By David M. Greenwald
Davis, CA – Last November the city entered into a loan agreement with Inventopia with a provision of $100,000 to expand their operation in order to provide lower cost of spaces for startup businesses. On Tuesday, Tim Keller, the director of Inventopia, gave a presentation to council about how things have progressed.
“What does the city want to see within that with a business incubator?” Tim Keller asked. The council originally said that they wanted him to “keep three jobs in town.” Keller added, “we’ve done way more than that. We’re now serving about 23 companies. Almost all of these are UC Davis related.”
He continued, “Davis is one of those towns where we really don’t have to do economic development in the way that a lot of cities normally do.” He explained, “We don’t have to bring companies here from the outside, because we generate them. We spew them out at a high rate.”
He noted, however, that some companies, a lot of them in the bio sciences, are “where the R&D primary investigator is in a different town, and they’re here because they want access to UC Davis postdoctoral talent.”
Others are based in the Bay Area but are here “because it’s less expensive.”
But he said, “that’s not exactly the demographic that we’re trying to do. But, it’s keeping the businesses that we have here and even bringing some additional 
money in from the outside, which is all great.”
Tim Keller explained that they now have a problem—but the right problem to have.
“Just a few months after opening this lab space, it’s almost completely full. And so we are going to just, right after we do this grand opening, we are going to be right back looking for more space.”
He continued, “I keep on getting more requests. I’m signing letters of intent with people who are going for SVIR funding, that engine of economic innovation that is the university and the tech transfer process is not stopping and there’s more work to be done.”
Councilmember Dan Carson noted that Keller has “sort of a unique insight into our innovation ecosystem around here.”
Carson said, “There had been all sorts of predictions by some local folks last year that we wouldn’t need this kind of commercial space for these, these kinds of enterprises. You filled out, of course you’re the incubator.” He asked, “Do you think the midsize companies that emerge from this and the large scale advanced manufacturing that we’d love to get in the city for some of the products these folks are inventing, is there still a need for that in this, in this city, if we’re going to be plugged into this world?”
Tim Keller responded, “Yeah. I mean, only if we, once there, you know, reap the benefits of having that kind economic activity here.” He explained, “I guess we don’t have to hold onto the businesses that we start here, but I do think it’s in our best interest to. It is a slow grow kind of thing. The companies that are in the incubator phase are very delicate.”
Tim Keller mentioned Interplant, saying he fought very hard to keep them in Davis but they almost left for West Sacramento. “They make plants that are living sensors, so they will actually grow a little bit in response to environmental stress,” explained Keller.
They have well-funded principals in the Bay Area, but they also rely on plant geneticists.
“Where do you find them?” Keller asked. “You find them in Davis. So all of their lab stuff is here and they ended up going in the the Buzz-Oates building that Arcardia Biosciences is in—but that took them six months.
“I worked very hard to try to make a space for them,” he said. “They have most of our Fifth Street location right now so that they can bridge the gap and stay in Davis.”
Keller said overall, “It’s not the case that we need to put in a billion square feet of heavy industrial tomorrow. But we do need a plan for how do we retain these companies. Just in the way that, I know some of you probably have been involved in trying to retain companies like Schilling in town, right? It’s hard sometimes when companies are growing and they’re outgrowing your town. It’s hard to retain them.
“So we do need a robust plan for how do we keep the companies that are born here living here.”
Dan Carson said, “People will post on the internet all sorts of things, but they will post for-rent signs for office spaces and things like that and then argue that this proves we don’t need an innovation center—what is your assessment of the true market potential for us, for innovation space, including wet labs and those sorts of facilities?”
Tim Keller explained there are two sides of this innovation space issue. One is commercial, large company economic development.
He said, “Those kind of entities that are coming here from the outside because they want to hire Davis researchers. There are some good opportunities for them, and there are some vacancies in town that people like that can take advantage of.”
He said, “We do need more, we need to make sure that there’s a constant supply of that. But that is for, that’s for companies that are already established and they have a lot of good credit.”
