Collectively, and thanks to the Metro Chamber’s 42nd annual Cap to Cap trip (largest of its kind in the nation, as Roger Niello says often!), this group of 287 has held 202 meetings in three days, discussing 130 different issues relevant to 14 different teams. SARTA plays a leading role at Cap to Cap, where I serve as a co-lead (with Greenwise’s Julia Burrows) of the Clean/Green team, and Board member Cary Adams co-leads (with Ann Madden Rice from UC Davis Health System) the Healthcare and Biosciences team.

In my not-extensive (e.g. three year’s) experience, Cap to Cap is about three things, primarily:

First, coming together as a region to advocate collectively for a broad range of issues that may primarily benefit specific communities within the region, but collectively benefit us all. The process of identifying those issues and then drafting the “issues papers” that constitute our formal platform is a months-long effort. The shared will expressed in meetings over the three days in DC makes the collaborative effort tangible — and we are often told that few other regions present themselves with such partnership as we do.

Second, championing Sacramento and our accomplishments well beyond our region, to elected officials, congressional staff, think tanks, and federal agencies. Speaking from my own experience in meetings this week, Sacramentans highlighted Next Economy; our 450+ tech companies; our unemployment challenges; the strengths of our universities; SMUD’s efforts to link its R&D work with local clean tech companies; local companies SynapSense, Clean World Partners, the Renewable Energy Test Center, Davis Roots and RCS Technology; the importance of energy retrofit financing programs for residential customers; Greenwise; and the different needs of high growth companies vs small businesses — to name only a few.

These discussions were with the White House Jobs Council; USDA; Representatives Lungren, Matsui, and staff in McClintock’s office; the SBA (three meetings with six different people); the Department of Defense and Department of Energy; Brookings Institution; Electric Power Research Institute; Senator Boxer’s staff; Lockheed Martin; Council on Environmental Quality; the House Financial Services Committee staff — again to name just a few.

And third, Cap to Cap is an unprecedented chance to spend significant time with a broad range of our region’s most committed, knowledgeable, and involved business leadership, as well as a strong contingent of local elected officials. For five days we live in the same hotel, race between meetings, complain of the cold rain or our blistered feet, eat at least two meals a day together, and stand (organized by height) for the delegation photo. Sometimes we even go out in the evening after the formal functions end. Through all of this, there are plenty of chances for conversations. And plenty of conversations occur. Truly, only once the plane has taken off for the return to SMF does the volume drop to a dull roar, and then only after people apologize to seatmates for needing some work time, quiet time, or (even) sleep.

All three of these – advocating jointly for regional benefit, championing Sacramento’s accomplishments to those who might otherwise not hear of them, and strengthening regional relationships – serve our region well.  Cap to Cap is fast-moving, busy, and tiring – but definitely worth the investment of time and effort.

Plus, if you carry a guitar home on your back while declaring (truthfully) that you do not know how to play it, it makes all 285+ people either a) laugh or b) look at you funny. Or both.

The latest hard evidence of that is found in a report issued last month from tech search firm Dice Holdings, Inc. that showed Sacramento ranking #4 nationally for “Fastest Growing Cities for Technology Jobs,” with 37% tech job growth over the past year.

As the report pointed out, “From north to south, California has more to offer tech professionals than just Silicon Valley.  In Sacramento, firms in healthcare and technology are hiring and tech paychecks have jumped six percent year-to-year to $87,000 on average.”

Who would’ve thought that we’re doing that well on a national scale?  Probably not even some who are directly involved in our regional tech sector.

Raleigh, N.C., Richmond, Va. and Houston are the top three, by the way, with Kansas City, Portland, Ore., St. Louis, San Diego (the only other California region on the list), Boston and Denver rounding out the top ten.

What this report demonstrates is that we’re clearly doing some things right here and that tech continues to have high potential to become an even more important part of our overall regional economy.

Obviously we see SARTA playing a key role in that process.  The fact that our area is achieving one the nation’s highest tech employment growth rates give us an additional boost to work even harder on our own and as part of regional efforts such as the Next Economy to identify and exploit opportunities to achieve even better results.

