By Julia Rodgers. Illustrations and Photographs by Seth Epstein
Santa Barbara is a hot technology town right now. Despite the economic downturn, our small, highly interconnected technology community has been on fire, attracting big venture capital money and hiring new employees. • Historically, UC Santa Barbara has played an important role in our community’s successful innovations, and business leaders today say the university is more vital now than ever to their success. It not only provides a ready supply of bright, capable employees for these companies, but many of the ideas for start-upS come from its top-notch faculty and their research labs. Throw in the university’s state-of-the art facilities and equipment, and you can see why one entrepreneur calls Santa Barbara “tech utopia.” • “You can’t overlook the influence of the university,” says Jeff Carmody, managing partner of Agility Capital, a venture debt firm in Santa Barbara. “If you look at the history of emerging growth companies along the south coast, the university has been the most influential driver of this market.” • For example, take three of Santa Barbara’s hottest new start-ups: AppFolio, Eucalyptus Systems, and Right Scale, which collectively have raised more than $57 million in venture capital funds in the last few years. At least half of their employees hail from the university, either as graduates or professors; AppFolio and Eucalyptus each has a UCSB professor providing the expertise in the cutting-edge technology these companies sell. “Hundreds of jobs and billions of dollars have come through the university,” says Woody Rollins, CEO of Eucalyptus Systems. • For its part, the university understands the importance of cooperating with businesses. “The mind-set at UCSB has always been that moving technology off the campus is an important part of its mission,” says professor Gary Hansen, director of UCSB’s Technology Management Program, an academic and mentoring program for aspiring entrepreneurs that’s so popular on campus, it’s restricted to 550 seniors. • Of course, the fact that Santa Barbara is one of the most desirable places in the world to live appeals to what one venture capitalist calls the “super angels” with money to invest and expertise to offer. “Santa Barbara brings together an unusual group of people. For a small community, it has attracted the titans of industry whose involvement can have an enormous effect on the success of a small company,” says Frank Foster, managing director of venture capital firm DFJ Frontier. • “You can construct a really fine board here,” remarks Fred Gluck, former managing director of McKinsey & Company, the prestigious consulting firm with 94 locations in 52 countries. After he retired, Gluck and his wife, Linda, planned to spend a year traveling the country, deciding where to live. “We came down here from the Bay Area first and never got any farther.” Like other super angels, Gluck hasn’t really retired; he serves as chairman of the board of CytomX, a biotech start-up he founded, and Amgen, the world’s largest biotech company, headquartered in Thousand Oaks. • The people profiled on the following pages represent a wide variety of the thriving technology companies doing business in Santa Barbara. But the list is not comprehensive—that would be nearly impossible to do in these pages, since UCSB faculty and alumni alone have started 200 companies over the years.
The Surfer Dudes
Tyler Crane 25
Christian Smith 24
Chris Herbert 24
While students at UCSB in 2008, Christian Smith, Chris Herbert, and Tyler Crane were sitting around the dining hall at their dorm, brainstorming new technology ideas. A friend walked up, complaining that he had lost his phone. That’s when it struck them: They should invent a way to use technology to protect valuables such as cell phones, wallets, or keys. After further refinement and with the help of now-CEO dynamo Jacques Habra, their idea won Most Fundable business idea at UCSB’s New Venture Competition in the spring of 2009. Weeks later, working out of a garage on Milpas Street, they started their company, Phone Halo, which sells a small wireless device that prevents loss or misplacement of your phone or valuables. Smith, Herbert, and Crane credit UCSB for their success. “The biggest reason for us to stay in Santa Barbara were the contacts we’ve made through UCSB,” says Smith. “If we didn’t have the Technology Management Program, I don’t think this company would exist.” All native Californians, the three had something else is common as well: the love of surfing. “We work and we surf and that’s pretty much all we do,” says Smith. Campus Point must serve as divine technological inspiration.
Yin + Yang
Lynda Weinman 55, Cofounder & Executive Chair, Lynda.com
Ning Wang 46, Chief Technology and CFO, Lynda.com
Back in the 1980s, Lynda Weinman was working as a special effects animator on Return of the Jedi when she taught herself how to use a brand new gadget: the personal computer. Eventually, she became one of the best-known teachers of Web design in the world, in part because she wrote the very first book on the subject in 1996, Designing Web Graphics.
Fast forward to today, and Weinman’s company Lynda.com is the leading provider of software-training videos online and is growing by leaps and bounds—she just leased 50,000 square feet of office space in Carpinteria and plans to hire approximately 60 new employees this year. Big venture capital firms from Silicon Valley are begging to get a piece of the action, but she has turned them down, preferring to remain a family-owned company. She gives a lot of the credit for this explosive growth to Ning Wang, who serves as both chief technology and chief financial officer of Lynda.com. Wang, a native of China, earned a PhD in physics at Berkeley, but decided to pursue a business career instead of an academic one. At Lynda.com, Wang successfully inflicted budgets on the creative types. “Ning is the yin to our yang,” laughs Weinman.
John MacFarlane 43, CEO, Sonos
Growing up in Denver, John MacFarlane spent his childhood taking apart household appliances and electronics. When he was about 12 years old, he disassembled the automatic garage door opener at his parents’ house; to this day, it still doesn’t work. “I took apart everything, but it wasn’t until I was about 13 that I could put them back together,” he says. “I was pretty destructive.”