He said that’s not bad and that we need and want that to happen.
“But on the end that I deal with, which is the startup companies, the ones that if they don’t start here and start doing their initial phases here, then they will leave. And when they do leave, they don’t come back.”
He said, “I’ve seen the post that you’re talking about with all the for lease signs… a quarter of those signs were for retail space, which costs too much and the city doesn’t want to put lab space in a retail location because we want the sales tax revenues from actual retail spaces.”
He also said there’s a bunch of professional office buildings that are marketing to lawyers and accountants, and those kinds of landlords, he said, do not want lab type uses because they requires ventilation and holes and upgrading the electrical power and the like.
He explained, “We’re kind of a high needs constituency because we have a lot of equipment and most landlords and most of those kind of mid-scale and commercial spaces, even though they are professional space and office space, maybe even called medical space, they don’t work as lab and they don’t work as engineering space.”
What they need is R&D flex space.
And while there are some in Buzz-Oates and Interland (now University Research Park), “there is very little supply of them actually.”
He said, “If we want to continue the growth of the innovation economy here in town, we are going to need more small incubator space.
“We’re full now, I don’t know where we’re going next,” he said. “So yeah, there’s not enough space for this kind of stuff.”
He added, “We need to have a pipeline for that, for sure.”
—David M. Greenwald reporting
We need to retain them because the scale of the economic benefits they bring to the city increases as they grow.
Ron, does the scale of fiscal benefits that they bring to the City increase as they grow? City with a capital “C” as opposed to city with a lower case “c”
Only if they stay
Yep, 100%.
I get criticized for being involved in the arguments for having more corporate space here because inventopia in its current form or even in its desired future form “couldn’t fill DISC” But that isn’t the point…
We are a waypoint for companies who are starting and putting down roots here, and who by definition will leave Inventopia when they are successful and get their own space. This is good for the city to a small extent in the short term, because it means that these Davis residents are staying in town, spending their money in town etc… But the BIG upside for the city happens once they leave inventopia and become profitable in their own space and they start paying their sales taxes here.
If we cant provide “graduate space” for the companies I serve and they end up leaving town after they outgrow inventopia, then we will have failed to realize the biggest benefit of what I’m doing.
This needs to be a full-lifecycle strategy for Davis, and that strategy needs to include a reliable supply of scale-up space in this town which is tailored to the kinds of industries that this town produces.
i agree 100%. Especially the full-life-cycle strategy
Finally some discussion about Demand. I don’t disagree with the points Tim has made, and I applaud him for his work and will publicly support that work. Beyond the actual work, he has done what no one else has done … engage the topic of Demand.
The discussion of Demand needs to go beyond just a discussion of Inventopia and its target tenants. As was discussed in the fall election in order to be financially viable DISC needed to fill over 90,000 square feet of tenants who are paying Market Rate rents each year for 25 years. Essentially all of Inventopia’s tennants are unable to afford Market Rater rents … a problem that Tim’s Inventopia model is able to solve. The aggregate space Inventopia is looking for is immediately 50,000 square feet, with hopes to grow to 200,000 square feet over time. In the 25 year DISC model, that amounts to half an initial year and, if realized fully, 2 years out of the 25. That leaves 23 years of demand that still needs to be illuminated.
Because of the above, I do think Tom Keller is tightly focused on Inventopia when he says the following, and not looking at the whole demand picture.
The good news is that the community discussion has begun. The bad news will be if the City takes the approach that the other 23 years of Demand don’t need to be clearly delineated in an actual Economic Development Plan that the public can read and understand.
No problem. The city just needs to provide a whole bunch more loans to “non-profit” companies such as Tim Keller’s (which can’t get loans anywhere else). They should also “time it” right before the next election (like they did last time), to “prove” that there’s demand.