One of SARTA’s key goals is to help Sacramento become a nationally recognized center of technological innovation.  Certainly this recognition helps in that regard.

But we need to be sure to further take advantage of our region’s advantages – university relationships, a deep talent pool, affordability, great recreation and proximity to Silicon Valley as the center of the tech universe – to continue this positive trend.

We’re confident we will and am excited to be a part of it.

Mark Randall is a serial entrepreneur, investor and Chief Strategist at Adobe. His career conceiving, designing and marketing innovative technology spans nearly twenty years and three successful high-tech start-ups. He has fielded over a dozen world-class products which combined have sold over a million units, generated over $100 million in sales and won a total of 15 Products of the Year, 12 Best of NAB, 7 Best of Comdex, 2 PC Magazine Technical Excellence awards, and one Emmy award.

There are not many as well accomplished as Mark.  We’re delighted to have him involved with SARTA and happy to have him in our own backyard– he resides right up the 50 corridor in Folsom. This month, Mark will present a SARTA seminar on disruptive methods of starting companies (see Lean Startups: Radical New Ways to Build Your Business Faster and Stronger). While prepping for that, he shared his thoughts with us about Sacramento’s entrepreneurial ecosystem, how it’s progressed over the years, and what is to come.  We’re pleased to share those thoughts with you in Mark’s guest blog post.

Posted by Guest Blogger, Mark Randall, serial entrepreneur, investor and Chief Strategist at Adobe

So this blog post offers two crazy ideas. While there are lots of other crazy ideas out there that are worth exploring, I was the one writing this blog post at midnight, so I got to choose. Let us know what you think about these, and also what your own crazy ideas are, too!

But first let’s talk about challenges.  Currently, I’m convinced that we must address two significant challenges in order to have innovation truly thrive — both of which were the subject of passionate discussion among tech company CEOs at the TechTalent Roundtables that SARTA convened in early February.  Our first challenge is that our region’s culture is unproductively risk-averse. And our second challenge is that our 450+ tech sector companies are spread too thinly on the ground of our geographically large region.

First, about a risk-averse culture. Also at INNOVATE, Mark Otero stood up and told us all that he had failed thirty times at KlickNation before their first success. That’s a lot of failure, but they were definitely pretty productive.  They weren’t fun, certainly, since no one likes to fail.  But they were productive, because Mark and his team learned how to create games that didn’t fail.  They learned the value of persistence.  They learned how to take significant risks to pursue their dreams.  And then they succeeded.  That’s an accomplishment worth celebrating.

So, crazy idea #1: how about an award for the Most Productive Failure?  Or our own FailCon.  Celebrating not the act of failing itself, but the act of trying in the first place, and then trying again using the tangible lessons learned.  At first glance that sounds like it could be a real downer.  But I suspect it would be the opposite – a high-energy, informative, infectious, genuine, and possibly unintentionally funny day.

Second, about being spread too thinly.  We have more than 450 tech companies in our region. (I’m going to say that a lot this year, so brace yourselves.)  But still the tech sector – including med tech and clean tech companies – is little recognized.  Not visible.  Not able to break through the image we, and others, have of ourselves as either a government town or a cow town. And, critically, not able to create much of a “tech culture.”

This affects how investors think of the region (or don’t); it affects how employment candidates either here or being recruited to move here think of us (or don’t); and it puts a “damper effect” on the overall creative give-and-take that innovative companies require.

And SARTA is already working on this challenge.  Our “virtual accelerator” programs seek to overcome that.  We offer one-on-one mentoring via VentureStart.  We provide peer-based CEO Forums.  We convene the community through events such as INNOVATE. We organize the educationally rich Leadership Series. Workshops.  We talk to the media about our tech companies as much as (and sometimes more than) they’ll tolerate.  And this is all important and useful.  But not sufficient.

