Idealab, the Roots of the SoCal Tech Community, and the Bill Gross Legacy

I thought I would take an opportunity on this blog to move away from some of the current investment and startup trends, reflect, and dive into the tech history books (as well as my own personal history) by looking at the man and place I believe really put the modern southern California tech community on the map: Bill Gross and Idealab.

Bill’s name is well known within the investment, start-up and tech communities, especially of late with the recent launch of his Chime.In as a social network for brands, but I still don’t think Bill gets nearly enough credit for just how completely innovative Idealab’s model and output was during the time I was there to witness it all. Bill was like a Willy Wonka who didn’t want to confine himself to the chocolate bar, and in my work for Idealab Capital Partners, I felt a bit like Charlie. Through Idealab Capital Partners, I was able to invest in these companies at a very early stage post-incubator. If I didn’t already know how good I had it on the bleeding edge of ‘90s tech, I can remember the day driving to the Idealab offices, after Bill said in a newspaper interview that he needed more staff to keep up, and 4,000 people showed up. That’s the kind of sway Bill held in the L.A tech community during the first golden age of the Internet.

The companies that came out of Idealab were some of the most forward-thinking of their time, even if they weren’t all able to capitalize at the time on that inventiveness, much of which came from Bill himself and all the ideas kicking around in that gifted brain. There was Overture (pay-for-placement search), NetZero (ISP), eToys (online shopping), Free-PC (ad-supported hardware) and Citysearch (online local listings). In fact, the last company came out of Bill’s own famous search for a barber, itself a precursor to eBay’s apocryphal PEZ dispenser“creation myth,” though in Bill’s case it was all true. Bill was a hard guy not to copy given all his fertile and visionary ideas, some so visionary that there wasn’t even a web infrastructure yet in place to match them.

More than any of these companies or ideas, though, I think Bill’s truly enduring legacy is twofold: building the first real incubator and putting L.A. tech on the map.

A lot of what I like to call the “young guys” think they’ve invented the tech incubator. Well, Bill has you beat by at least a decade and a half. It’s true that a lot of the ideas that came out Idealab were simply what Bill was whiteboarding himself, but he also did a lot to build the other companies of the young, hungry and brilliant. At that point, the best that so-called other “incubators” could provide was the equivalent of a shopping spree at Office Depot. They’d get you some desks, some computers, maybe some pencils if you were lucky, and that would be it. Bill really knew how to build companies through Idealab, whether they were his baby or not.

The other part of Bill’s legacy is that he put Los Angeles tech on the map and cast it in a light it had never been seen in before. This came at a crucial time for the city, as it was slow to recover from the recession of the early ‘90s and was in a prolonged economic funk from 1993-98 (not to mention that my beloved USC Trojans were, with one Rose Bowl season’s exception, pretty bad). By basing Idealab in Pasadena, and putting out those calls for the brightest CS/EE kids from Caltech, he built the closest thing L.A. had to Silicon Valley, and something like that area’s own unique relationship with neighboring Stanford University. He also managed to do a lot of fundraising from the Hollywood crowd, a distinct synergy that exists in southern California’s tech community today, even if the center has moved west from Pasadena to the “tech coast” and carried most Web-based companies with it.

I feel so thankful that I was able to work with Bill during that magical and marvelous time in the 1990s, and anybody who’s ever formed or invested in a startup, especially in southern California, should be thankful that Bill blazed the trail he did and has made our collective journey to innovation all the easier.

William Quigley is Managing Director at Clearstone Venture Partners. He blogs at The Quigley Report.