With millions of dollars in venture capital, favorable national press and industry accolades, Cyrano Sciences Inc. has everything a tech start-up could want.
Make that almost everything. After more than a year of searching, Cyrano has not yet found a crack chief executive to sit at its helm.
Company officials explain the problem in three words location, location, location. Cyrano is in Pasadena, not Silicon Valley.
“No one involved wants to see the company leave Pasadena, but no potential CEO we approached has so far been willing to leave Silicon Valley for L.A.,” said Seth Harrison, Cyrano’s acting president and general partner at Oak Investment Partners, one of the company’s investors.
“This has been more of an issue than for any other start-up we’ve handled, and the CEO search has taken longer than anyone expected due to our location,” he said.
Founded in April 1997, Cyrano hopes to market a mechanical nose that uses sensors to sniff out everything from gas leaks and chemical spills to land minds and certain diseases. The company, which takes its name from literary figure Cyrano de Bergerac, was created to commercially develop the nose, which was invented by Nate Lewis, a chemistry professor at the California Institute of Technology in Pasadena.
Harrison doesn’t want Cyrano to leave Pasadena, citing the company’s Cal Tech connection, as well as personal ties its employees have to the area. For its part, Cal Tech doesn’t want to see the company leave Pasadena either.
Of the 30 or so firms like Cyrano that have been incubated by Cal Tech, only about 10 have stayed in the area, said Larry Gilbert, Cal Tech’s director of technology transfer, who oversaw Cyrano’s patents.
“We want to see our spin-off companies grow locally in order to create more employment opportunities, to help generate a nucleus of technology companies, and to create a sense of identity for the tech industry in L.A.,” Gilbert said. “L.A. does have a growing technology industry, but it is too diffuse. Without a coherent sense of identity, we are going to have trouble building a reputation as a center for the industry. Until that happens, it is very hard to get the highly qualified, top management types from Silicon Valley to come down here.”
Gilbert’s comments about Silicon Valley players resonate throughout the industry.
“There is no doubt that much of the high-tech industry, from CEOs down the ranks, clearly believe that if they are going to be in the industry they have to be in the (Silicon) Valley,” said Steve Tedesco, president of the San Jose/Silicon Valley Chamber of Commerce. “Frankly, I don’t hear people up here talking about Los Angeles that much. I’d get my money back from the people who developed the name ‘Tech Coast.’ ”
When they do talk about Los Angeles, it is usually in a negative context despite Silicon Valley’s own problems, including skyrocketing real estate prices, traffic tie-ups and recent layoff announcements.
Ken Leonard, vice president of Amdahl Corp., a Sunnyvale-based “computing solutions” company, said he has been approached several times to take positions in Los Angeles and elsewhere.
“But I’m not interested in leaving the area,” said Leonard, a 25-year Silicon Valley resident. “We have a better quality of life on the job and at home here. The excitement, the ideas, the creativity in the tech industry are here.”
Tom Skornia, a San Jose-based lawyer who specializes in tech start-ups, said he has worked with executives who want to come into the area, but rarely if ever with those who want to go the reverse direction.
“Silicon Valley may not be the only tech center, but boy, is it the best,” Skornia said. “It’s not so much that we feel superior to other areas like L.A., we just don’t pay attention to them.”
There can be more complex reasons behind executives’ aversion to Los Angeles, according to Juliet Flint, managing director of high-tech executive search firm Ramsey/Beirne Associates.
“CEOs are more willing to take a risk on a start-up in Silicon Valley since they know they are in the hottest high-tech job market, meaning they can pick themselves up and start again without a problem,” Flint said.
Leonard agreed, saying that in Silicon Valley, failed start-ups signal that an executive has more experience rather than showing a lack of talent. One of his friends just started his fourth start-up there after the first three failed.
The good news is that Cyrano’s quest for a chief executive should be coming to a close. If all goes well, Harrison said that the company would announce a new head as early as next month. Because negotiations are not finalized, Harrison would not give any details about where the CEO is coming from or if the company will relocate.
“This has taken far too long and the difficulty regarding location has been significant, but we just about have it,” he said. “We’re very close to finalizing the search.”
