Thursday, October 19, 2017
Interview with Steve Poizner, Alliance for Southern California Innovation
Steve Poizner is a serial tech entrepreneur and was formerly California Insurance Commissioner, and recently founded the Alliance for Southern California Innovation (www.alliancesocal.org), a nonprofit which has gathered together an impressive list of research universities, technology leaders, and others to help boost the profile of Southern California in the technology industry. We sat down with Steve to chat about what the Alliance is working on, and why he decided to champion the growth of the technology industry here.
Tell us what the Alliance is all about?
How did you decide to found the Alliance?
Steve Poizner: I've lived in Silicon Valley for over 35 years. I spent my professional career starting and running tech companies in Silicon Valley, and have been really successful at it. My last company got acquired by Qualcomm, and Qualcomm wanted me to move to San Diego to run their emerging business portfolio. I did that for a couple of years, which got me and my wife down to SoCal. I then became and EIR at UC San Diego, and joined EvoNexus, the not-for-profit incubator run by the Irvine Company. That allowed me to get a really good sense of the technology ecosystem in Southern California from all of those activities. However, every time I went back to Silicon Valley, where I am living again, the contrast became super clear. However, every time I'm in Silicon Valley, I'm reminded on how saturated its is becoming here, and how it's a victim of its own success. There's the traffic, and things are twice as expensive as they were five years ago. There's a tightness which is squeezing the lifeblood from the entrepreneurs, even as it remains an amazing place. Now is a good time for Southern California to step up its activity, because I think there's definitely an appetite for entrepreneurs in Silicon Valley thinking about other locations than Silicon Valley, because of the saturation situation here. The idea came about because of my work in both regions, and comparing and contrasting the two, and figuring out the game in Southern California. I really believe we've created a unique team of Southern California talent, to go after this not-for-profit mission.
What are you hoping to do that isn't be done now in the region?
Steve Poizner: I mentioned the alliance members. We have every major research university in Southern California in the Alliance now, and that was extremely hard to do. There's not much of a track record of universities and research institutions working together. But, there is broad agreement that it would be a wonderful thing to get more entrepreneurs and venture capital into the region. So, despite their rivalries and silos, people have come together, and we now have all 5 UC campuses in Southern California, plus Caltech, Harvey Mudd, USC, UC San Diego, and others involved. We have the Sanford Consortium for Regenerative Medicine, a consortium of the world's life sciences institutions on our board. We have the president of the Salk Institute, the President of Qualcomm, an EVP from Warner Brothers, the CEO of PIMCO, and quite a collection of others. The first thing we did was put together this kind of horsepower to work on this. Unless we put together some really jaw-dropping assets, and have a crystal clear focus on the gaps, Southern California's trajectory as a technology hub won't change very quickly. As you know, Silicon Valley has a locker grip on the venture capital community. The VC community tries to service Southern California from Sand Hill Road, but from my point as an entrepreneur, that's not the same thing as being here. You have to get on a plane to see investors, especially for seed and Series A round. You want those investors to be local. If you look at the data, Southern California is missing, and there just isn't enough seed capital or Series A capital compared to Silicon Valley. I think there are things we can do to address some of those gaps, and really take advantage of this coalition and alliance we've put together.
I think our board is agreement for the need for more venture capital. The statistics show that there is five times more venture capital in Silicon Valley than in all of Southern California combined, despite two thirds of the state being here, population-wise. There's eight times more growth capital in Silicon Valley, and two times more startups in Silicon Valley versus Southern California. We have a way to go. None of this is easy. The first step, is to attract more entrepreneurs. There are lots of regions around the country, who want to be the next Silicon Valley, and I think Southern California has a great shot at it. Our focus in 2018 will be on the entrepreneurs. We need to increase the entrepreneurial density in SoCal. I think there are many different buckets here. There are entrepreneurs who are already in Southern California, but who might be potentially picking up and leaving. How do you hold onto those great entrepreneurs here? Another bucket are entrepreneurs in Silicon Valley. There are many seasoned ones who have been successful and are in between gigs, and looking for where to start their next startup. They're looking at places like Bend, Oregon; Portland; Seattle; and Salt lake City. There's only just starting to look at Southern California.