And then, be sure to have a couple of council members actively campaigning for it (as a result of those low-interest, high-risk loans proving “demand”), like they did last time.
https://davisvanguard.org/2020/11/council-supports-expansion-of-business-incubator-inventopia/
But just don’t expect the city to get that money back, as they “expand” that loan program.
How large is Tim Keller’s existing space, and what would occur to it if he vacated it in favor of another DISC attempt?
Sure seems like there’s a new campaign occurring. Has there been an announcement? Or is this all some kind of enormous “coincidence”?
Yeah – he’s actively “seeking them out” via his website – for his “next location”.
https://form.123formbuilder.com/2962526
Given the goals, purpose and directions of some “non-profits”, I’d suggest that the federal government reconsider the requirements for qualification. I, for one am increasingly uncomfortable with the results. Not to mention inappropriate city involvement.
Ron, I dont know why I feel the need to defend myself from your conspiracy theories, but let me make something clear since you dont apparently know how this works.
1) Inventopia, a non-profit which does economic development work which benefits the city, took on a 5-year loan to build out a space which we have a 5-year lease on. We are repaying that loan with interest. Its a win-win for everyone.
2) If we found a place to expand and needed another loan to do the same thing somewhere else – we would STILL have to pay the existing loan.
3) Your tinfoil hat is fitting a little too tight I think.. If we found an opportunity to have a much larger campus somewhere and we negotated our way OUT of our space we are currently in, we would STILL have to repay our city loan.
Its really strange to me that you see conspiracies everythere when the motivations for what everyone is doing is just plain as day: I help startups. There isnt enough space for startups, so I advocate for more. Not too hard to understand.
Given the “check-in” by the council and the repetitive Vanguard articles, seems highly likely that another campaign is beginning. Or, is this all just some kind of enormous coincidence?
Does the city council normally “check in” with individual businesses, to see how they’re doing? While providing an opportunity to claim that you’re “full” (while they simultaneously critique existing, vacant space)?
(The usual, “this space is too hot”, “this one is too cold”, but this one – where there is no development or infrastructure, is “just right”.)
Must be nice having a non-profit status, backed with city money and council members interfering in elections. Seems that they pursue continual conflict, rather than peace.
I noticed that you didn’t respond to any of my questions. Maybe you can do so, rather than falsely claim that I’m engaging in conspiracy theories. I’m just looking at the facts.
Again, how large is your current space?
I asked to present last night because I wanted to say a VERY PUBLIC “thank you” to the city council for approving the loan last year. We could not have done what we did without them, and I felt it was important to acknowlege it publicly. As an entrepreneur, I always keep my investors fully informed as a matter of course, and for inventopia, my investors is the City and the university. I do my best to communicate with both in a proactive manner.
Is there another campaign coming up? Probably. I explicitly said last night that we are going to start looking for more space pretty soon and that we might come back to the city for more help in a second expansion. Given how tight the real estate market is in this town, I would rather that they are “ready” to help when / if we can find another opportunity, AND I want them to be aware of our needs in case they hear about an upcoming vacancy before I do.
Nothing nefarious… I really dont understand your concern.
Regarding size: We have 2000 square feet of Lab, 1000 square feet of co-working office space, and 3000 square feet of engineeing / prototyping space.
We also have 2000 sqft at our “old” location half of which we are vacating this month as we finish the shop space ( and the landlord already has another tenant waiting ) and the lab half of our old space we will lease until the end of the year.
The 2000 sqft of wet lab is what we opened last fall and filled up just recently. The engineering space is finishing up right now and we will be trying to fill THAT in the coming months.
[edited]
Given that I’m not a “conspiracy theorist”, I should “probably” assume that there’s no connection between these events. Even though it was only a couple of weeks ago or so that you said that the DISC developers weren’t coming back. (Around the same time that the new push began, again.)
By the way, did you actually submit anything in writing to the council during your presentation last night, including the graph above?
Given how tight the real estate market is in this town,
Define “tight” in regard to commercial vacancies, vacant land, and underutilized space. (But, do it quickly, before the city converts even more commercial space to residential.)