So, crazy idea #2: let’s pursue not just virtual accelerators but real, physical ones too.  Let’s partner across the region with a network of four or five physical accelerators, each with a specific cluster focus. The function these serve is to create the necessary critical mass in each cluster, convene like-minded innovators, and make the work and the companies doing the work more visible.  As companies succeed and grow, they’ll move out, choosing their own locations and expanding the network.  Maybe they’ll stay nearby, or maybe they’ll move some distance away.  But the hub will exist, and the growth of the network will become much more organic than it is today, and vastly more scalable.

Between celebrating our risk-takers’ “productive failures” and clustering our innovative companies together, we’ll help our tech sector help itself, and the entire region will benefit in the long run.

So, what do you think?  What crazy ideas do you have?  Let us know by commenting below.

We are now accepting nominations for the 2012 award. The submission deadline is Friday, April 6th.  Winners will be notified by April 27, and awards will be publicly announced at the SARTA Sacramento Med Tech Showcase on June 5, 2012.  For more information or to download the nomination form, visit SARTA’s Claire Pomeroy Awards webpage.

News Release, February 3, 2012:  NOMINATIONS OPEN FOR 2012 MEDSTART CLAIRE POMEROY AWARDS:
Program Honors Sacramento Region’s Best Medical Technology Innovations

Along those lines, I want to thank Dave Sanders for his effective leadership as Board chair over the past two years. His unwavering commitment to SARTA and its mission combined with his energetic, creative and collaborative approach to the role have definitely put us in a position for even more success moving forward. I hope he won’t mind when I lean on him for advice.

As for my priorities, I have several and think those familiar with SARTA would agree that all are consistent with what the organization is fundamentally driving in the Sacramento Region.  I’m not envisioning a dramatic shift in direction, but rather a push to ensure that we’re delivering on our objectives, which include:

• Further establishing SARTA as a hub where ideas and knowledge are shared and through which entrepreneurs in the region can connect.
• Supporting emerging companies through networks and education.
• Connecting the region’s significant assets – universities, intellectual capital, government resources and more – to ensure a thriving technology sector.
• More widely promoting our region, its assets and company successes.
• Ensuring that the Next Economy project effectively supports regional technology sector growth.
• Raising awareness of our larger regional companies and their executives.
• Helping to add technology more firmly to the region’s economic identity, in addition to government, health care services, real estate and construction.
• Helping to explore and establish a bigger role for agricultural innovation in the regional economy.

It’s a lot to do but I’m confident that we can make progress on all of these fronts over the next year.  If we are to have the type of impact I know the Board, our staff and members envision, these are the issues and opportunities we need to effectively address.

As we move forward and in the spirit of continual improvement, I invite you to weigh in on our priorities and work, and I look forward to working with all of you over the course of the next two years.

It’s a few days into the New Year and I trust that most people are still standing by their New Year’s resolutions. But will it last?  As a business owner, will you truly listen to your customers?  As an employee, will you be a better team player?  But what if we simply started caring?

I have to confess; I didn’t make any resolutions this year, or the year before.  The calendar is a funny thing.  Why wait for a whole new year to begin, when we could just resolve ourselves to achieve great things every day?

In 2011, LCS Technologies was recognized as the fastest growing company in the Sacramento region.  It seemed that no one had heard of this little company before, except for its customer base.  How was LCS able to succeed in the current economic climate?  Its people cared about the customers and how to make them successful. It was about listening and connecting the dots to create success, even if there wasn’t anything in it for LCS.

The idea behind LCS Technologies was born out of a simple day-to-day frustration.  The frustration of working as part of a large corporation where business is driven by utilization percentages, profit margins and Excel spreadsheets.  A world where teams are assembled with people who have the skills on paper and are expected to meet a set of numbers.  Excellence requires more than numbers; it requires motivated and engaged people. People who believe in the cause they are working for.  People who care.

Following the articles in the press about our success, I received a call from John, a local business real estate agent.  Our company was growing and John wanted to know if we needed more office space.  I explained that we currently operate out of our iPads and use the cloud for all our storage and collaboration.  We don’t need any real estate at this point.  However, my partner and I are also starting a new venture that will require some office space in the future.  I asked John about any available warehouse type of building that we could retrofit into an office and to provide me with some data.  I was looking for something different.  Unfortunately I did not hear back from John, until a few weeks ago with a mass email simply saying, “Please find attached our business real estate quarterly report.  Let me know if you have any questions.”  Did John listen to our needs?  Did John care about our new venture?

