Business startups responsible for almost all new jobs in Sonoma County
Recent years have been difficult for everyone, with the unprecedented events of 2020 and 2021 followed by the economic downturn that has affected all of the US and most of the western world. Sonoma County, along with neighboring Marin County have felt their share of the impact.
US Census Bureau data shows that job growth in the two counties has languished below 12 percent for the decade leading up to December 2022, well below California’s state average of 17.6 percent, which is, itself, considered lackluster. These less-than-encouraging statistics were highlighted by Zachary Kushel, founder and President of Marin Sonoma Impact Ventures (MSIV) at a recent conference hosted by Sonoma State University.
However, he went on to tell the 300+ local entrepreneurs in attendance that beneath the numbers there is cause for optimism – and that they themselves hold the key to a brighter economic future.
MSIV is the first regional Venture Capital fund to be exclusively focused on the Marin Sonoma area and in the past three years, 20 North Bay companies have raised $1 million or more in equity capital. Kushel says this sets the stage for opportunity, and not just for the entrepreneurs themselves. He told the delegates: “Almost all new job creation came from startup companies,” and said they have the power to transform the local economy.
Challenges to launching a startup
There were plenty in attendance who are now successful business owners but have got there the hard way, so nobody was pretending launching a new business is easy. Local entrepreneurs exchanged stories about the challenges and obstacles that they had overcome on the road to success and financial security.
For example, Rob Das co-founded software company Splunk and grew it from nothing to a $3.65 billion enterprise employing 7,500 full time staff. He told how he spent the first two years living on rice cakes and over-extended personal credit before paying himself his first salary.
Das’ experience is an extreme one, but there are some challenges that are common to all startups. Delegates discussed the vital importance of cash flow, and how lack of cash can destroy a business that is ostensibly successful and has a full order book. Making it as easy as possible for customers to pay is extra important in the online age. For example, even simple credit card processing high risk businesses can be a stumbling block. High risk businesses include growing areas like gaming, financial services and so on – areas that have their own specific regulations and banking requirements.
Technological innovation for traditional enterprises
Technology lies at the heart of many startups, continuing a California tradition that dates back to the early days of Silicon Valley more than half a century ago and just two hours drive down I-880. But it would be a mistake to assume that all start ups are concerned with digital processes in the virtual world.
In fact, there were entrepreneurs on the panel representing industries that predate the silicon age by centuries. Karissa Kruse is President of the Sonoma County Winegrowers Association and she gave a stark warning that having lost a million acres of farmland in just the last five years, California is in danger of losing touch with a vital part of its social, economic and environmental heritage.
But far from standing in opposition to tech, she invited today’s innovators to treat California’s vineyards as a ‘living lab” where they can work together to keep industries like wine growing and farming sustainable – in both the environmental and the economic sense of the word.
Tim Bucher is CEO of San Francisco-based Agtonomy, and he provided attendees with a tantalizing vision of California’s farming future. He explained that until the last 60 or 70 years, farming was an industry that tended to be an early adopter where new technology was concerned. Centuries ago, farmers faced the same push-back and cynicism when they introduced mechanical equipment for cutting, baling and sorting that today’s service sectors are seeing with the use of AI and machine learning to perform repetitive administrative tasks like data entry.
The digital revolution has yet to have a profound impact. But that, says Bucher, is all about to change. He said: “Things are going on to affect our farms. Farmers are desperate right now because of this perfect storm upon us,” by which he referred to a succession of droughts, floods, an economic downturn and a chronic labor shortage.
Bucher is also president of Trattore Farms and Winery in Geyserville, and he has created a “farm of the future” that combines cutting edge technology such as autonomous equipment with traditional values. Presenting a bizarre but compelling blend of Little House on the Prairie and Futurama, it left the attendees with plenty to think about.