Regarding the space you occupy, I’m finding your list a little confusing. Sounds like you have somewhere around 6,000 feet (including 2,000 square feet of “wet lab” that’s almost filled, and 3,000 square feet of engineering space which is unfilled).
In any case, none of this sounds like a massive “innovation center” is needed to accommodate your desires, assuming you even stay in Davis. Seems to me that you could theoretically fit everything into a large house or two, in terms of visualizing actual square footage.
Assuming that there is a new campaign (again, which was denied about 2 weeks ago), you probably have a very long wait for anything to be ready for you. Assuming they even provide you with needed gas lines, etc. – which are already available at other sites. I may not be a businessman myself, but “waiting” for a possible peripheral development in Davis does not seem to be a sound business plan, for a business that claims to be growing. At least, not when there’s a plethora of other options available, nearby.
I’d check West Sacramento, first. Probably can get an outstanding deal, with everything you need (and adjacent to the Capitol city, as well). Plus, you won’t have to wait for 10 years, or continue subjecting yourself to campaigns. Instead, you can focus on your actual business, and leave politics behind. I, for one – would wish you the best in that venture.
No Ron, there is ZERO connection between my appearance to thank the City for supporting us and anything like a new innovation center campaign.
Yes, the discussion of what I do on a day to day basis automatically calls back for a number of people the arguments around DISC, which apparently has not left the City’s sub-conscious yet.
I help startups find startup space whether or not there is a campaign for an innovation park underway. There is NO connection. GOT IT?
Finally, im going to say TWO things very bluntly so you can just STOP asking the same questions you keep asking:
A) Inventopia’s CURRENT size is a fraction of what we intend it to eventually be. Which is on the order of 100k-200k sqft. So stop judging the LONG TERM space needs for innovation purposes based on what we currently have. You consistently try to weave this narrative that innovation space isn’t “actually needed” But you are wrong, and it is a reality that I live every day. Whether or not you understand that the need is real just doesn’t matter.
That said, Inventopia is level 1 of at least a 3-phase development plan that you need to accomodate startups in this town:
1) “Bench Scale” stuff… is what people do at inventopia.
2) “Pilot scale” stuff people need their own, small, and flexible private space to bring in equipment, set up larger scale processes and start actually producing small amounts of whatever product is needed for customers.
The companies that have graduated from Inventopia in this kind of way typically move into their own, small units in spaces like the commercial park on Olive Drive… Generally 1-2000 sqft.
3) Production Scale is a long-term real estate deal for establishing in one’s own “factory” Look at east 2nd street for companies that have gotten to that phase. Expression Systems, Resonetics, DMG Mori, Schilling Robotics and others.
If we DO end up getting a stab at another innovation park, it will need to include ALL of those tiers. THAT is the only way we can start companies here AND hold on to them long-term. So your constant suggestion that something of that scale isnt actually needed is just wrong. Read this as many times as you need for it to sink in.
B) NEVER suggest that I should take inventopia to woodland or West Sac again. Why don’t YOU move? The entrepreneurs I house here at Inventopia are 90% Davis residents and/or Davis Grads. Their employees are the same. They deserve to be able to start their company in this town AND work in the same town where they live.
Saying “why dont you go to west sacramento” You are saying ” I dont want do deal with change / or some other minor annoyance.. so why don’t YOU get in a car and live your professional life elsewhere.” The selfishness inherent in that position is unconscionable, and what is more, it is a thinly veiled middle finger to EVERYONE in my community. So forgive me if my reaction is simply to return your courtesy in-kind.
