Can Tech in Oakland Become More Inclusive?

A new business incubator that plans to help hardware startup companies is part of a larger effort to grow manufacturing jobs in the city.

Not long after Jeff Wilcox abandoned his federally quashed medical pot farm business, the entrepreneur scanned his seven-acre facility on Oakland’s central waterfront, trying to imagine how to revamp a site once slated to be a 60,000-square-foot marijuana “mega-grow.” Having already made a fortune in the construction business, Wilcox knew he could easily level the buildings on the site, build six hundred condos, and sell them off for millions. But for Wilcox, the founder of more than a dozen companies, that would have been too boring — and it wouldn’t have done enough for Oakland. Wilcox instead saw his property as a new hardware technology incubator called BlueSprout.

“I thought, ‘No, Oakland doesn’t need more condos; what we need is more jobs and a tax revenue,'” Wilcox said. “Then I looked across the bay at what was going on in San Francisco with the tech revolution and asked, ‘Why isn’t this happening here?'”

BlueSprout is an effort to cultivate local technology and fabrication talent by providing investment capital, mentorships, and leasable spaces to select startup companies. Although BlueSprout is open to helping software startups as well, its co-founders see their company mainly as an incubator for hardware and fabrication — one of the few spaces in the Bay Area that would prototype and manufacture small lines of products.

“The basic idea is rejecting the notion that Oakland is not a tech hub, and being the pioneers to say, ‘We’re gonna do hardware incubation, we’re gonna go out and source the ideas from other companies, support them, and bring it down to a local level,'” Wilcox said. “You hear all these excuses: Oakland doesn’t do tech, we have this bad PR thing, but in actuality Oakland has this manufacturing background.”

Once the manufacturing site for the old Bay Bridge’s wire cables, the 60,000-square-foot BlueSprout building will offer co-working space, seventeen work-live units, and factory space with complex manufacturing equipment, including 3D printers, CNC machines, laser cutters, and industrial robots.

As venture capital has become a more lucrative investment in the recent economic rebound, incubators have been popping up in increasing numbers throughout the Bay Area. Generally, an incubator is defined as company that increases the chances of a startup’s success by providing it with investment capital, amenities, and mentorships. Wilcox said BlueSprout was influenced by Tech Stars, a Boulder, Colorado-based incubator, and Y-Combinator, a Mountain View incubator responsible for mentoring and investing in successful startups like DropBox and Reddit.

But Wilcox and BlueSprout’s co-founders said their company differs from traditional incubators because it isn’t founded on a venture capitalist model; they aren’t looking for investment opportunities that turn into “homeruns.” “Our strategy is to hit singles and doubles,” Wilcox said. “And eventually, you load up the bases … hit another double and you start bringing in runs.”

The co-founders also say their company will be more supportive of businesses in the incubator, allowing them, for example, to have longer, more flexible timetables to complete projects. “Where Silicon Valley is really picky on what they do, we’re kind of not as picky,” Wilcox explained. “Part of it is because we’re Oakland, and we’re not venture capitalists, and we don’t have shareholders who want a maximum return on investment.” Although BlueSprout plans to take a minimum of 5 percent equity from businesses in which it invests, Wilcox said the actual percentage each startup will pay will be a “sliding scale based on a company’s size and needs.”

As creative types trickle out of San Francisco because of out-of-control costs for housing and workspaces, Oakland has become a home for more fabricators, DIY makers, and hardware startups. In the last few years, the so-called “maker movement” has built significant momentum with groups like NIMBY, American Steel Studios, Hollis Works, and the umbrella organization Oakland Makers, as well as hackerspaces like Ace Monster Toys and Sudo Room.

“After the first dot-com bubble, many of the artists who lived in SoMa can no longer afford to live there, because many of those spaces have turned into restaurants, cafes, clubs, and condos,” explained Justin Quimby, videogame engineer and co-founder of BlueSprout. “Where are they going? Across the bridge to Oakland.”

BlueSpout co-founder Jeffrey McGrew, also the owner of an architectural design and fabrication business in Oakland, searched for manufacturing space in San Francisco but was snubbed by landlords who wanted to lease their space for offices. “There’s not a lot of interest from landlords because you can get more money per square foot with offices,” he said. “Offices are in high demand because of software tech.”

But important concerns also are being raised about “spillover” from San Francisco’s tech sector exacerbating gentrification in Oakland and other parts of the East Bay.

Margot Prado, senior economic development specialist for the City of Oakland, believes that a revitalized manufacturing sector will produce jobs that have the potential to be filled by low- and moderate-income residents of the city. “The real jobs will come when people have access to production level jobs,” Prado said. She further explained that much of this can begin with hardware incubators and fabricator labs like BlueSprout.

Prado, also a co-founder of Oakland Makers, co-chairs the $5 million Bay Area Regional Prosperity Plan, which in part identifies industries of opportunity that can create career pathways for low- and moderate-income workers. Hardware incubators and fab labs, she said, fit into this plan, as they can grow and attract larger commercial manufacturing enterprises, which, in theory, would provide more inclusive middle-income jobs.

Prado helped preserve patches of industrial zoning in Oakland through an earlier project called the Central Estuary Plan, which expanded mixed-use, commercial, and light and heavy industrial zoning in what is called the “Central Estuary Area,” encompassing 425 acres on Oakland’s central waterfront (19th Avenue to 54th Avenue and Interstate 880 to the Oakland Estuary). BlueSprout is located in the “Mixed-Use Triangle” of the Central Estuary Area, which gave the company the proper zoning for its live-work and industrial model. The mixed-use zoning also extends to surrounding areas, into which successfully incubated companies can expand.

“It would be fantastic if we generate companies that outgrow us,” Quimby explained. “When we talk about this project, people are excited about it because we’re bringing jobs to Oakland, mentoring companies, and mentoring other folks.”

BlueSprout is working with Laney College to create classes that teach college students fundamental manufacturing skills, which Prado said is essential for growing a significant manufacturing sector. “We have so many professions in the middle that don’t require a four-year degree,” she said. “We have to realize that people have different propensities for work, and that some people aren’t inclined to work in front of a computer screen.”

Danny Beesley, an independent digital fabrication consultant, has been working to connect Laney College with BlueSprout and other fabricator labs in the East Bay in an effort to promote education for students more inclined for creative, hands-on work and potential careers in manufacturing. “It’s a bit of a dream come true,” Beesley said of BlueSprout. “Having a shop down the street with better machines is very useful.”

BlueSprout will host its public launch this summer, and its co-founders hope that, in time, the company will expand to use Wilcox’ entire 160,000-square-foot site. “We think that there will be other folks who do similar spaces, but one of the big differentiators between us and them is scale,” Quimby said. “I mean, seven acres. It’s hard to get seven acres anywhere.”


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