This new economy is changing the way we conduct business. More is required today; more careful listening and more active caring.  Add to that an amazing set of new technologies and devices that connect us like never before and business as usual is over.  Gone are the days when we could afford to lose a potential customer for another one.  No matter what hat you wear at work, by simply caring about what you do and for whom you do it, you will make a difference.  Let’s all start caring and jump-start this economy!  That is really the only resolution we need this year.

“Never doubt that a small group of people can change the world.  Indeed, it is the only thing that ever has.”  – Margaret Mead

I have had the pleasure of driving my 2010 Tesla Roadster since July 2009.  And I have to emphasize the word ‘pleasure’ when describing my driving experience.  The first thing you notice driving an electric vehicle is the instant, continuous and colossal acceleration.  The beauty of an electric motor is that it delivers a hefty amount of torque at zero rpm; and it is torque, not horsepower, that launches you from a standing start with neck snapping ecstasy.  Just hit the accelerator and you go; no dropping the clutch while your engine is roaring at NASCAR levels is necessary.  And there is no shifting!  With a really wide torque range and 14,000 rpm red line only one gear is needed.  Easy!

Range Anxiety?!  What range anxiety?  Like any vehicle your ‘mileage’ depends on how you drive.  “Spirited driving” will drain the coulombs out of the battery at a greater rate than conservative driving.  It’s the same as gas guzzling, tire smoking starts with an internal combustion engine (ICE) vehicle.  Even with spirited driving, my range is over 150 miles per charge.  Need to go farther than that?  Put the car in extended range mode and you easily get over 200 miles; I know because I have tried it.  For everyday use the range is more than enough.

The great thing about driving an electric car every day is it is so easy and convenient.  Just turn the key and you are ready to drive; just press the accelerator and you are moving, no shifting required; park in the close in and usually empty ‘electric car only’ spaces in the parking ramp; and don’t worry about service visits to the dealer.  There isn’t much to service:  no oil, no spark plugs, no fuel injectors, and not much wear on your brake linings (regenerative braking is awesome).  Just plug it in at night and it is all charged and ready to go in the morning, just as if someone takes your ICE car to the gas station for a fill up each evening.

Traveling in Tesla Time?  No, this is not a fossilized Grateful Dead song.  Tesla owners refer to Tesla Time as the extra time needed to get somewhere after answering questions and general conversation with the inquisitive passersby who appear when you park the car.

First, it’s the economy.  The financial meltdown of 2008-09 and the Great Recession that has followed it have affected everyone.  While there’s no comparison to losing one’s job and one’s home and even the hope of ever getting them back, the financial debacle also adversely impacted venture capital and the investors in it, like large pension funds; the healthcare industry, into which entrepreneurs hope to introduce new innovative products; and the IPO market which used to give early liquidity to growth-stage and even earlier-stage companies.  The immediate effect was a sudden liquidity crisis – no one had cash, and to raise it meant trying to sell assets when no one wanted to buy them.  Venture capital funds found their limited partners did not want to answer capital calls, let alone commit to new funds.  Venture-backed companies that were midstream in their development could not find funding, except at ridiculously low valuations, which wiped out founders and early-stage investors.  One investment banker I know reported to a board I sit on that the top quintile of VC funds that invest in early-stage med tech were reporting 0 to 10% gains, with the other 80 percent reporting losses.  The IPO window remains closed, and, because that leaves big med tech companies as the only buyers in a market full of desperate sellers, they have the luxury to wait until later and later in the process of new product development, until after the product is in the market and rapidly growing sales, before providing any exit opportunity.  This means more investment capital is needed when less is available, and the only attractive investment space today is in the late-stage growth capital for great products that are already approved and have at least $10M in revenue that is rapidly growing; only the lonely are willing to touch the earlier stages.  And part of that preference is that, even for the best new technologies that need to be sold into hospital systems, the complexity of that sale, and the financial stress those organizations are under, make it ever harder and slower to transform the way healthcare is delivered.