From the November 17 staff report: “Inventopia has requested a $100,000 loan (the “Loan”) from the City, to be paid back over a five year period, with interest accruing on the outstanding amount at three percent per annum”
Thanks for the elaboration, David…
As I have pointed out several times over the last few years, including an article in the Vanguard (David, can you please put me in your index of authors so I can find these articles easily?), that “demand” from established companies does exist in California. The Bay Area is the hottest location for new food products. Both Beyond Meat and Impossible Foods are based there. But they aren’t going to just mosey along into Davis. We can’t be passive in recruiting these businesses. It’s going to take a concerted recruitment effort from the City government, probably in partnership to property owners and/or developers. We briefly had someone on staff who was familiar with this type of effort, but we don’t at the moment. Our current staff is oriented toward serving existing businesses, but those businesses aren’t generating a sufficiently sustainable level of economic activity.
We’ve probably gotten spoiled since TechNip, DMG Mori and others are largely home grown firms that have been acquired by bigger ones. Marrone and Resonetics are other local firms, but we haven’t had a large significant company move to Davis without an anchor firm already here and stay. We’re like the people Barry Switzer was thinking of: “Some people are born on third base and go through life thinking they hit a triple.” Our business history to this point fits this to a “T”. It won’t last.
I think we will do just fine with attracting companies here if we have shovel-ready space for them. I really dont doubt that for a moment. NaySayers always say “where is the LOI ? Where are the people asking to come here?” – without realizing that no business who MIGHT want to move here actually works that way. They will contact a broker, or just hit loopnet ask what is avaliable, and if the answer is “nothing” then they move on. They dont register a complaint with the “city department of missed opportunities..” they just never say a word and look elsewhere.
That said, even if we never get a “beyond meat” to move here, we DO have plenty of homegrown companies in those kinds of hot sectors, and they WILL stay here if we make room for them. We just need to make the space for them, and be patient.
David, did you notice that the city council effectively became an extension of a Vanguard comments section last night? I thought that was kinda funny.
I did and I agree. found it amusing.
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Council Member Carson clearly has not understood what was being said in the “all sorts of predictions by some local folks last year.” I followed the Measure B election very closely and I do not know of a single “local folk” who said there was ZERO demand for Inventopia-like incubator space. What was said by a whole lot of “local folk” was that there was not demand for 200 plus acres of Inventopia-like incubator space. Tim Keller has stated several times that what he is looking for is 50,000 square feet, which calculates out to 1.15 acres. Tim has also stated on occasion that his long range goal is to grow to about 200,000 square feet … 4.5 acres (2.25 acres or less if on multiple floors of a single building).
I think where I take issue – is using the vacancy signs as any kind of measuring stick – which should have been put to bed last night. And second, the notion that there can be commitments from larger companies to join the park when prospects are uncertain and time horizon years off. Those are my central issues with gauging demand.
I have a significant problem with that dismissive approach. There is no substance to that approach. The City should have:
(1) an inventory of all the vacant space,
(2) a duration chart of the vacancy,
(3) an impact assessment of each vacancy on the economic profile of the City as a whole, which of course is part of an Economic development Plan,
(4) a profile of the most recent occupant of each vacant space, and what their loss means to the economic market niche they occupy,
(5) a strengths and weaknesses assessment of each vacant space,
(6) a target tenant profile that the City would like to see occupy the space,
(7) a target milestone for when the space is expected to be reoccupied.
I doubt that the City has any of those seven key pieces of strategic and tactical information. You may even have some of them, but I doubt that you have more than a couple. This is more of the same rudderless ship being tossed about randomly on the seas that characterizes the City’s Vision of what it wants to be in the coming years … no Vision.
If the City had a Vision then people, both within the City and external to it, would understand the City’s Strategy of where it is headed. If the City also had an Economic Development Plan then people, both within the City and external to it, would understand the City’s Tactical approach to making the Strategy happen.
Strategy and Tactics … the City doesn’t have them at the highest level … and it doesn’t even have them at the simple level of understanding what vacancies in its existing infrastructure mean. The lack of Strategy and Tactics is also why annual growth rate of the City’s Costs (between 4% and 5%) is almost double the annual groowth rate of the City’s Revenues (between 2% and 3%). The lack of Strategy and Tactics is also why each budget year begins with a plus or minus $10 million Shortfall of needed Costs/Expenses over available Revenues
Those are my central issues … and for the most part they are not new issues for the City. Some of them have been in place for multiple decades, but nothing has been done about them.
