Five steps to make Berkeley a high-tech mecca

Vivek Wadhwa at the Infusion Lunch/Photo: Lance Knobel

Vivek Wadhwa, one of the most outspoken academics on innovation and entrepreneurship, spoke today about how Berkeley could position itself to capture a more than fair share of technology start-ups. “It’s surprisingly easy to fix Berkeley,” Wadhwa declared. “Everything is here.”

Wadhwa was speaking at the Infusion Lunch at Freight & Salvage Coffeehouse, organized by Sylvia Paull. He spoke to an audience of local business owners, entrepreneurs, students and city officials, including Economic Development Manager Michael Caplan with whom he shared the stage. The lunch was hosted by the Berkeley Startup Cluster.

Wadhwa has academic appointments in the School of Information at UC Berkeley, at Duke University’s engineering school, and at Harvard Law School. He writes for both Bloomberg BusinessWeek and TechCrunch and is a prolific tweeter.

Wadhwa said he travels around the world telling countries and regions the exact opposite of what he thinks should be done in Berkeley. What makes Berkeley different, he said, is that it already has an extraordinary reservoir of world-class science and technology talent in the university and Berkeley Lab, as well as proximity to the technology hotbeds of San Francisco and Silicon Valley. “Berkeley is teeming with brilliant people and brilliant professors. It has the culture, the risk takers and the brains — it just needs an epicenter for start-ups like Silicon Valley has,” he said. He also pointed out that Berkeley is diverse and that 52% of start-ups in Silicon Valley were founded by immigrants.

Members of the audience mentioned other ingredients that make Berkeley a natural location for tech start-ups, such as the fact it is bike-friendly and has ample public transit, great restaurants, coffeeshops and accommodation.

Wadhwa had a host of observations on entrepreneurial myths, notably that entrepreneurs are not typically white college dropouts. The average entrepreneur is 39, and there are more entrepreneurs over 50 than under 25. But Wadhwa’s advice for Berkeley can be boiled down to five simple ideas:

  1. Don’t pick winners. Wadhwa said venture capitalists delude themselves that they can pick which technologies and companies will win. Their record in fact is poor. He advocates opening the doors wide because there is no way of knowing what will succeed and what will fail.
  2. Build critical mass fast. Berkeley has “everything”, but it doesn’t have a critical mass of start-up companies. Wadhwa said you should have a space where 100 companies could set up in the next year. Make it free or very low rent. One model that many commenters referred to is Sunnyvale’s Plug and Play Tech Center.
  3. High-speed Internet and networking events go a long way. Many start-up companies don’t need much. Great Internet, other companies around them, and regular parties to meet and mingle with like minds.
  4. Make noise. “You need a gimmick to tell techies that Berkeley is changing.” Do something visible and dramatic and make a splash.
  5. Money will follow. You don’t need local venture capitalists or angels. “VCs are like sharks. If there’s blood in the water — a good idea — they’ll come running.”

Michael Alvarez Cohen from the Berkeley Startup Cluster, who was also on stage with Wadhwa, said entrepreneurs thinking of setting up companies should talk to the Cluster as it is planning to set up a tech-friendly space in Berkeley.

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  • Name Withheld

    Cue negative comments from WEBAIC crowd in five… four… three… two…

  • Bruce Love

    No, @Name. The WEBAIC star chamber was all set to post a series of commentaries about how this piece has precious little or nothing to do with any of the West Berkeley Plan issues but they were scared away by your incisive and biting warning.

  • Name Withheld

    Ah, so start-ups and R&D is acceptable as long as it’s anywhere but West Berkeley. Got it.

  • http://www.tktaylor.com Tracey Taylor

    How about both of you refrain, for once, from jumping into the comments section at the first opportunity to have a go at either one another or a third party?

    You are both free to leave your opinions here. And you do, frequently. Many of your insights are interesting and constructive. (Although we would prefer if you made them under your own names.)

    But Berkeleyside and many of our readers do not like to see the comments section dominated by either one or two voices, or by unnecessary back-biting.

    We have an open forum policy at Berkeleyside as you know and rarely need to remove comments unless they violate our comments policy. Please don’t test us.

  • DC

    Do we absolutely HAVE to start a fresh post with personal sniping? Ay yi yi…

  • http://www.vladislavdavidzon.com Vladislav Davidzon

    An essential element that Berkeley needs is a team in City Hall dedicated to just helping entrepreneurs deal with the city bureaucracy — and to advocate on our behalf in front of city council and other policy-related gatherings.

