What makes a city a magnet for startups? Why do entrepreneurs and financiers flock to the South Bay even though there are so few good places to eat there? Does Berkeley want to be Silicon Valley anyway? (You can guess the answer to that one.) Maybe Berkeley is just not hip enough to attract young talent? Does the city’s red tape makes it too cumbersome to be innovative? And, perhaps most significantly, is there just too much distrust of businesses as they thrive and grow? Perhaps Berkeley should focus on what it already does well: incubating startups then allowing them to fly to pastures new, be that San Francisco or Palo Alto.
All these questions were raised and debated at Berkeleyside’s Startup Berkeley Local Business Forum, last night in downtown Berkeley. An estimated 220 people gathered at the Freight & Salvage to listen and engage directly with two sets of panelists, and to discuss the issues among themselves both before and after the program.
[...View a Photo Gallery of the Startup Berkeley Forum, with photographs taken by Berkeleyside contributing photographer Nancy Rubin...]
For Judith Iglehart, a former executive of Keiretsu Forum and recently appointed Chief of Staff to Berkeley Mayor Tom Bates, the intellectual curiosity of Berkeley will always win out over the “warm happy glow of money” represented by Silicon Valley.
Silicon Valley was just apricot orchards until Regis McKenna arrived, Iglehart said. [McKenna was the marketing guru some say "created" the idea of Silicon Valley.]
“You were in a special place because they told you so. We can do that here,” she said. “There are ideas tumbling down the hill from the Lab and from UC Berkeley every single day.”
Iglehart also pointed out that although the lure of the Valley is often said to be the venture capitalists that congregate there, startups are 67,000 times more likely to be financed by angel investors than VCs and “Cal is jam-packed with angel groups”.
As far as Rauly Butler, senior vice president of retail banking at Mechanics Bank is concerned, Berkeley is unparalleled as a location for businesses. Citing pioneering entrepreneur Alfred Peet as an example, he said: “There is no better place than Berkeley for collaboration — be it networking at the coffee shop, at a restaurant or when strolling down Solano Avenue.”
Andre Marquis, director of the Lester Center for Entrepreneurship at Haas Business School, was equally positive about the city’s sense of community, which, he said, was the key ingredient for a successful startup. Marquis, who launched three startups before taking up his post in academia, said he had seen a lot of progress in terms of Berkeley as locus for entrepreneurs since he was a student at Cal. “I feel a change,” he said. “Students come here to be part of the Bay Area.”
Members of the audience were quick to pierce the bubble of optimism, however. A current Cal student said it was difficult to see the attraction of staying in Berkeley when all his friends had moved to San Francisco or Silicon Valley.
Don Loeb echoed his view. “Young people want to be in San Francisco,” he said. He added that there is a lack of landmark companies in Berkeley, such as Google on the Peninsula or Zynga and Twitter in San Francisco. “Apart from Pixar, in Emeryville, we don’t have enough large companies to attract others,” he said.
Even Butler had to agree that San Francisco sounded “sexier” than Berkeley — and the consensus in the room was that a few more good bars would not go amiss here.
However, speaking on the second panel, comprising four business owners in Berkeley, Kalimah Priforce, who moved from Brooklyn to Berkeley, said there was a lot to be said for Berkeley, not least its proximity to Oakland. The founder of Qeyno Labs, which creates a virtual career day for schools in underserved communities, said: “And there’s nothing like East Bay girls!”
Speaking seriously, Priforce pointed out that Berkeley startups had the opportunity of developing East Bay “native talent”, including hiring dynamic young people from East Oakland and boosting the local economy.
Both Will Wright, creator of The Sims and founder of Berkeley-based Stupid Fun Club, and June Taylor, founder of The Still Room on Fourth Street, outlined some of the hurdles they had encountered with city bureaucracy when setting up their businesses.
For Wright it was as basic as securing a business license for his startup which spans software development and light industry. “There was no zoning category for that and the city was not interested in solving the problem,” he said. It was a seamless, more transparent process in Walnut Creek and Emeryville in comparison, he said.
Taylor spoke of the difficulties of bearing fixed costs such as health processing and licenses for food-related artisanal “microbusinesses” such as hers. She also stressed the need for the city to recognize the asset it has in the plethora of small, passion-fueled food entrepreneurs who have set up shop here. “Berkeley must encourage and capitalize on this,” she said.
David Hyman, founder of streaming music service MOG, which is headquartered on Seventh Street, expressed concern about Berkeley’s “anti-capitalist bent”. Addressing the issue of zoning in west Berkeley, and the restrictions on what types of businesses can move into the light industrial spaces there, he asked why a company such as his should not be viewed as creative and “artisanal”. “If you make something out of ones and zeros you can’t get into one of those spaces,” he complained.
Hyman added that he has been turned down by engineers who didn’t want to come to Berkeley, but, once he has convinced employees to move, here they appreciate the city’s virtues. “You can get brilliant people here and you have them excited that they can ride their bikes to work.”
What was clear is that there’s a hunger for more gatherings where business owners and city officials, business students and budding entrepreneurs can come together and take these questions to the next level — formulating concrete steps to both bring and retain businesses right here in Berkeley.
Key take-aways from Startup Berkeley:
- Berkeley needs better transit options: an equivalent to Emeryville’s Emery-Go-Round, for instance, and more options for Bay Bridge commuters.
- What Berkeley does really well is social enterprise, and it could focus more on this.
- Berkeley has proved it’s a good place to start a business. “It would be better poised if it embraced what we’ve got. Why not focus on initiation?” [Ayori Selassie, a co-founder of Pitch Mixer with Kalimah Priforce.]
- Berkeley is a city with an aging population and gentrifying neighborhoods. This, and corresponding higher rents, doesn’t help it attract young people.
- More work needs to be done to open up connections between the city and the university. “This is real talk: UC Berkeley and the public side of the city are not that connected.” [Kalimah Priforce]. Perhaps a rejuvenation of Telegraph Avenue could be part of a rapprochement?
- Berkeley’s diversity is a huge bonus. Twenty percent of residents are foreign-born. “We can be diverse, but we don’t need to be dirty.” [John Caner, head of Downtown Berkeley Association which is implementing a big clean-up campaign.]
View a Photo Gallery of the Startup Berkeley Forum, with photographs taken by Berkeleyside contributing photographer Nancy Rubin.
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