Santa Cruz, the City Over the Hill, Works to Build Its Own Startup Culture

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a startup employee duck out for a lunchtime hike. “This is one of those rare cities that are surrounded by beautiful open space,” says Brent Haddad, an environmental engineer and former energy entrepreneur who now directs the Center for Entrepreneurship at UC Santa Cruz. “You can be on a path through the redwoods and minutes later you’re on a white, sandy beach.”

Then there’s the food. With its proximity to Watsonville and the Salinas Valley, one of California’s lushest farm valleys, Santa Cruz is home to some of the longest-running farmers’ markets in the country, and it is arguably the world capital of the organic/sustainable food movement and the “locavore” concept (eating food that’s locally produced). The Center for Agroecology & Sustainable Food Systems at UC Santa Cruz “basically invented organic farming,” according to Neuner. Odwalla, the fruit juice and smoothie giant now owned by Coca-Cola, was founded in Santa Cruz in 1980, and the city is also home to the Coalition of California Organic Farms.

The university itself counts as one of Santa Cruz’s biggest assets—and by far its largest employer. In addition to its agricultural work, UC Santa Cruz is a leader in areas like marine biology, genomics, and gaming. Bioinformatician David Haussler led a team that completed the first sequences in the Human Genome Project, and the UCSC Genome Browser developed in Haussler’s lab is essentially the Wikipedia of genomics—an open-source repository of gene sequence data across dozens of species. The crown jewel of the university’s young Baskin School of Engineering is the Expressive Intelligence Studio, which is routinely ranked as one of the world’s top graduate game design programs.

Local specialties like surfboard manufacturing and organic food may not sound particularly high-tech. But you might be surprised how much computer-aided design and material science know-how goes into a surfboard these days—and Neuner thinks there’s room for technology entrepreneurs to use e-commerce, mobile, and other digital channels to spread the Santa Cruz brand to the world.

“When people think about Silicon Valley, they think technology, and that’s great,” he says. “But here you can think technology, sports, recreation, tourism, marine sciences, organic farming, and the locavore movement. All of that is what makes a rich opportunity for us to stand out, not just against Silicon Valley but against the world.”

In Part 2 of this story, we answer Fogelsong’s second question: how strong is Santa Cruz’s legacy of successful companies and entrepreneurs? Part 3, coming August 1, will look at the third question, about the city’s supply of talent, as well as efforts to reverse perceptions that Santa Cruz is anti-business.

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Wade Roush is a contributing editor at Xconomy. Follow @wroush

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