Second, it’s the healthcare reform: either Obamacare and the Accountable Care Organizations it mandates, or its promised repeal, if Republicans win back control of the government, or if the Supreme Court finds the mandate on individuals to purchase private insurance to be unconstitutional.  With both scenarios for the big picture plausible and close to equally probable, the simple fact is that it is impossible today to forecast what reimbursement will be available for tomorrow’s new products.  Without better visibility into that key assumption – how much a new product will sell for – the financial projections and calculations that entrepreneurs and early-stage investors make, which constitute an educated guess under the best of circumstances, become downright speculative, the decision to invest becomes harder to justify, and the valuation that will work for investors, if the lowest end of reimbursement turns out to be what we end up with, makes it hardly worth the effort for founders.  While it still seems to make sense to look for products that not only will improve safety and efficacy, but that will also save money for the “system,” understanding how ACOs, or whatever else our existing health systems will evolve into, will decide to shift to new products in the future, and what evidence they will demand in order to make such a decision, and how to fund the development of that evidence, is today’s health policy challenge to early-stage bioscience investing.

Third, it’s in this environment that the FDA chose to embark on a multi-year process of reforming its regulatory processes applicable to new medical devices.  The FDA, like many agencies, has an imperfect statute to interpret.  The 510(k) process was intended to grandfather devices already on the market in 1976, as well as the ongoing process of making minor improvements to them, so long as the new products are “substantially equivalent” to the older ones.  The PMA process, with definitive and expensive clinical trials proving safety and efficacy, was reserved for truly new major risk devices.  With large gray areas to contend with, the FDA had developed a sort of ad hoc “de novo” process, by which devices that were arguably substantially equivalent to predicate devices, but which carried some substantial level of new risk or uncertainty as to safety and efficacy, could be put through the paces of limited clinical trials, but under the auspices of 510(k), rather than PMA.  Without clear published regulations or guidelines, industry would need to rely on imperfectly accessible experience with specific classes of devices, and there were inconsistent results between reviewers and offices.  So the FDA began last year with a thorough and time-consuming process of study, soliciting input and comment, and this year has been announcing its intentions for changes, with more transparency and more guidelines.  The Institute of Medicine concluded that 510(k) should be scrapped, because it does not purport to require proof of safety and efficacy, but FDA rejected its recommendations, in part, presumably, because 510(k) is a law binding on the agency. Without legislation, there are limits to what FDA can do, yet few want to turn over to a deeply dysfunctional Congress the process of fixing FDA.  Our Leadership Series Program on Wednesday, October 26, Recent and Pending Changes to the FDA and the 510(k) Process, will include an update on the most recent announcements for how this process is changing, as well as the latest in the policy debate being entertained in Congress.  I like to think we will all be better served if it becomes easier for new innovations to make it to market, and that, to the extent the public needs greater protection from unsafe or ineffective products, post-market monitoring and corrective actions be relied upon.

So we are in a perfect storm.  According to the October 11 Interim Report of the President’s Council on Jobs and Competitiveness (page 29 and its footnotes), venture investing in biotechnology fell from 18% of total in 2009 to 12% in 2010, and new seed stage investing in medical devices fell nearly 50% in the first six months of this year.   At the same time, massive growth in investing in early-stage med tech is occurring in Europe and India, which are not subject to either healthcare policy reform or regulatory approval reform, and thus represent a product development life cycle that is faster and more reliable.  At least with the Jobs Report, the White House is now acknowledging the problem.  With the somewhat tardy and perhaps now politically desperate emphasis on jobs creation, we seem to be moving beyond the stage where FDA and DHHS dismissed complaints from the innovation ecosystem that new technology development is being driven overseas by US regulatory policy as “merely anecdotal.”

You can see Guy’s Leaf at the Sacramento Clean Tech Showcase, Monday, October 24 at Sacramento State.  Register now to get an early bird discount at www.cleantechshowcase.org .  Forty excellent speakers and some special events.  A hundred exhibitors.  Plan to make a day of it. It’s worth it.