Sounds more like a “nice to have”… ‘wanna’s’
Most of your ‘wanna’s’ are intrusive at best, and not a proper activity of government, in my opinion… and the resources to finance all the collection of data (even if it was available!) and keeping it up-to-date? Where are those $$$? Seems speculative, at best. And even if the data was available, collected, and up to date, analysis, action plans?
If those are your “central issues”, it undermines the two next to last paragraphs… which have some good merit, but not if underpinned on the foundation of your “data gathering/analysis”…
People like Jim Gray, Tom Shipley, Don Lewis (ret.), Buckel (worked on acquiring the Mori/DMG projects), others, are good at that stuff… not City staff, and the City hiring them as consultants? Where’s the $$$?
This sounds like a lot of work to no particular avail.
When we were looking for commercial property in Davis, we went and spoke to real estate brokers. We didn’t go talk to city staff. The ‘vqcqnt space’ inventory would have been helpful. Other than that, I cannot think why we would pay city staff to do what any good broker in town could do for a potential client.
Bill M and Don
Matt is dead on as to what the City’s economic development staff should be maintaining. This is not an expensive effort once the database is started. Perhaps some of the elements are a bit more than what’s needed on a continuing basis such as the impact on the local economy from the vacancy. (But that assessment should be done periodically, e.g., every 5 years or after a major economic downturn.) It will provide a number of benefits, not just in recruiting new companies, and it would be a relatively minor cost that will be paid off when the City gets one “hit.”
Richard… 5 years is far from “real time” for updates, current information… those in the know (prospective tenants and brokers) use more of a 3-6 MONTH window…
So, I understand your thoughts, but I consider them ineffective (and or expensive) in the here and now, and foreseeable future… we can agree to disagree, but your concept of an easy database thingy, is dependent on data that is changing much more frequently than once every 5 years, to be sure… would you trust an EIR analysis with data, particularly ‘traffic’, that is 5 years (or even 3) old? Do you make financial decisions or other decisions on 2-5 year old data? I know I don’t…
I am concerned about staffing/supporting/funding any City efforts along the lines of what Matt proposed, and you apparently support… I support his ‘visioning’ thing… where we want to be 2-5-10-20 years from now… but not the up-to-date data thingy… I question whether the data would even be available in a timely manner…
I agree to disagree…
I also stipulate that Tim Keller’s efforts, and results, are praiseworthy…
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Council Member Carson would know the answer to his own question if the City actually had an Economic Development Plan. Such a plan would have as part of its content actual statistics of the conversion rate of Inventopia-like incubator companies simply to the second level of development, as well as later to the more advanced status of mid-sized companies.
But the closest thing the City has to such an Economic Development Plan is a Dusty Springfield song title.
With that said, Tim Keller knows what is needed.
The part that I must be missing is this: If we WERE to approve a commercial development, why is it a problem that it might take 20 years to fill up? I get that there are going to be some costs to do basic site improvements, change some intersections etc – but that cost should be paid by the developer yes?
What am I missing?
Nothing… what you describe is pretty much what happened with University Research Park.
Interland knew what it was doing, and did not expect it to be fully built out/occupied in 5-10 years… that’s mainly why they financed most of the basic infrastructure with a “Streets and Highways bond” to spread out the costs, over time… worked out great. Slow, but great…
And like DISC (and all the other “innovation centers”), it has morphed into a housing development. And a butt-ugly one, at that.
https://davisvanguard.org/2020/10/mixed-use-project-at-university-research-park-goes-to-council/
I’ll remember that, the next time you bring up the vacancy rate regarding rental housing.
But an even better measure is all of the failed “innovation center” proposals/sites that came before, and which were subsequently turned into housing developments, instead.
Even the failed Davis Innovation Center added 1,600 housing units during its metamorphosis / relocation up Highway 113. And of course, the original site will now be (you guessed it) housing.
