Why Oakland’s a tech start-up game changer - asiamediaamerica.com


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Entrepreneurial activity inspires many


  Oakland-based Mindblown Labs put gaming into education and garnered the largest Kickstarter campaign for any mobile game ever. E-commerce site Mayvenn found an unserved market and is growing 40 to 60 percent a month in revenues, and GroupFlix is already being described as another Netflix, prelaunch.
  These tech start-ups are all in Oakland. And they were all started by African Americans.

  There’s a burgeoning tech industry in Oakland, with a host of startups joining a dozen midsize tech companies and Oakland’s two technology giants, Pandora and Ask.  Oakland is becoming a place where tech happens, not on the scale of San Francisco or Silicon Valley, but enough to be a contender when startups figure out where to locate.
  What’s more, and a potential game changer in technology, is that Oakland’s tech industry appears to be more diverse than the largely white male and Asian male tech industries across the bay and down the peninsula, based on the concentration of start-ups by people of color and women in the small tech eco-sphere here.  SleekGeek was started by a Latina, XEO Designs by a woman, 2Locos by a team finding that their Latino lifestyle tastes are unanswered on e-commerce sites.
Also, start-ups in Oakland are often driven by a social mission. Mindblown Labs aims to teach youth about financial literacy. GoldieBlox, started by women, hopes to inspire young girls to become engineers.Qeyno Labs, started by another African American, is a career discovery game for underserved kids needing mentors. Solar Mosaic is making solar electricity affordable for regular people and non-profits.Impact HUB Oakland is providing a collaboration and innovation workspace for multi-cultural tech endeavors. Sleek-geek hopes to get kids more engaged in learning science through mobile apps.
  “You see a lot of education start-ups planting roots here and some other social impact oriented start-ups, so you have a differentiating number here,” said Jason Young, co-founder of Mindblown Labs as well as theHidden Genius Project, which teaches coding to young African Americans.  “It doesn’t hurt that we haveKapor Capital and New Schools Venture Fund,” two venture capital firms interested in funding initiatives that widen opportunity.
It’s also no accident that his non-profit the Hidden Genius Project is located here, or that Black Girls Codewhich teaches young girls to code, moved here. Indeed, President Obama invited two Oakland tech opportunity makers to his “My Brothers Keeper” initiative launch, along with Oakland’s Mayor.
  At a time when the tech industry is sometimes vilified as elitist and indifferent to the housing needs and community ties of the average Bay Area worker, Oakland may be spearheading a more inclusive chapter in technology industry growth.  The firms mentioned above are just a partial list of those started by people outside of the usual tech demographic.
  But for Oakland’s tech industry to continue to grow, and do so in the quintessentially Oakland way as a diverse and social mission driven sector, will take intention, many experts say.
“Oakland is still iterating, the story is still largely being written,” Young said. “In terms of maintaining diversity and social impact, that definitely has to be nurtured,” he said. Otherwise, it could just be a San Francisco spill over.
Cedric Brown, managing partner of the Kapor Center for Social Impact, which moved here to pursue its mission of fostering diversity and opportunity in technology, agrees. He sees Oakland’s “rich social justice culture, its Silicon Valley proximity, its racial and ethnic pluralism and its open ended sense of possibilities,” as its strengths. But they won’t drive business.
  “The fact that this will become a hub for black and brown tech innovation will not be by accident,” he said. “This community is working deliberately to ensure that Oakland has – and keeps – the resources talent and vibe that empowers people of color in the innovation economy. The Kapor Center certainly aims to play a catalyzing role in that vibrant community.”
  Plain supply and demand economics of commercial tenants pursuing cheaper rents drove many Oakland tech companies to launch here. “Rent is substantially cheaper here than in San Francisco which is where most startups are. People are starting to choose here instead. I see more people moving to this side of the bay,” said Rockbot founder Ketu Petal, whose firm chose Oakland for its affordable rent. Rockbot sells an app that allows restaurants to offer customers the ability to choose ambient music from their iPhones.
“I am seeing techies move out here, in large part because it is cheaper to live here than in San Francisco and more convenient than living in the South Bay,” said Kurt Collins, founder of virtually-based Enole and another co-founder of the Hidden Genius Project.
“There are minority entrepreneurs moving to Oakland, so it is more diverse than, you know, San Francisco and more diverse than the Peninsula,” he said.
“The thing is, there‘s a difference between a start-up industry and a successful start up industry,” that grows to a midsize industry Collins said. The latter, he said, needs investors ready to help companies grow and networks of people with money to invest.
  What Oakland does not have yet is well developed networks of moneyed investors and experienced entrepreneurs, that is, a critical mass of people ready and able to invest in what they see going on around them. Start-up entrepreneurs in the Valley and San Francisco tend to rely on wealthy friends and family to fund their ideas in the early days to get their tiny start-ups off the ground, several people in the industry pointed out. Sometimes those moneyed friends are employees or former employees of tech companies that have gone public, creating a lot of wealthy employees.
  “You have entire networks, like the PayPal mafia,” of PayPal employees who cashed out their stock options when PayPal went public and then put their money into friends start ups, said Collins.
  Then, if a startup  idea proves minimally viable as a business, it can turn to angel investors as it grows, and on up the investment pipeline to venture financing and eventually to the public markets.
“There’s a Facebook mafia and a Twitter mafia,” Collins said.  “YouTube wouldn’t have happened without the PayPal mafia,” that provided the start up cash, he said.

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