Wade Roush, in his xconomy newsletter, has just finished a 3-part series on startup culture in Santa Cruz: Santa Cruz, the City Over the Hill, Builds Its Own Startup Culture
While it’s close enough to exist in Silicon Valley’s shadow—serving as a bedroom community for thousands of people who commute to the Valley for work—it also has a unique and fiercely defended identity, and aspirations to stand alone as a business and technology hub. The dilemma for entrepreneurs and city leaders in Santa Cruz is that they would like to emulate Silicon Valley’s growth and success without giving up what’s special about their community—things like its culture of outdoor recreation and lefty individualism.
The 3 articles mention several of the historical successes of Santa Cruz (Seagate, Borland, SCO, Odwalla, Plantronics, …), many of which moved out of the County for either cheaper places (Odwalla) or more connected places (mainly to Silicon Valley). Plantronics is the only biggie he mentions that has remained loyal to its roots.
He does talk about UCSC as a driver for technology and a highly educated workforce, but only mentions one UCSC spinoff (FiveThree Genomics, started by grad students from my department). I thought that several small game companies had been started by UCSC grads, but perhaps they are staying quiet (or have already run out of funds).
He focuses more on the co-working spaces (NextSpace and CruzioWorks) downtown, which are serving as incubators for several small startups. He does mention Makers Factory, which is pushing 3D printing to jumpstart local teach innovation, though I believe that Makers Factory has been more successful with their children’s classes than in signing up adult members.
Personally, I think that Santa Cruz is an excellent place to start an information-based business (like a computer game publisher, software publisher, or electronics design company), but a lousy place to start a company involved in the large-scale movement of physical goods (manufacturing or shipping), because of the rather limited access for trucks. The agricultural shipping from the county is already saturating the available freight capacity. Of course, a lot of businesses nowadays rely on outsourcing their manufacturing (often to China) and their distribution (often to Amazon), so the limited physical shipping capability should not be a major limitation for a Santa-Cruz-based company.