Get back to us sometime after the failed Davis Innovation Center (now the Woodland technology park) gets a couple of tenants, before you even start talking about “demand”.
Are you sure that a “campaign” isn’t starting, again?
By the way, how large is Tim Keller’s current space?
The truth is that there’s so much vacant commercial land in the county (e.g., in West Sacramento and Woodland) that it would probably accommodate all proposals until the sun swallows the earth. Even if they all turned into semi-housing developments.
And, they’re just the kind of cheap locations that Tim Keller’s clients would be looking for, along with Tim Keller’s company, itself.
[edited]
Ron….you do not know of what you speak as to University Research Park…
“And like DISC (and all the other “innovation centers”), it has morphed into a housing development. And a butt-ugly one, at that.”
The residential part of URP, south of Cowell, was ‘demanded’ by Mike Corbett and some CC allies, as a “cost” to approve URP (am thinking Corbett wasn’t on CC @ the time, but had influence)… Interland resisted, but knew the deck was stacked… Interland had no interest in residential in Davis… but when forced, they went ‘high end’ (for the time… Tanglewood was the first, as I recall) … to attract junior faculty and staff from UCD…
Except for the two motels, that came in late in the game, the only ‘residential’ that has emerged was the Fulcrum proposal…
Please at least try to get you facts straight… the rest, go ahead and rant…
I was “there”… I seriously doubt you were…
My bad… maybe a ‘senior moment’… only ONE motel… the other in the vicinity was not within URP… but across the street (Research Park Drive)… the one in URP came much later than the one across the street…
My congratulations to Tim on his excellent work at building and filling his incubator.
I get what Tim is saying but I think he’s spend too much time in his incubator based on this comment. Startups are great. But more than 9 times out of 10 they fail. Venture capital looks at their investments like modern day MLB hitters. They go for the home run and if they get a single or double…great but they’re going for a homerun. Now that’s also a function of their financial business model (the hockey stick graph of growth) but for the most part it holds true for technology based start ups in the bay area. Bio-tech startups in Davis? I suspect it might not be so heavily financially accelerated and maybe goes more the M&A route more than standard tech….but it’s still likely a risky venture/investment. Startups burn through their funding: grants, seed capital, angel funding, Round A..etc…but only a select few tend to actually grow to be successful companies. My point is that I wouldn’t use this specialized segment of business (startup/bio-tech) as the sole barometer for the future of commercial planning. I’d absolutely encourage these start ups to continue to grow (who knows maybe the future bio tech equivalent of HP will develop). But I’d just like to keep it in perspective.
So where does that leave us (Davis)? It leaves us with the need to find ways to encourage commercial growth beyond a niche (important but niche) segment. As far as businesses go….why would one want to move to Davis? If it wants to move into the Sacramento area…why not just move to Sacramento or one of the neighboring suburbs that aren’t constricted by a causeway. Employees of a prospective company might like the public school system….but I don’t think that’s enough to sway a company to come to Davis. How about a willingness to approve the build out of whatever specialized commercial a company wants? How about the willingness to build out homes nearby if the significant employer/tenant requests it of the city (this is different than DISC simply just building homes next to a commercial business park and hoping to fill it)….(keep in mind that I’m anti-residential growth…unless you give me a good reason…like economic expansion…to grow). I’m talking about a proactive business development approach that starts with:
“We’re ready to do business with you”
As opposed to:
“We’re Davis, these are the conditions in which you can operate here”.
I actually agree with that statement, particularly the word “sole”… but, as any craftsman, or handyman knows, it is imperative to have many tools, and some specialty tools, in your toolbox.
‘Ya never know when a specialty tool is exactly the one you need for the success of your endeavor… Dad taught me that… he had a micrometer in his… only needed it very occasionally, but it was sometimes the crucial tool… he also made his own tools, by modifying standard ones, when that was needful.