As an adult, MacFarlane has proven himself to be nothing but constructive when it comes to putting technology companies together. While taking a sabbatical as an electrical engineering PhD student at UCSB in the early 1990s, he founded one of Santa Barbara’s most successful start-up companies of all time, Software.com. After taking it public and then merging with another company, MacFarlane left to start a new company. He tinkered with the idea of producing helicopter avionics, even becoming a helicopter pilot so he could test his ideas. Instead, he founded Sonos, a popular all-in-one wireless music system for the home.
With offices in Santa Barbara, Massachusetts, the Netherlands, and Malaysia, Sonos keeps MacFarlane on an airplane a lot of the time. “I can fix most anything, but I don’t have a lot of time now to do that kind of thing,” he laments. And maybe that’s why the garage door at MacFarlane’s Montecito home still works.
Nancy Stagliano 43
CEO, CytomX Therapeutics
Nancy Stagliano is a little bit different from most of the technology gurus in Santa Barbara—she’s a female CEO of a biotechnology company. That alone sets her apart, since there are few women CEOs and even fewer biotech companies located here. She has an impressive background, having earned her PhD in neuroscience, followed by a postdoctoral fellowship at Harvard Medical School, where she studied the way the brain is injured after a stroke.
About 10 years ago, she traded in her lab coat for a business suit and joined the biotech industry. She first worked in Cambridge, Massachusetts, at Millennium Pharmaceuticals, and now here, where she runs CytomX Therapeutics. With research licensed from UCSB chemical engineering professor Patrick Daugherty, CytomX Therapeutics is developing drugs that can treat serious diseases such as cancer without side effects on the rest of the body. Stagliano is particularly impressed with the lack of bureaucracy and hierarchy at UCSB compared to East Coast academic institutions. “There’s definitely a difference in culture,” she says. “UCSB has a healthy attitude to being open to working with companies.”
Woody Rollins 48
CEO, Eucalyptus Systems
Michael Crandell 54
CEO, Right Scale
Michael Crandell grew up here, the son of Larry Crandell, who is often called “Mr. Santa Barbara” because of his involvement in local charities. Woody Rollins moved to Santa Barbara from Boston in 2004, and spends most of his free time coaching his three sons’ football and baseball teams.
Clearly, neither of these men is a revolutionary in his personal life, but the technology their companies provide is. Crandell, along with Thorsten von Eicken, a former Cornell professor, founded RightScale in 2007. Rollins, paired with Rich Wolski, a computer science professor at UCSB, founded Eucalyptus Systems in 2009.
Both companies revolve around a relatively new concept called “cloud computing,” by which a company can use a computer server at a distant location—on demand—for an affordable fee. Cloud computing is easier, cheaper, and more efficient than buying expensive servers, and many businesses are changing the way they plan their computer needs because of it.
“We’re suddenly a cloud computing destination,” says Crandell about Santa Barbara, the one place in the United States where a group of European technology professionals came to visit last year to learn more about the cutting-edge technology. “It’s kind of fun!”
The Start up Family
Jason Randall 37
Vice President, Product
Management, AppFolio, Inc.
Christina Walman 35
CEO, VGI, Inc.
Like many successful tech pro-fessionals in Santa Barbara, Jason Randall has followed his mentors from an established company to a new start-up. First, he worked at ExpertCity, which provided technical support services over the Web; it became one of Santa Barbara’s huge success stories when it was sold to Citrix in 2003. Then, two years ago, he left Citrix to join AppFolio, an online property management software company.
Randall met his wife Christina Walman in high school in Santa Clarita; their romance blossomed while the two were students at UCSB. Now married with three daughters, Walman left her job at the university to start her own company—VGI, Inc., which uses mobile technology and social networking to help people change certain behaviors such as diet and fitness. By summer, the company will have Facebook and iPhone applications ready, and it is targeting corporate wellness programs.
Despite a demanding work schedule, the biggest priority for both parents is their children. “You have to work hard to find time for your family,” says Randall. And even though some might say having both parents working at start-ups could be risky financially, Walman isn’t worried. “AppFolio is the hottest start-up on the planet,” she brags.
Kevin O’Connor 49
CEO, O’Connor Ventures
Kevin O’Connor started his first company while at the University of Michigan in the early 1980s. He sold it and then launched two other companies, one of which went on to become the Internet marketing success story called DoubleClick. As its CEO, O’Connor was living in New York City, working 80-hour weeks, and dealing with lawyers, politicians, and the media. “I couldn’t stand it,” he recalls. “I got burned out.”
So two weeks before 9/11, he and his family moved to Santa Barbara. “I was working a lot less for eight or nine years,” he says, even though he continued to serve as the chairman of the board of DoubleClick, eventually selling it for about $1 billion in 2005. Now, O’Connor is back to long hours with a new start-up called FindTheBest.com, which allows users to quickly find and compare information in many categories. The site is currently in beta mode but will launch this summer. Ten employees (with intern power from UCSB and Westmont) work out of O’Connor’s Montecito estate, and another 20 people in India compile information on ski resorts, schools, camps, surf spots, and thousands of other topics you might want to compare. “Living here, you’re doing something because you’re passionate about it,” he says. “You don’t wake up every day thinking about how to escape it.”