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Title Surfing Silicon Beach: The ever-expanding dot-com revolution catches a new wave in Santa Barbara 
Date: 12/13/2000 
Author: Andrea Estrada
Source: Santa Barbara Magazine

A recent tidal wave of high-tech business success has swept over the shores of Santa Barbara, anointing the area with the nickname Silicon Beach. Industry watchdogs estimate that in the last three years, the number of high-tech companies here has doubled. Entrepreneurs like John MacFarlane, who founded Software.com straight out of UCSB, and Lex Sisney, who moved his company, Commission Junction, from Minneapolis, both agree that Santa Barbara is ground zero in the ever-growing world of dot-comers.

"Santa Barbara sits in the center of the next e-commerce revolution," Sisney said. "It's location between Los Angeles and Silicon Valley puts the city smack in the middle of the place where media is being created and the area that has the technology to make it all work."

In fact, Santa Barbara has been attracting the best and the brightest in the high-tech world since the 1960s, and benefited economically from the scientific achievements these minds have wrought. It all began with Glen Culler, an engineer who helped establish. UCSB as a high-tech powerhouse. Because of his work, UCSB was selected as one of four sites to help establish the Department of Defense's ARPAnet (Advanced Research Projects Agency). UCSB joined Stanford Research Institute, UCLA and the University of Utah to blaze the trail that later would become the information superhighway known by all as the World Wide Web.

"Glen Culler is the grandfather of entrepreneurship," says Timothy Schwartz, assistant dean in the College of Engineering. "Out of Glen's lab came more than 20 high-tech companies. And 30 years later students of his are still starting companies." Roger Wood, professor emeritus of electrical and computer engineering and computer science, remembers Culler "walking around the building like a pied piper with a group of grad students trailing along behind him."

In recognition of his work, Culler received the 1999 Medal of Technology from President Clinton in a ceremony at the White House. According to Culler, the Internet is all he expected it to be when he started working on its earliest iteration more than four decades ago.

In addition to Culler, faculty and alumni of UCSB's College of Engineering, currently ranked one the highest engineering pro- grams in the nation, have founded more than 65 high-tech companies on the central coast alone. MacFarlane, for example, graduated from the college's Ph.D. program, founded Software.com, and several months ago announced a merger with the Redwood City-based Phone.com in a $6.4 billion deal. Indeed, more than $300 million in venture funding for UCSB spin-off companies have flowed into the area and several of these companies have been acquired by larger organizations for transaction values exceeding $5 billion, not including the Software.com deal.

While the College of Engineering often gets people here, the Santa Barbara ambience is what makes them decide to stay.

"There's a different attitude to the people who want to make their lives in Santa Barbara," said Dennis Cagan, President and CEO of Santa Barbara Technology Incubator, a company that nurtures fledgling independent high-tech businesses. "They don't relate quite as closely to the dog-eat-dog set of moral ethics and values," he said, adding that people here tend to be more loyal to companies than those in Silicon Valley.

"It's drawing people who have made their money quickly and have a balanced view," Cagan continued. "They don't want to work full-time like Bill Gates does. They want to participate in the community. They want to work on their own terms.

"People don't jump jobs here the way they do [there]. Very few people have left Software.com to go elsewhere, although some have retired. Software.com created dozens of millionaires, and most of them still work there."

The dot-com mavericks, those who have ridden into Santa Barbara from other high-tech locales, as well as those whose roots extend to UCSB and beyond, are leaving their mark not only on the business scene but, on the very fabric of Santa Barbara life and style. While fame and fortune have always thrived here-what with celebrities and old-money folks having visited and made their homes here for more than a century-the new wealth created by the explosion of Internet and other high- tech companies has established a new social set.

The dot-comers demonstrate their feeling for the community in a manner quite different from that of their more traditional counterparts. Whether hunting for just the right multi-million dollar estate or choosing non-profits to support, they approach the task with the same focus and fervor they did to building their dot-com empires. While it's not uncommon for new home buyers to acquire older estates just to raze them and rebuild what others may consider monstrosities, many buyers have a keen appreciation for the properties available here. Monica Lenches, a real estate agent at Coldwell Banker, works with a number of dot-corn clients.

"A client and I looked for eight months for a house by architect George Washington Smith," she said. "We finally found a one-story that he'll build on to. It had quite a bit of deferred maintenance, but my client recognized the value of the land, the location and the reputation of the architect."

With sudden affluence comes the opportunity and, as some would say, the obligation, to benefit not just oneself but the community as a whole. Increasingly, these dot-comers are taking their responsibilities seriously and contributing in ways that suit their unique sensibilities.

Thorn Rollerson, executive director of The Dream Foundation, an organization that grants last wishes to adults with terminal illnesses, said the high-tech business owners have helped his people expand their wish-granting efforts.

For example, Rollerson wanted to establish a web site to enable anyone anywhere in the world to learn about the organization, make contributions of goods, cash or services, and share in the wish-granting process. An Internet Committee was formed and Chris Jaeb, a founder of Broadcast.com, took the helm. Several other Internet experts also jumped on board.

But not all non-profit organizations are enjoying an increase in donations in proportion to the dollars that are being amassed.

Carol Palladini, a member of the board of directors of CASA (Court Appointed Special Advocates), said the organization sees little response to their direct solicitations and the means of accessing Santa Barbara's newfound wealth has been a topic of conversation among those involved in fundraising.

"There's an education process that needs to happen," she said. "Investment and financial planners and investment counselors need to under- stand the fiscal as well as karmic benefits of charitable giving and encourage their young clients in that direction.

"It isn't usually young people who do the giving," Palladini said. Like Rollerson, Palladini sees a mindset among the new monied of conducting their charitable business in, well, a businesslike manner.

"They're doing research. They're not just turning money over to existing organizations. They're looking at where their money goes."

The tide doesn't seem to be going out any time soon, leaving our town awash in the economic prosperity of those who surf on Silicon Beach.