sarta_blog » Thursday, March 15, 2012
Lean Startups

Entrepreneurs Wanted: Sacramento’s Virtuous Startup Circle

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

Sacramento is a bit like a “startup suburb” to the bay area and there are a lot of advantages to that, including lower costs, more available talent, a less frenetic pace and higher quality of life. Sacramento-based  entrepreneurs can do three bay area meetings in one day and still be home in time for a bike ride along the American River before dinner. Inexpensive technologies like HD video conferencing and screen sharing are shrinking the gaps between cities around the world, including the I80 corridor between Sacramento and the bay area. Where you are is becoming less important than what you can create.

I’ve spent time in both startup communities. There used to be a disparity in the level of talent between the two regions. That’s now started to shift dramatically and I think Sacramento could reach parity this year. I’ve done guest lecturing on entrepreneurship at both UC Davis and Sac State. These programs now offer the same quality information as entrepreneurial programs at Stanford and Berkeley. Programs like SARTA and the Sacramento Entrepreneurship Academy are doing great things unique to this region. Networking events and startup meet-ups are increasing and hacker spaces are starting to open. World-class startup knowledge, resources, vendors and mentors are now available in Sacramento.

In fact, Sacramento now has everything necessary to launch local startups into orbit except one. There aren’t enough locals who want to be startup entrepreneurs. While there are more Sacramento startups now preparing to launch than ever before, it’s still not the same as the valley where startups are the cool thing to do and every barista has an elevator pitch. That’s actually an advantage for Sacramento startups because it’s easier to get attention and help here. There’s a virtuous circle that built the valley startup culture. Startups there succeeded and created wealth for entrepreneurs and investors. Those people then put that capital and experience to work creating new startups. That virtuous circle is reaching critical mass right now in Sacramento, but where are the beginner entrepreneurs? Successful entrepreneurs aren’t special or different. They’re simply ordinary people with extraordinary dreams and the faith to believe in themselves. Sacramento already has a lot of those people but too many are still standing on the sidelines of life. The coaches, trainers and equipment are here and waiting. It’s time to suit up and get in the game.

- Mark Randall

Mark blogs at http://www.markrandall.com

 

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6 Responses

  1. I am a start up in Roseville and haven’t had the pleasure of working with SARTA. Roseville Chamber of Commerce is a great place to begin-I would like to become involved-I could certainly use a mentor. My business is Global Research & Counseling. Let me know more about it.

  2. Mark Randall says:

    Thanks for the comments. I agree with your observation about raising capital in Sacramento, particularly for tech. While there are some active investors and angels here, the density is still low. That’s why I didn’t specifically comment on raising capital. That’s the part I have the least recent experience with since it was quite a while ago that I was raising money in Sacramento. At that time it wasn’t a productive use of time to raise funds in Sacramento. There were a lot of talkers and few check-writers. Conversely, when we went to the bay area and met with a small group of angels, every one of them wrote a check at the end of the first meeting.

    That’s why I wrote about the angel community in the bay area. The angels we met with there had already had exits. I think that was key to their moving confidently and promptly. As the Sacramento angel community has more startups exit, angels here will be playing with “house money” they’ve earned from previous investments which is certain to improve things.

    That said, I’ve heard the Sacramento investment scene has grown and if you don’t find a fit here, the world’s largest startup investment community is just down the road.

  3. Stephane says:

    Great input. I’ve been in Sacramento for more than 12 years. It is a great place to live and a great place to start a business. It may not have the glamour that the Bay Area has at first, but I can easily come up with a dozen reasons why it is such an awesome place. Unfortunately it is under-rated and over-shadowed by the SF region.

    The Bay is the 19 year old teenager exploring the world with an allowance, while Sac is the 35 year old responsible adult. Yes, there may not be the same flow of investment, but there is a solid and mature business community. It is a very well connected community as well, thus a solid foundation for new businesses.

