Pasadena’s tech community has long found itself in the shadow of Silicon Beach. From upstart Snapchat to giants Google, Yahoo and Microsoft, most of the attention-getters in the region’s growing tech sector are clustered on L.A.’s Westside. Meanwhile, as the sun shines on the beachside tech scene, Pasadena has quietly emerged as a hub for tech firms developing business-to-business (B2B) products and services. Why isn’t more attention being paid to the market, which saw more than $100 million in VC investment last year? Let’s face it, Pasadena just isn’t as sexy. The city is hoping to change that, though, with grassroots movements such as Innovate Pasadena that are working to raise the profile of the thriving tech community at the north end of the 110 freeway. Eight Pasadena tech leaders sat down with the Business Journal last month to make their case for why startups and talent should take that city more seriously. The round table included Eric Duyshart, economic development manager at the Pasadena City Manager’s Office; Isaac Garcia, chief executive of Central Desktop; Grant Hosford, chief executive of CodeSpark; Alex Maleki, vice president of business development at Idealab; Brian Nolan, chief executive of SellBrite; Steve Schell, chief executive of New Matter; Harrison Tang, chief executive of Spokeo; and Andy Wilson, chief executive of Rexter and co-founder of Innovate Pasadena.
The most visible players in L.A.’s tech scene are coming out of Santa Monica and Venice. A little bit of Culver City, a little bit of downtown Los Angeles. How would you describe Pasadena’s tech scene?
Wilson: When you look at Pasadena’s companies – and we have a good representation at the table here – they tend to not be consumer media app companies. They’re more B2B, data analytics, education tech and financial tech. We also have a different demographic because startups in Santa Monica tend to be quite a bit younger. When you get to a mobile app, you don’t need to understand domain knowledge or commerce or fulfillment systems. Tinder or Snapchat, those are clever apps but don’t require deep domain knowledge.
How else would you compare Pasadena with Santa Monica and Venice, or the Westside in general?
Hosford: Silicon Beach is cool, but it has significant drawbacks. I saw it firsthand. I was an executive at eHarmony for almost six years, and we moved from Pasadena to Santa Monica a bit under the myth that it was going to be easier to recruit once we got there. Well, guess what happened. First of all, we lost a bunch of great people who lived out here and didn’t want to make the commute. Second, we found some people we wouldn’t have been able to connect with before, but they were, in some cases, much more expensive and frankly more mercenary because they could just as easily work for eHarmony as they could for Google or Snapchat or five other companies doing the same stuff.
So what’s the answer?
Hosford: When you get into the details of hiring and the minutia of what causes someone to join your company, you can actually build a much more dedicated loyal base of employees in Pasadena. People find it’s a really wonderful place to live and you don’t have everyone knocking on the door asking about their resumes every five minutes, which is kind of what happens in the consumer companies in Santa Monica. We just have to do a better job explaining to people what the advantages are.
Pasadena is almost an outlier, not just in the type of tech it produces, but also geographically. Do you still feel plugged in with the greater L.A. tech scene?
Wilson: We’re a bit isolated, but we go to USC and UCLA events.
Maleki: We have world-class institutions across a broad range of industries, whether that’s Caltech, Art Center College of Design, Norton Simon Museum.
Wilson: Pasadena City College has 29,000 students. The on-ramp for entry-level people in technology is headquartered out of PCC.
Maleki: All of that fits within this specific region, which informs people who work here and the companies that start here. … Pasadena has always been this self-contained area where there’s great talent and great companies.
But just because Pasadena has these great education systems, that doesn’t mean students are going to stay after they graduate. What’s recruitment like? How do Pasadena companies attract talent?
Schell: In the last six months, we’ve grown from six people to 15, and we’re still hiring. We can’t find good people fast enough. That being said, a significant fraction of our staff was Caltech grads, including myself. I’ve had – not with New Matter but with previous companies – really good luck hiring people out of Harvey Mudd (College in Claremont). It does benefit us to have those institutions, especially when you’re looking at new college graduates, who are less experienced but highly talented people.
Hosford: For CodeSpark, having the big movie studios nearby is a really interesting source of talent because you’ve got these well-trained, well-educated folks who might be thinking of doing something entrepreneurial but haven’t quite taken the plunge yet. If you can connect with the right people, you can get some really good talent. And, typically, they don’t want to go all the way to the Westside.
But does young talent want to move all the way to Pasadena?
Garcia: We’ve actually brought people in from other places. They haven’t left. Our turnover is very low relative to other places. And the average age in our company is 26. That’s crept up a little bit. It was even younger.
Wilson: That’s average, really?
Garcia: Yeah, average. (To Tang) Your company is young as well, right?
Tang: Yeah, I’m the oldie now. I’ve got kids.
Wilson: With the Gold Line in downtown, if you’re younger, you can actually have a great lifestyle, live downtown and easily get here. I don’t expect there to be flocks of recent grads saying, “I can’t wait to live on Colorado Boulevard,” but I think we’re accessible.
Hosford: The rise of downtown is really interesting because that helps us in both directions. It’s starting to become a real destination. That’s only going to continue. The fact that’s an option for people, that you have the easy commute on the train, is great.