Unless you live in Silicon Valley, you don't appreciate how congested and expensive it is here. We're at a turning point. Great people are leaving Silicon Valley, and Southern California is not on the radar. I want to put it on their radar. We have a great story, and I plan on telling it. The Alliance can do better than any one university or any one county, and tell the entire Southern California story, and help get out to entrepreneurs who are all over the world, who are mobile and thinking about relocation, and enable Southern California to get its fair share. One final thing, is we think we're unique in trying to match technologists with entrepreneurs. Serial entrepreneurs know how to commercialize things. Southern California has tons of technologists, both in life sciences as well as other technology areas. There are professors, post docs, and other innovators. However, we're short on entrepreneurs, according to our analysis. We want to create some events, and other initiatives and platforms, that help introduce technologies to serial entrepreneurs who are hoping to commercialize technology and are looking for the next startup. There are some matching events occurring at various places in Southern California already, but our uniqueness, is that we can pull together all nine of those amazing universities and research institutions at one event. Having them all together could really draw national attention. Just think what you could do if you had the top technologists from Caltech, UCLA, and the whole list presenting their major research to a room full of entrepreneurs looking for their next startup.
I think a lot of entrepreneurs here seem not to know about the saturation issue in Silicon Valley, can you talk a bit more about what you're seeing there?
Steve Poizner: First of all, let me say, Silicon Valley is a special, amazing place. I love the place. I went to Stanford Graduate School of Business, and I met my wife here, and raised my family here, and started three companies here. It's a phenomenal place. The risk-taking culture is fantastic, and the ecosystem is super-well developed. It's a great place. But it's no longer just this little community around Sand Hill Road. It's a seven county sprawl. It has reached a point where there really is a price to be paid for being here. There are lots of advantages, but the costs are rising, and rising, and rising. What's really pushed that in the last few years are the major titans here, such as Apple, Google, Facebook, and others. They hire engineers by the thousands, and they are literally driving the cost of engineering talent and office space through the roof. There is data that supports that, and the fact is that it literally takes two times more expensive to run a startup in the Bay Area versus just five years ago. In addition, even if you're able to put together a team, you have to compete with all of those goliaths out there for talent. There's so much poaching going on, it's tough to hold onto your team, and that's very challenging, from an entrepreneur's perspective. That's pretty clear if you're an entrepreneur here in Silicon Valley fighting away, but not so clear when you're not here. Yes, some companies want to be in Silicon Valley because they're in certain areas of technology, and Silicon Valley will likely be a great place for that. But Southern California can begin to carve out its own area of uniqueness. Some really excellent areas of domain expertise in Southern California includes life sciences, genomics, wireless, material science, digital media, entertainment, and medical technology. One thing we want to do, is to take those areas of great strength, and grow them, and make it a great place for Southern California to start businesses in those area, plus in new areas like cybersecurity, Augmented Reality, Virtual Reality, and other emerging technology fields.
I know your roots are in high tech, but you have a long history in the political world. Why the return to the high tech industry?
Steve Poizner: I have a pretty esoteric background, but there's a common element to all of what I've done in my life, including my work in the White House on the National Security Council, as Insurance Commissioner for the State of California, and all my work in the high tech world. All of that had to do with deploying disruptive technology to solve a major problem. Even my work with the charter school movement has a lot to do with technology. That's the common element. In my time as Insurance Commissioner, we had 1300 employees at the California Department of Insurance. It was a very paper oriented organization when I got there, and it was paperless by the time I left. That's had a big impact on the costs and productivity of the great department there. Now that I'm back in the private sector, that's exciting too, as I'm always on the lookout for ways to have an impact by organizing teams and deploying technology to make a difference. Now, I'm in the not-for-profit sector, as my full time activity. I'm a volunteer, running the Alliance for Southern California Innovation. My current job falls into all three of those buckets in some respect, which is why it's an interesting activity for me. It's a not-for-profit, but we work closely with academic institutions, need to coordinate with city and county officials, as well as the private sector. It's all about empowering the private sector to help expand in Southern California, and the opportunities are great.
Finally, back to the Alliance, what are you doing now, and what are you hoping to do next?
Steve Poizner: We just started, so we're a startup. We had our first board meeting on July 20th, and our second on September 28th. The last one, we had 28 people on the call, which wasn't easy, but turned out great. We how have the Boston Consulting Group helping us pro-bono on our strategic plan. Our board unanimously approved our plan of action in September, and now, we're in implementation mode, and focusing on some flagship events in 2018, which are really focused on the entrepreneur. We'll have more to announce soon, once we finalize dates, plans, and location of those events.
Thanks!