Startups value Skydeck for views, closeness to Cal

Employees of Go Overseas in the Skydeck startup incubator in Downtown Berkeley. Photo: Hannah Long

Berkeley’s Skydeck, a 10,000-square foot office space in the penthouse of the city’s tallest building, offers stunning views to inspire the 14 startup teams that it houses. Each startup team includes current or recently graduated Cal students, and their projects span from iPhone apps to medical devices to innovative new computer software. Location, it seems, is important for the success of these new businesses, which appreciate the Skydeck facilities and their prime spot in Downtown Berkeley for more than just the great views.

Skydeck, supported by UC Berkeley’s College of Engineering, Haas School of Business, and the Vice Chancellor of Research Office, is part of The Berkeley Startup Cluster. The Cluster’s goal, according to its website, is “to make Downtown Berkeley — a commercial area that is walking distance to the Cal campus — a thriving center for technology-oriented startups and established firms, investors, entrepreneurs and supporting businesses.”

The Skydeck was opened in late 2011 both to provide a natural home for some of the businesses emerging from the university, and as part of the effort to stem the brain drain of entrepreneurial Cal students to San Francisco or Silicon Valley. With other startup-oriented locations in Berkeley, like The Hub and Sandbox Suites, both city and university officials hope that a true, sustainable startup ecosystem emerges. Skydeck has the advantage of firm institutional links with the key departments and schools at the university. Somewhere in the distance is a vision of something as fully formed as Sunnyvale’s Plug and Play Tech Center, but with its own Berkeley spin.

Eliot Sun, founder of the software platform Kloudless and a 2010 graduate of Berkeley, says that he chose to locate in Berkeley because of the amazing opportunities Skydeck is offering to the city’s businesses: “Entrepreneurship in Berkeley used to be really scattered. The Skydeck has been a big initiative to pull together entrepreneurs from across Berkeley.” He adds, “People in Berkeley are starting to become much more entrepreneurial minded. Skydeck is one of the motivations for this movement.”

Sun was inspired to found Kloudless, which provides efficient and easy management of email attachments, by problems he experienced as a student at Cal. “I often found that I couldn’t even compose a new email because there was not enough space in my inbox. I thought that it would be great if I could offload the attachments to free up space while preserving the email.” Kloudless does just that by replacing email attachments with an imbedded link and moving the actual file to another location in the “cloud”, such as Dropbox.

A view of Berkeley’s downtown from the Skydeck. Photo: Tracey Taylor

Another Skydeck startup group, Picatcha, has also set out to solve another annoying software problem. Co-founder Satish Polisetti, who received his Master’s degree from the Berkeley School of Information in 2011, explains that the company’s focus is the captcha, that text box with strange-looking letters used as a security measure by websites. Polisetti believes that the traditional captcha has a few problems: “First, the user experience is very bad, and these captchas are especially hard to solve on a mobile device. Second, they can actually be broken by code quite easily and so do not offer very good security against hackers.” To solve these issues, the Picatcha team has developed image-based captchas, in which a user must answer questions about a series of photos. For example, a user might be given eight photos of bottles and asked to identify which are Coke brand. Both easier to use and harder for spammers to hack, Picatcha’s captchas are now being used on more than 250 websites, including all M&M sweepstake sites.

Many of the startups at Skydeck also appreciate the space for its proximity to UC Berkeley. Sun says, “We really wanted to stay in the Berkeley area so that we could be close to the tremendous pool of talent up at Cal.” Mitch Gordon, a current MBA student at the Haas School and president of the website Go Overseas, adds that the Cal students on his staff are a great asset because they are “smart, eager, and young, with fresh and new ideas.”

Go Overseas is, in Gordon’s words, “the Yelp or TripAdvisor for programs abroad.” The website, which launched two years ago, offers ratings and reviews of abroad programs in five different categories: study, volunteer, work, teach, and gap year abroad. Gordon views the site as a type of social entrepreneurship: “We hope to expose people to new cultures by encouraging them to go abroad. Traveling abroad can be scary, but our website helps make users more confident and comfortable, allowing them to enjoy their experience abroad more deeply.”

Sean Ahrens, a 2009 graduate of Berkeley and co-founder of the Skydeck startup HealthyLabs, also uses the web as a tool for personal connection and support through his site, Crohnology. It is “a Facebook for health,” explains Ahrens, who was diagnosed with Crohn’s disease when he was 12.  Frustrated by the shortage of information available about the disease, he set out to research and test natural treatments and diets. Crohnology developed as a way to share his findings and allows people to connect and share their own health histories and treatments. Just as important, Ahrens says, is the emotional support system the website creates: “It provides connection and validation. People have emailed us saying that they cried when they first found the site because they finally realized that they are not alone and that others are going through similar things as them.”