    We need this community to help, support and promote our local entrepreneurs and I believe SARTA is a great enabler. Events like INNOVATION 2012 and the leadership series are avenues for folks to express and share ideas, concepts and connect the dots.

    On my wish list is also a better collaboration between the State and the local entrepreneurs. The current regulations make it almost impossible for the two to work together and benefit from each other. With a more collaborative environment, local and State agencies could benefit from the efficiencies of small businesses, lower overhead, while fueling the local innovation engine. It could lead to a win-win.

    Aaron, I can’t wait to see your technology emerge. It would be great to see an IPO emerge from this region. At the same time, we are in the progress of building a new platform that will enable small businesses to reduce their IT costs. While our goals are not to go public, we are committed to bring innovation to the region, grow a software development hub and add new and exciting jobs. Stay tuned.

  4. Brett Owens says:

    Thanks for the great post and conversation starter, Mark!

    I would also qualify the thesis along Aaron’s line of thinking – I believe that Sacramento is currently a great place to boostrap a technology startup. You can get to the Bay Area when you need to, but your cost of living is 1/2 of what it would be in SF or the South Bay, so you can hang around much longer (a necessity when bootstrapping) because your personal “burn rate” is much lower (also a necessity when bootstrapping).

    In terms of raising money here, my limited experience has been quite similar to Aaron’s. There’s not really any serious tech money here yet. We’re all waiting for Riskalyze to IPO so that Aaron can become the Ron Conway of Sacramento :)

    That said, you can still start your company here, you just need to be realistic if and when it’s time to fundraise that you will need to go to the Bay Area for those funds.

    I also agree that the networking in Sacramento can be fantastic if you know where to look for it. As mentioned, SacStarts is a group we both support with great enthusiasm, and you’ll get better access there to real entrepreneurs than you would at many Bay Area networking events (without the ripoff ticket cost, too!)

  5. This is awesome! It was great hearing Mark speak as a student of the Sacramento Entrepreneurship Academy. Great reading!
    Being a Sacramento Startup is awesome and such a great place to start a business!

  6. Aaron Klein says:

    There are a lot of good points in this post. But from the perspective of this Sac-region entrepreneur, you haven’t sold me on the idea that “the coaches, trainers and equipment are here and waiting.” I think we’ve still got a lot of work to do there.

    The statement is true to some extent. If you’ve got the seed of an idea and it needs feedback or nurturing, go to a SacStarts dinner or ping one of the many folks in the startup community and ask to have lunch. There are some really smart people here who have given me a lot of great advice. I haven’t always followed it to the letter, but their advice has always improved my thinking.

    You know what we’re really missing? A group of 10 or 15 people with deep pockets and extensive rolodexes who can find the ideas they like and the entrepreneurs they click with, decide to lead a round of financing, make ten phone calls and bring a deal together.

    There are some incredible exceptions to the rule, but all I can say is that I’ve met an awful lot of Sacramento “angel investors” who haven’t written a check in ten years. And the ones that do write checks usually have day jobs – they’re as helpful as they can be expected to be, but they can’t make a deal happen through the force of their rolodex.

    If we’re going to build a real and thriving ecosystem, that’s what we need in Sacramento. The Ron Conways and Dave McClures who play consigliere to the entrepreneur and use their networks to help other investors find the signal in the noise.

    It’s easy to dismiss this concern by saying that there must be something wrong with my startup, but all I can say is, we’ve had absolutely zero problems going down to the Valley and finding these kinds of people, who see the power of our technology and the incredible opportunity of what we’re building, and climb aboard to play those roles. That’s why we’ve been successful so far.

    I’m hoping that I’m in the process of building a “flagship” technology company for the Sacramento region. We’re building to last. For all the reasons Mark stated, I think we can find a great supply of awesome engineers in Sacramento, so we’re planning on putting a lot of our engineering force right here. If we’re really fortunate and get all the way to an IPO, perhaps we’ll be able to play a small role in spawning that ecosystem here. Time will tell.

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