    The city spends ungodly amounts of money on our rent control lawyers, but we have no one in a similar role who can help business owners jump through city-installed hoops (licenses, etc). It could be a relatively small investment that will result in a huge impact.

  • max

    How refreshing–I agree that there is incredibly great potential for the introduction of businesses and jobs in Berkeley, and the geographic and “people” resources make it so. Thanks for thie article, and thank you Tracy for bringing the discussion back to reality.

  • http://BizDesignDD.blogspot.com RalfLippold

    Open the door for business opportunities.
    Get the conversation into gear about what’s happening in the area.
    Create value (even prototypes and small changes, such as Barcamps, make a difference)
    Awareness grows.
    Investors follow suit.
    Economic value creation results in economic wealth.
    …. staying on this perpetual circle :-)

    Thanks Vivek

  • Alan Tobey

    When I worked for multiple Berkeley startups from the late 70s to the late 90s, city staff and councilmembers we talked to were only interested in whether we’d immediately be producing lots of sales tax revenue or building a taxable property. The most positive comment I ever heard was, essentially, “come back when you have 30 or 40 employees and maybe you can join the Chamber of Commerce.” Glad so see times have changed a bit.

    So in downtown we may have a chance to do it better by just providing affordable spaces to bright risk-takers with less tall barriers like needing to qualify for a multi-year lease. Let’s try for almost no “Berkeley process” this time by qualifying multiuser spaces.

    We should also recognize that the outcome in West Berkeley will be different, where we are perpetuating — for some good reasons — a deliberate industrial policy to protect existing manufacturing zones from open competition. Only in zones now housing warehousing and wholesaling businesses will “additional uses” be allowed — primarily R&D — without a need to “pick winners.”

    What could kill this promising initiative? Too much “house-to-house fighting” over the entitlement of specific projects — why take years in Berkeley to do what can happen in days in Emeryville? Uber-NIMBY Becky O’Malley showed during the BSC session that she plans to continue her personal war against “real estate speculators,” the root of all evil in town because they build needed buildings– amounting to a negative industrial policy that no change is the best plan.

    BSC is now properly idealistic, but some contentious politics still lie ahead. With some big-picture thinking this can still work out well.

  • Bill

    Thank you Tracey.

  • CJ Higley

    I don’t know if commenting on a local news blog qualifies as the type of gimmick Mr. Wadhwa describes in the article above, but for what it’s worth, I’d like to add my voice to the growing chorus of people who hope and believe that Berkeley is changing. There will always be a certain element in Berkeley that dismisses entrepreneurial enterprise as tainted and low-brow, and those engaged in supporting it as greedy Babbitts. To the rest of us, I say, let’s experiment, learn and create!

  • Kendo

    “We have an open forum policy at Berkeleyside as you know and rarely need to remove comments unless they violate our comments policy. Please don’t test us.”

    @Tracy

    Please do not threaten commentors for their well informed opinions. The number of posts were not excessive nor did they warrant moderation (except perhaps those of “Name Withheld”). If you want to go after someone abusive consider warning the astroturfers, one of whom also posted to this thread, who consistently read like a paid advertisement for real-estate developers.

  • Daniel M.

    Individuals from both sides of the West Berkeley debate accuse the other side of “astroturfing” and comments from both sides read the same way.

    Either both sides are doing it, or neither is.

  • http://www.berkeleyside.com Lance Knobel

    Kendo: this thread has been very constructive. What Tracey was reacting to was the instant posting by two of our regular commenters, who sometimes dominate a thread with comments directed largely at each other. That’s what we’re trying to avoid. It seems to have worked in this case.

    As everyone involved in online communities knows, maintaining a civil, constructive atmosphere in comments is a constant struggle. We love our commenters and are convinced a large part of the value in Berkeleyside comes from them. But that doesn’t happen by magic. It takes work on our part.

  • Bruce Love

    For what it is worth, I don’t think that Berkeleyside’s policy making here is either exactly right or exactly wrong. I accept the admonishment, fine. I think it’s not so great that Berkeleyside is uncritical of stuff like the gratuitous and non-sequttor trolling against WEBAIC that prompted me to reply. I think I agree that my snarky reply wasn’t helpful.

    Vivek Wadhwa is kind of interesting. He shows up a bunch in the trade press. Some of the ideas he seems to be talking about in those 5 steps sound very much like a reformulation of things Paul Graham has been saying for a while (although Wadhwa does some sociological research where Graham is more from an investor perspective).

