Title	The Slow Lane
Date:	10/2/2000
Author:	Anita Chabria
Source:	The Standard

...Across the country, Internet workers are leaving industry hubs for smaller towns. Many are finding a better lifestyle – and a career boost as well.

Ninety miles north of Los Angeles, the 101 freeway curves into the Pacific coastline, hugging a long line of pristine beaches and passing through peaceful surfing towns like Summerland and Carpinteria before winding into Santa Barbara. Exiting at Milpas Street, the breathtaking view is replaced by a somewhat seedy neighborhood of taquerias, auto shops and decaying homes with sagging front porches and patchy lawns. Across from one such house is the 12,000-square-foot building that holds the Santa Barbara Technology Incubator, where 32-year-old Spievak is now the senior VP of investments – a job that he says gave him more equity and a higher salary than his position at Broadview.

"While the opportunity is there for everyone, the greatest opportunity is for those who can leverage Silicon Valley experiences and relationships," he observes. Spievak has heard more than 200 proposals since the incubator opened its doors in May, and is currently involved in more than 30 deals, including one venture already in operation: Ants.com, an online project-staffing recruiter.

The rest of the world may not know it yet, but Santa Barbara is no longer dependent on the ranching, tourism and defense industries that have buttered the bread of its residents for many years. Now, more than 25 percent of new jobs are in technology-related fields such as communications equipment, software and medical devices, according to estimates by local businesspeople. Since 1997, the number of tech firms in the county has doubled from 300 to more than 600, reports the Economic Forecast Project, a research center sponsored by UC Santa Barbara. Major players include Software.com (SWCM) , a wireless messaging software provider with a $7 billion market cap, and Commission Junction, a business-to-business sales distribution network that just received $40 million in second-round financing. The university's legacy as a source of engineering and computer science talent is also a boon to the area. The founders of both Software.com and Commission Junction are UC Santa Barbara grads. And although Santa Barbara does not have much in the way of local VC firms yet, it has plenty of angel money from the old-guard elite of retired business leaders who live in its secluded hills.

"It's not unlike Silicon Valley in the 1950s and '60s," says Brandt Handley, who moved his venture funding company, Seedvest, from Florida to Santa Barbara in early June.

...

It's a story that doesn't surprise SB Tech Incubator founder Dennis Cagan, who relocated from Los Angeles after 51 years there to start his business. Cagan raised more than $6 million from local sources in less than six months. But as the area sparks a rising numbers of startups, Cagan says the need for experienced senior-level professionals is also growing.

Still, Cagan says recruiting hasn't been a problem. The higher equity stakes, used as an added incentive to relocate, and quality of life benefits more than make up for any decline in salaries that candidates from Silicon Valley must accept, he says.

"It takes a slightly more mature, seasoned person [to relocate]," says Cagan. "They have to be willing to mentally change gears a little and place value on lifestyle."

While the jobs might be readily available, beachfront living has its downsides. The area has a long history of high housing prices, but the last few years have seen even greater, unexpected rises due to the growing tech community. The median price for a home in the Santa Barbara area hit $569,000 this summer, a price only 19 percent of area residents can afford. It's a situation that worries longtime residents and has caused local government to think twice about becoming a dot-com destination, says Bill Watkins of the Economic Forecast Project.

On the commercial front, rents are often lower than in hubs: Santa Barbara tops out at about $3 a square foot compared to as much as $70 in San Francisco. Yet space is limited, and restrictive zoning laws in Santa Barbara – which mandate the quaint adobe-style architecture – make it almost impossible to construct new buildings. New companies are often forced to set up shop in nearby Goleta or Carpinteria.

Still, wander through the downtown State Street corridor at lunch and you'll see high-powered business lunches taking place in the sidewalk cafes. In Starbucks (SBUX) Coffee, near the offices of Santa Barbara's prominent high-tech law firm Nida and Maloney, stock option conversations are as common as in the Valley.

"No doubt about it, this is a software city," says Starbucks general manager Paul Miller, who has lived in Santa Barbara for 28 years and has witnessed the recent influx of dot-com types. "There are [Internet] companies on every corner."

While Spievak sometimes misses the eclectic mix of his Noe Valley neighborhood in San Francisco and season tickets to the Giants baseball team, he doesn't miss leaving the house at 6:30 in the morning to avoid rush-hour traffic.

"Here I can continue doing the work I enjoy, in an area where we're much more excited about raising a family," he says. "I've seen more of my wife and son in the past three months than in the past year."