Is San Diego the next tech hub? Could it be even better?
The rise of Silicon Valley can be seen as one masterful convergence. If Stanford University was the gas fueling the tech industry, its alumni were the ones pushing the pedal—and they were doing so right next to campus. The stories are those of the quintessential tech startup: William Hewlett and David Packard—the eponymous duo behind HP—were Stanford graduates who began in a Palo Alto garage; Jerry Yang and David Filo founded Yahoo! after graduating; and Sergey Brin and Larry Page developed Google’s page rank algorithm as graduate students. It was the silicon in transistors that made the name, and ever since, the valley in question has been a stronghold for both established companies and every eager tech upstart hoping to break into an already crowded space.
San Diego doesn’t necessarily have much silicon to speak of, but start comparing notes and the question begs to be asked. UC San Diego is fast feeding the talent in technology industries, Chancellor Pradeep K. Khosla has encouraged faculty and alumni to go forth and make innovative businesses, and companies like Qualcomm and Cymer, Inc. lend a firm footing for the region’s next generation.
So, could San Diego be the next Silicon Valley? Or is it in another league altogether?
Location, Location, Location
Paul Martini, CEO and co-founder of iboss Cybersecurity with his brother Peter, made recent headlines by canceling the company’s planned move to Austin, Texas—another up-and-coming city for tech talent. Rather than move iboss, which builds and markets hardware and cloud-based technology to enhance network security against cyberattack, the brothers made the conscious decision to grow their business in San Diego. For Martini, the choice was largely based on recruiting new employees—they plan to more than double their current workforce, and San Diego provided more than enough talent to anchor the company.
But there was another factor as well, one made plain by the company’s purchase of the recently vacated Science Applications International Corporation (SAIC) data center in La Jolla, overlooking Interstate 5 and, not coincidentally, Martini’s alma mater.
“More important for us was being strategically positioned next to UC San Diego,” Martini says. “Look at the way UCSD is such a research-oriented university. It causes students to be very creative as well as analytical. It’s teaching how to be more progressive in the way [students] think about solving a problem. In our space, dealing with cyber warfare, you’re basically a researcher every single day.”
Look at the way UCSD is such a research-oriented university. It causes students to be very creative as well as analytical.Paul Martini, ’01
As an undergraduate, Martini was entrenched in the collaborative atmosphere that continues at his company today. In fact, a lasting relationship with lecturer Gary Gillespie of the Jacobs School of Engineering has shaped iboss profoundly, as Gillespie is repeatedly cited as the prime connector for several UC San Diego alumni employees at the company.
“When we started, we started in San Diego, and as we grow, we grow our bond to this city,” Martini says. “We’re strategically positioned here, and we’re creating a facility not just for iboss and the people who make up iboss today, but also for the people who will make it up in the future, which will include a lot from UC San Diego.”
Setting Up Shop
Community partners like the San Diego Regional Economic Development Corporation (EDC) are also working hard to promote the region as an established as well as up-and-coming location to successfully headquarter any number of businesses. For Rady School of Management alumna Ashley Van Zeeland, ’12—whose company, Cypher Genomics, is touted as revolutionizing human health through genome interpretation—a big step in expanding her business was the EDC’s MetroConnect prize, an award to help companies boost international business while keeping a solid footing in San Diego. As CEO, Van Zeeland finds that footing is crucial to her company’s success.
“This has been the absolutely best place to launch Cypher Genomics, and not just because we developed the initial technology here,” Van Zeeland says, calling the region the “epicenter of genomics” given the proximity to other genome-focused companies like Illumina and Thermo Fisher Scientific, Inc. As with most, Van Zeeland and her team were often asked if they were going to relocate to the Bay Area. But given that their work is based on “deep scientific understanding” of biology and genomics, it makes sense for them to remain in San Diego where this sort of scientific innovation occurs every day.