HealthyLabs, Kloudless, Picatcha, and Go Overseas will all remain at Skydeck through December this year but then must decide whether to stay in Berkeley or relocate. While this decision will depend on where each group can find talent and best promote their product, Berkeley seems like a strong contender. Gordon explained, “Berkeley actually has a huge advantage because in the South Bay and San Francisco there is competition with other companies for talent while here we have direct access to UC students.” Polisetti added, “We graduated from Cal and would not be here without Skydeck and The Berkeley Startup Cluster. We want to stay in Berkeley so that we can give back to Cal and support its students.”

A full list of the current startup teams is on the Skydeck website.

Related:
Skydeck hopes to boost Berkeley-based tech startups [03.01.12]
Berkeley for startups: perfect spot or braindrain in action? [02.09.12]
Skydeck innovation center receives $50,000 boost [07.15.11]

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  • Guest

    Great article. Remember though,”close proximity”
    Contains a redundancy. Does poximity mean closeness or nearness?
    :)

  • http://berkeleyside.com Tracey Taylor

    You’re right of course. Thanks!

  • Bruce Love

    I’d be interested in hearing what more there is to Skydeck than simply sponsoring agency endorsements and visibility in a funding fishbowl (and nice views).   I guess I wonder how to compare it to Y Combinator (a rare success in this area) on a few points.

    For example, “admissions” to Skydeck is done without any equity stake!   That creates two structural problems.  (1) The incentive for admissions judges to make smart, tactical, micro-investments is nearly nil because participation for them is relatively risk-free and upside-free (e.g. compared to Y Combinator).  (2) The program is attractive to entrants who *don’t need it* because participation is, to them, relatively cost free, all upside.  (E.g., I’ve read that one current Skydeck founder put around $200K into his start-up.)

    For investors shopping for start-ups, meanwhile, it’s a mixed bag.   On the one hand the endorsements of admissions judges surely speaks favorably of these individuals and teams.   On the other hand, the structurally limited admissions pool diminishes competition and thus the value of such endorsements.

    There’s talk that Cal might one day want to take an equity stake in hosted firms but that would make things worse, all else remaining equal.   The admissions judges would still have no strong incentive to take tactical risks for big upsides — not compared to a program run by principals of a fund.    It would chase away the best founders who can get a higher return on the equity stake they have to give up.   Investors would be staring, even more than they already are, at the product of one of the highest price pay-to-pitch systems in the world.

    To me it seems like a lot of the right pieces are gathered here — but not put together quite right (yet?).

  • Zelda Bronstein

    Property owned or rented by UC is exempt from property taxes. Skydeck is funded by the university. How much revenue does the City of Berkeley lose from Skydeck? Bear in mind that thanks to the backroom deal brokered by Tom Bates in 2005, Berkeley taxpayers already subsidize the campus use of City services (water, police, fire) worth over $12 million a year.

  • Bruce Love

    Skydeck is funded by the university. How much revenue does the City of Berkeley lose from Skydeck?

    The former tenant was some kind of research partnership between Intel and Cal.   It is a really stunning, high prestige suite — unique in Berkeley.    I don’t think it meaningfully went back on the market after Intel pulled out.     My guess it that the lease has been a university asset for a long time.

  • MFox327

    Why shouldn’t UC be exempt from property taxes? They’re the single largest generator of everything for Berkeley.  Would you like that $12 million to paid for by students? Want to raise tuition again? The UC system is in serious danger of losing its reputation as one of the world’s most preeminent institutions of higher education due to budget cuts. Several of their libraries will be closing soon. They need all the help they can get right now.

  • Anon

    Townies always hate their University.

  • Bruce Love

     

    Why shouldn’t UC be exempt from property taxes?

    Why should the de facto expansion of the Cal campus be funded via a disproportionate burden on Berkeley tax-payers?

  • Bruce Love

     Also, you wrote:

    The UC system is in serious danger of losing its reputation as one of
    the world’s most preeminent institutions of higher education due to
    budget cuts.

    That horse has arguably left the barn.

    Several of their libraries will be closing soon.

    The “operational excellence” plan to shut down those libraries has been temporarily suspended in reaction to faculty outrage, so there may be at least a sliver of hope.

  • Zelda Bronstein

     As a graduate of UC (lifetime member of the California Alumni Association), I also treasure the university’s intellectual and cultural contributions to the city. 

    But what we’re talking about here is not UC the great educational institution but UC the big developer–in deed, the biggest developer in the city. 

    Berkeley has its own fiscal crisis; why should Berkeley taxpayers take responsibility for the State of California’s shameful neglect of UC?

  • Guest

    The solution to the fiscal crisis is more development.

  • Zelda Bronstein

    How so? Many studies have shown that new development generates need for new services that is not covered by the revenue from the new development.

  • Bruce Love

     Zelda, I think “Guest” — some anonymous wanker —  is yanking your chain — in essence, supporting your position.

    Berkeley’s bind is not one that can be cured by development per se.

  • The Sharkey

    Interesting. Was Intel paying property tax when they were leasing the space? Or was the partnership with Cal structured in a way where they could avoid it?

  • hardlyaguest

    Another episode of CatDog!..see:

    http://www.youtube.com/watch?v=_nOk9Fi6gKQ