to loyal customers’ phones. In a corner furnished with groovy neon-colored stuffed chairs sits Idealab’s biggest current success story, UberMedia, a 50-employee social media company that makes products includ- ing UberSocial, the world’s most popular Twitter app for your phone.

Everywhere you turn in the office, Idealab’s 300 employees seem almost strangely content – and why shouldn’t they be? Even a smaller company enjoys the camaraderie – and the brainpower – of the larger group. “You can just walk up to anyone and start talking about your latest ideas, technical challenges or even your venture capital pitch,” says Gladys Kong, UberMedia’s Chief Technology Officer. “Not only will no one think you’re crazy, you’ll learn something new.”

And while everyone works hard, when it’s time to take a breather there’s a “bat cave” with sofas and foosball and private rooms to catch a nap or make a phone call. A tray of fresh fruit appears at 3 p.m. every day, and a fleet of bicycles is available if employees need to run an errand, or just get some exercise.

This attention to workplace quality-of-life is part of the vision of Idealab’s founder and CEO, Bill Gross. A Caltech engineering grad, he started Idealab in 1996 with the aim of finding and testing new ideas, then turning the best ones into companies that take up residence. Each one is nurtured and guided – “incubated” – until they are strong enough to fly the coop, going public or being bought by a larger company. Then new companies move in. Idealab provides not just business strategy – and munchies – but essential and otherwise costly office services like accounting and graphic design, and even a workshop for companies that need to build more tangible products like solar panels. To date, the process has spawned over 100 companies. Early suc- cesses include CitySearch, the first online network of local community directories, which went public in 1998, and GoTo.com, which pioneered the concept of paid search that made Google and its ilk possible.

The larger world of technology is taking notice: The Gates Notes, Bill Gates’ personal web site, recently posted a behind-the-scenes video exploring how Idealab is able to so consistently achieve innovation.

“Pasadena,” says Gross, “has been a great boon to Idealab.” The prospect of relocating to a pleasant, livable city has made it easy to recruit people from all over the world. But perhaps the biggest advantage, he says, “has been the talented people we’ve worked with from Caltech, the Jet Propulsion Laboratory, Art Center College of Design and all the other brilliance nearby.”

That’s a message you hear over and over from everyone involved in the local tech scene: The concentration of sheer brainpower in the San Gabriel Valley is, quite simply, astounding. But even geniuses need a little direction when it comes to navigating the real world. “The greater Pasadena area is a hotbed of innovation,” says Mark Lieberman, manager of the Altadena-based Business Technology Center of Los Angeles County, an incubator focused on scientists from area institutions including Caltech and City of Hope Comprehensive Cancer Center. But these scientists, Lieberman says, need help to “commercialize their inventions.” Right now, 25 technology and biotechnology companies are incubating at the center’s offices on Lincoln Avenue, including My Fruity Faces, which encourages healthy eating by making edible stickers kids can put on fruit.

The Business Technology Center shares its office space with the Pasadena Angels, a group of over 100 private investors who pool their resources to invest in and then mentor early-stage companies, with initial investments ranging anywhere from $50,000 to $750,000. These two groups and Idealab often step in to advise each others’ companies. “It’s the wisdom of the crowd,” says Kevin Scanlon, Chairman of the Pasadena Angels. “When an entrepre- neur comes in, there’s always someone in the group who knows that market.”

When it works, it really works: A group of Pasadena Angels recently saw a 2,000-fold return on their investment in Green Dot, based in Monrovia, a re-loadable prepaid credit card company that went public in 2010 in one of the biggest IPOs in Southern California of the past few years.

Gross calls the present moment a “perfect storm of opportunity” for technology companies – with unprecedented “access to capital and talent and the global reach of ideas.” Idealab has begun to supplement the companies that are hatched in-house by taking an equity stake in companies that are started by outside entrepreneurs. The excitement level is especially high around mobile applications, given that there are now almost 1 billion smartphones around the world and an annual 155 percent growth rate for mobile revenues. Should you be tempted to test the entrepreneurial waters yourself, Gross, for one, will offer nothing but encouragement.

“I think it is the single best time in history to start a company,” he says.

 

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