    Good connectivity, parties, low or free rent, and hype with a nearby university are a kind of formula that gets things liked by certain VCs going — but those factors don’t really do a lot directly for local economic development and they sure as heck don’t have anything much to do with what the West Berkeley Plan changes propose. Silicon Valley (and for that matter LBNL) we ought to remember really grew like they did first and foremost because of cold war federal government spending of a sort that congress is currently talking about cutting way back. DOE national labs may be facing an 18% cut if the House has its way.

    Here’s a formula that I think would come closer to fitting what Wadhwa and similar talking folks are describing:

    Private investment downtown and in marketing to set up office space, great connectivity, some reserved housing for transient entrepreneurs and venues for the entrepreneurs and VCs to mingle a bit…… combined with light manufacturing support in west berkeley. For software start-ups, there’s plenty of room for office space all around town and rents are the main issue – west berkeley isn’t all that relevant and, no, the city isn’t putting up any serious obstacles. For startups that “make stuff” — filling in vacant parts of west berkeley with flexible fab labs to do the first small trial product runs of products would be an example of “doing something dramatic” that would attract attention and that harmonizes well with what the region has to offer. West Berkeley is just the right scale and situation.

    An example of what Wadhwa is advising against (trying to “pick winners”) would be to adjust zoning to to help Wareham or similar folks build out a very small number of expensive wet labs and such in a Bay Area market where local vacancy rates in that area are very low but region wide are fairly high and climbing. It’s great for the developers who make bank but, for the city, its the opportunity costs on that land and the strange doubling down on a use for which the Bay Area is already over-supplied.

  • Daniel M.

    Since they specifically said “both,” think it was clear that the editors of Berkeleyside were referring to each of you equally.

  • Alan Tobey

    Bruce, your “helpful examples” continue to read as transparently self-serving.

    Startups that are ready to make stuff including your personal-interest 3D printing business don’t need any zoning changes to site today in West Berkeley’s existing small-manufacturing zones that weren’t built out by Wareham. On the other hand, opening up existing warehousing zones to the additional R&D use does not pick winners or do favors for particular industries — the change doesn’t favor wet-lab benches over software cubicles, or algae over 3D fab research.

    You’ll just need to compete fairly on an even playing field, hopefully without whining about it.

  • Bruce Love

    Alan,you guess incorrectly at my biases and stake, sorry. I gather that your biases and stake relate to your board position with “Livable Berkeley”, right?

  • Alan Tobey

    Bruce, I suppose you considered that “revealing” my volunteer Livable Berkeley involvement would be a stingingly effective ad hominem attack that has no possible riposte. You’re half right – not worth answering.

  • Bruce Love

    No, Alan, that’s not the point at all. I asked because Livable Berkeley has some position papers that I think spell out the position you are advocating here — but I thought I would ask rather assume.

  • Daniel M.

    The cyber-stalking being done by this “Bruce Love” character is a bit disconcerting. No wonder he uses a false name.

  • Jake Butler

    I went to school at UC Berkeley and worked at a startup that was given space in the basement of the Bancroft Hotel right across the street from campus. We received the space as a reward for winning a business plan competition.

    I cannot stress how important it was to have a location right across the street from campus where students could come to work for a few hours between classes without having to commute to the city.

    The startup incubator model has been growing, and now even the White House is backing a national plan. I think something similar to this in downtown Berkeley would really kick things off on the right foot.

  • Vbkley

    Ah yes how do we overcome the Great Wall of Berkeley?  You know the Wall that has stopped Sun, Linux, Medical Radioisotopes, the manhattan Project, Andy Grove and most of the key people in Silicon Valley, Genentech, Intel, Apple, Inktomi, Google and not to mention RAVE (which overcame a major barrier to Moore’s Law).  All of these companies started in Berkeley or were founded/run by Berkeley people.

    Of course there is no Berkeley wall and we commonly move anywhere within the Bay Area as necessary to do the business of starting up. The simple fact is that Berkeley is tiny and a great idea needs room to grow.  Leaving Berkeley is inevitable.

    Our friend Wadhwa talk is interesting but the problem (except for city revenues) does not exist.

    Strangely enough though my business was driven out of Berkeley because I am an inventor. Of course an inventor can invent anything and so my neighbors were scared.  Now inventing is like banking if you invent to spin out businesses under license then in the end its just a matter of collecting royalty.  This city kissed that royalty income goodbye by refusing me a business license.  No one said everyone in Berkeley was intelligent.