California’s Stealth Startup Hub
Tulsa was once known as the oil and gas capital of the world. Today, T-Town, as locals like to call it, is gaining recognition as a friendly environment for a new generation of entrepreneurs.
Once a recurring punch line in Johnny Carson’s monologues, the agriculture-andoil town of Bakersfield, California—home to the country’s most prolific carrot farm—is not the most obvious example of a West Coast startup hub.
But the Central Valley city, population 400,000, has vaulted onto this year’s Surge
Cities list by outperforming 46 other metro areas—including the Bay Area, Boston, and Seattle—in net job and business creation in the past year.
“Incredible things are happening here,” says Irma Olguin Jr., co-founder and CEO of Bitwise Industries, a Fresno-based tech academy and software startup that’s helped create about 1,000 jobs in the area. It’s opening a Bakersfield location in 2020. “We’re seeing validation from VCs and investment banks, and there is a momentum around local revitalization.”
According to Anna Smith, co-founder of local real estate firm Sage Equities, this Bakersfield boom has been helped by entrepreneurial Millennials who’ve returned home from more expensive cities. They’re finding a growing tech community, bolstered by events like the 59-day hackathon led by nonprofit 59DaysofCode.
Latinx founders, whose ranks swelled by 36 percent from 2007 to 2012 in Bakersfield, have also been essential to the city’s evolution. Today, approximately three of every 10 companies in town are Latinx owned, and membership for Bakersfield’s Hispanic Chamber of Commerce has ballooned from 200 businesses to 1,200 in less than a decade.
Rosibel Hurst’s Bellissima Medical Aesthetics is one of 8,500 local Latinx-owned businesses. In 2014, the founder, who was born in Honduras, launched her beauty clinic, which offers procedures such as Botox injections and skin-tightening treatments, from a single room inside of a supportive doctor’s office. Today, Bellissima is profitable, with roughly $2 million in annual sales and 13 employees. “I was able to grow this company because of the help I got from people here,” she says. “Bakersfield is a giving city.”
As the field of startups grows in Bakersfield, so do the resources to sustain it. In 2018, Bakersfield businessman John-Paul Lake co-founded the city’s first angel investing firm, Kern Venture Group, and worked with the city’s community college to create Launchpad, which helps local entrepreneurs grow their businesses.
Originally created in Fresno to assist refugee farmers, loan fund Access Plus Capital has doled out 22 microloans worth more than $1.6 million to Bakersfield entrepreneurs since it began servicing the city in 2012.
“People are realizing that the Central Valley is changing,” says Edward Palomar, manager of the fund’s Bakersfield office, which opened in 2017. “They see the opportunity for growth here.”
STARTUP NEIGHBORHOOD
Downtown Tulsa houses many of the community’s new entrepreneurial enterprises. The Forge, a business incubator, co-working space 36 Degrees North (named for 1 Tulsa’s latitudinal coordinate), and early-stage investment and business advisory firm i2E are all clustered within a 1.4-square-mile loop formed by Interstate 244 and Highway 75.
TALENT PIPELINE
Roughly 3,500 students graduate each year from nearby Oklahoma State University. 2 Many funnel into the city looking for work. Tulsa Remote—a program that lures workers to the city with the promise of $10,000 in grants, access to co-working spaces, and networking opportunities—brought more than 100 transplants to town in its first year. Another 250 are expected in 2020.
RED FLAG
Funding for Tulsa-based startups lags behind that in other areas, says Elizabeth Frame Ellison, CEO of the Lobeck Taylor Family Foundation. “We’re an oil and gas state—people are so used to taking risks and digging a hole in the ground without knowing what’s going to be there,” Ellison says. “But that’s not translating to investing in startups.” In 2019, there have been only five VC deals totaling $6 million, according to research company PitchBook.
COMPANIES TO WATCH
In 2015, Stephanie Conduff launched Leche Lounge, which makes a line of portable lactation suites and has partnered with Nike and Rent the Runway.
Verinovum, which launched in 2014 and has raised $12 million, organizes patient data for health care providers and bill payers.
WHERE TO TALK SHOP
When founders need a break from brainstorming, they head to Chimera
—a one-minute walk from 36 4 Degrees North—for coffee and the restaurant’s popular tacos. Those in search of something stronger head to Hodges Bend, a café that, in 5 the evenings, turns into a speakeasy.
RECENT EXIT
Midstream oil and gas company SemGroup to Energy Transfer, for about $5.1 billion (2019)
NOTABLE FUNDING
$5 million The Zero Card (employee benefits program)
THE PLAYERS
As COO of the Lobeck Taylor Family Foundation, Meredith Peebles is “responsible for connecting entrepreneurs and helping smallbusiness owners,” says Devon Laney, the CEO of 36 Degrees North. She was also instrumental in the launch of Mother Road, 6 the city’s first food hall, which features 21 culinary and retail outlets—an initiative developed by the foundation.
Malachi Blankenship, business development manager and venture adviser at i2E, also serves as the lead organizer for Tulsa’s branch of 1 Million Cups. That program, which connects entrepreneurs and teaches skills such as pitching techniques, gets its name from the idea that founders network and problemsolve over many cups of coffee.