Wilson: I’m a 10-person company, and I’ve got two employees who take the train from downtown. They’re younger and they wanted that lifestyle. I’m, like, “Great, perfect.”
Hosford: You’re not going to sell Pasadena as the hippest place on the planet …
Wilson: What are you saying about Pasadena?! (laughter)
Hosford: … But it is one of the nicest places to live. You’ve got amazing weather. You’re close to everything you need. If you like to travel, you’ve got Burbank Airport, which is more convenient than (Los Angeles International Airport). If you care about that – the all-around quality of life – it’s really tough to beat.
Wilson: We have a family orientation, so for middle-management and senior-management people, Pasadena is a great place to live.
What is the city doing to help startups?
Duyshart: I think we’re not doing as much of the recruitment as we maybe should. Ultimately, once Innovate Pasadena gets some recognition, we can get more aggressive. We’ve been, for the most part, trying to build a quality life, make it a great place to do business and offer a diversity of opportunity. People know about the Jet Propulsion Lab, but we have this whole community of engineers in aerospace and the biology sector. We’ve got Raytheon and even Virgin Galactic in Pasadena, but people don’t know that. It’s also a matter of space and options for real estate, which is something that Pasadena is working on.
Wilson: The city is very involved in Innovate Pasadena. Eric’s on board as a city manager. They played an active role in getting a Cross Campus here. We have a lot of old buildings that aren’t necessarily state of the art, so retrofitting old buildings with fiber-optic Internet is important. There are lots of 1,000- to 2,000-square-foot spaces. But if you need a 10,000- to 30,000-square-foot space, it’ll be the Playhouse Plaza or redoing the AT&T building, which will be a phenomenal place for a 20,000-square-foot space for startups. We’re building all these developments, but there’s no community, no capital and no entrepreneurs. The city can enable, but it’s got to be driven by people who are building businesses. No one wants to build a startup alone because it’s just too frickin’ hard.
What problems or challenges does Pasadena’s tech scene face?
Hosford: PR and community building. We were all in our little silos, and now finally Innovate Pasadena has pulled the lid off that and forced people to get together. It turns out people wanted to get together, but they just didn’t have a great vehicle.
Tang: Pasadena is not in people’s sights as a tech center. We don’t do a good job (promoting it). We don’t even have a cool name for the Pasadena community.
Do you want a name? I mean, people hate “Silicon Beach.”
Wilson: We’ve dismissed a lot of bad names.
Tang: I really love Innovate Pasadena’s initiatives because it’s really the first attempt to try and push the city’s name out. Every company has trouble recruiting tech talent right now, but we were able to grow to 170 people. The No. 1 problem is how do we get the Pasadena name, and to a greater extent, the San Gabriel Valley name, out to engineering talent?
So what’s holding the city back?
Wilson: B2B companies aren’t consumer brand companies. The press doesn’t cover them because the readers don’t know who these companies are. Spokeo is a little easier because you have a consumer-facing product, but Central Desktop …
Garcia: We’re a little below the radar.
You mean that B2B isn’t sexy. It’s not easy to sell in the media like Snapchat. It’s more like, “We’re B2B and we do storage backups!” (laughter)
Wilson: Which is cool stuff!
Nolan: The media tends to focus a lot on companies that are raising money. That’s practically all you read about when there are a lot of other stories about the culture of a company. With B2B, MailChimp has an interesting, funky story. Or ZenDesk.
Tang: I don’t think it’s impossible to make B2B sexy. Box gets a lot of coverage.
Garcia: It also helps when (Marc) Andreessen tweets for you. (laughter)
Tang: The tech community here is smaller than Silicon Valley. If the press can help us talk about what we’re already doing and what we envision for this community, to become a tech hub not just in L.A. but across the United States. …
Wilson: The Box guy who was from USC and moved to NorCal, imagine if we were successful in our vision. Maybe he would have moved from downtown to Pasadena, and at least have tried it here first instead of buying his first ticket to Northern California. It doesn’t mean he would have stayed, but at least we’re trying to create choices for people.
And what made Pasadena a good choice for you?
Schell: I’m a little bit unique around the table. Launching a hardware product in a tech startup is very different than launching a website or software product. There’s a lot of talent here in mechanical engineering, electrical engineering and aerospace, much more so than I can find in Santa Monica. For a lot of those areas, you can’t bring a new grad out of college and have them be proficient. It requires a lot of time to build the expertise. With the family environment around Pasadena and the San Gabriel Valley, it’s a lot easier to find the 30- and 40-year-olds than the 20-year-olds in those fields.
Garcia: For Central Desktop (acquired by Premiere Global Services Inc.), a big bonus was that we didn’t have a West Coast presence, so we’re going to make Pasadena and Los Angeles our global presence for a West Coast company.
Duyshart: Even 3M is making its Pasadena location its national center for research. They’re quietly in a nondescript building in Pasadena, but they’re doubling down on the talent they’re hiring and the space they’re taking on.
Wilson: They just brought several hundred people from ADP (the payroll services provider).
Garcia: We used to poach people from there.
Wilson: We may not be sexy as Snapchat, but we are sexier than ADP. (laughter)
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