But specialty tools will not replace hammers, saws and screwdrivers… they do most of the “heavy work”… “Everything has a purpose, and the time for every purpose under successful economic development/fiscal health” (or something like that)…
There is also the theory that small wagers, with the prospect of huge winnings, is a bet well made…
Eh, it’s no different than the basic diversification investment strategy. Most people should not put all their money into high risk high growth stocks. Startups are almost like penny stocks in some ways. But I suspect (because I am not as knowledgeable in this sector) that these start up bio-tech/ag companies are somewhere between penny stocks and young high growth stocks in terms of risk. There’s a reason why the SEC (Reg D) doesn’t want non-accredited investors to invest in private placements (private funding) beyond 30 or so non-accredited investors….people that presumably don’t make complex investment decisions and/or can’t absorb the financial downside of such a risky investment. So start ups come and go…that’s their nature.
I don’t mean to sound like I’m bagging on Tim’s Investopedia Incubator. I think it’s actually awesome. It’s the kind of business development this area needs more of. I just think some perspective needs to added to how it fits in the overall commercial and residential planning in Davis’ future. Basically don’t depend/plan on start ups as the economic future of Davis…Davis needs to hope to plan and grow with mature companies too.
You arent wrong re: the number of startups that “make it” or the basic philosophy of diversification. I would agree with all of that. But I have over 20 businesses in my incubator at the moment, and that number doesnt include a few who have already “graduated” to the next tier. So I see it much more in a “cup half full” kind of way: Sure most startups are high-risk and will fail. But we DO have sufficient volume that expecting that we will start to amass a portfolio of successes here, IF (and only if) we can keep them in town.
To that, I would also add that success begets success. There is a new startup that joined this month which I cant say too much about, but is a second company from a couple of professors who already have a company in town who did a Series D round of 50+ million this year. I also have another about which is the 7th startup company from another prolific UCD researcher ( and is the first of his companies that he has actually been able to site in Davis) His first has already seen an exit.
When we get a track record like this, as a region, our ability to have more successes actually accelerates. It is easier for us to develop our own venture capital sources, we can retain a network of executives and advisors who can help with growing the younger companies… everything gets easier.
So all of this is worth doing, despite the high inherrent failure rate, and while I think that diversification of our attempts is indeed important, if we were to write a business plan for this town, it would HAVE to include an analysis of our relative strengths and weakensses right? We would want to focus on our biggest opportunities and look for the places where we have an unfair competitive advantage right?
What are those advantages? What can WE do better than any other city?
Well… I’d be interested to hear any other answers to that question. But my answers are two-fold 1) Promote the high tech companies that already start here 2) make room for companies that would like to operate here in order to access the talent in this town.
We can, and should do both.
But look at what “economic development” means in towns like sacramento, where they used to offer $100k forgivable loans to companies in order to relocate there. Do we want to do things like that? I dont think so Thats what I was saying. We dont need to worry for one second whether or not we will be able to lure a tire warehouse, or a lumber yard into our city limits.. We KNOW the kinds of companies that we can attract and we know, in general what they will probably need. What is more, they will seek US out. We just need to make sure the welcome mat is out front and clean…
Tim Keller has already acknowledged that many of his clients don’t want to (or can’t) pay Bay Area prices for space.
I wonder how many will want to pay Davis prices, even if they are successful.
Since this all relates back to DISC (as we already knew), Davis would essentially be kicking the door open for the same type of YIMBY’s who are suing the state, to increase RHNA requirements, and to “monitor” compliance with those requirements.
https://www.msn.com/en-us/money/realestate/san-francisco-s-jobs-to-housing-ratio-is-disturbing-here-s-how-wide-the-gap-is-getting/ar-AALTxZO
However, the difference in Davis is that it would lead to additional sprawl, not infill (as in the Bay Area). Keep in mind that RHNA requirements are largely based upon the amount of employment in a given area.
And since housing is generally a fiscal loser, the entire situation will essentially be an ever-larger dog, chasing its own tail. Round-and-round we go.