Van Zeeland also acknowledges the power of UC San Diego, particularly with regard to her time at the Rady School and its supportive, driving culture. She refined the idea of Cypher Genomics throughout her M.B.A. experience, in courses like the school’s signature Lab to Market courses, a training ground where business ideas are nurtured and directed into real opportunities. Such a practical curriculum has led to over 80 student- and alumni-founded companies coming from the Rady School, and last year alone these companies contributed an estimated $2 billion to the regional economy.
In addition to the Lab to Market course series, Van Zeeland took advantage of one of the Rady School’s business accelerators, mystartupXX, which specifically promotes and supports female entrepreneurs with startup funding opportunities.
“I welcomed the opportunity to join a community of like-minded women,” says Van Zeeland. “Female founders account for less than 20 percent of high-growth startups, so the mystartupXX mentors were a great sounding board in those early days. I learned how to transition from academia to the startup world, and weather the lumps and bumps along the way.”
Innovation in our DNA
“Nurturing innovation is vital to the future of our research enterprise,” said Chancellor Khosla, announcing the recent hire of Paul Roben as associate vice chancellor for Innovation and Technology Commercialization, a new division to promote commercializing new technology, including the creation of startups. Roben, formerly the director of office technology development at the Salk Institute, credits UC San Diego for creating the regional biotech boom through a number of “wildly successful” companies like Cypher Genomics.
Yet UC San Diego isn’t just getting into the startup world now—it has been supporting innovation and entrepreneurship for decades. The university’s Technology Transfer Office (TTO) just surpassed 20 years as the promoter and facilitator of campus intellectual property to the greater community. At the recent TTO anniversary celebration, Vice Chancellor for Research Sandra Brown called the TTO the place where science is transferred to serve the public, a way of “assisting the innovators and entrepreneurs on campus” by linking them to the greater region. The event was attended by alumni and community leaders across all fields, including San Diego Mayor Kevin Faulconer, who said the city would not be what it is without UC San Diego. As of a January 2015 report, UC San Diego alumni and faculty have launched over 300 startups, garnering nearly $32.7 billion in annual sales.
A good portion of that figure can be attributed to Qualcomm, Inc., arguably the largest business in the region with a historical connection to the university. In his introduction of the Qualcomm founder, Irwin Jacobs, Chancellor Khosla noted how the telecom icon started out as a UC San Diego engineering professor with breakthrough ideas about wireless technology. Jacobs remains closely involved with UC San Diego as a benefactor, mentor and partner, investing in at least seven companies directly from the university.
“I congratulate all of you in the Technology Transfer Office,” Jacobs said in his address at the TTO anniversary event. “The first 20 years of technology transfer have obviously been successful, allowing many companies to start up and bring back benefits to the university. I suspect the next 20 years are going to be even more spectacular.”
The Boon Over the Border
If technology is no longer limited to Silicon Valley, then the innovation community in San Diego can no longer be bound by its borders. San Diego’s most unique advantage is its location, where industry can be aided by cross-border interchange.
Melissa Floca, interim director of UC San Diego’s Center for U.S.-Mexican Studies (USMEX), based at the School of Global Policy and Strategy, says the border adds value that no other entity can. And it’s not about “offshoring” or “nearshoring,” but rather embracing a new regional focus.
“The growth of these industries fuels investment and exports, and is supported by the talent coming out of our universities on both sides of the border,” Floca says. “What differentiates us is our drive to invent and manufacture across the entire region, and our comparative advantage is tied to the highly developed industrial complex just across the border.”
Floca sees USMEX as helping the binational region have clout on the global scale. In addition to housing one of the nation’s largest residential fellowship programs with specific research on Mexico, USMEX partners with the Urban Studies and Planning Program for Frontera Fridays, bringing policy makers and business leaders to the same table in order to understand the connection between the two regional powers, San Diego and Tijuana. USMEX organizes an annual large-scale symposium on relevant issues for both countries, called Mexico Moving Forward.
“We often lack a fact base on issues like the importance of cross-border industries, the binational student population and shared environmental challenges,” says Floca. “USMEX routinely engages in research that contributes to the regional policy dialogue, and helps define the narrative about who we are as a region and what challenges and opportunities we face.”