Since the likes of Hewlett Packard began the Silicon Valley trend back in the 1940s, Northern California has become a hotbed for enterprise talent and explosive business growth.
No city has become more synonymous with technology, venture capital and billion-dollar valuations than San Francisco. However, on the other side the bay, Oakland is developing a burgeoning business district populated in equal measure by people tired of the surging cost of living and those looking to grow under the radar.
During a trip to the Bay Area in February, Real Business was able to meet some local businesses first hand and find out what the unique characteristics of the area are – and why owners feel there has never been a better time to pick Oakland over San Francisco.
While the likes of Uber and Pandora are examples of billion-dollar businesses with a footprint in the city, clothing brand Oaklandish is an SME that has its roots in the area – and is pretty proud of that.
Milton Williams, community coordinator at the company, sat down with us at the brand’s downtown shop to answer some questions.
“Oakland has inspired Oaklandish since day one,” Williams said. “Oaklandish started in 2000 as a grassroots art project dedicated to showcasing individuals and movements that originated within city limits. As Oaklandish has evolved, so have our products, but that original tribute to the city’s legacy remains. Simply put, Oaklandish could not happen anywhere else but Oakland.”
One trend that kept cropping up as our group travelled around Oakland, as part of a trip with Norwegian Airlines, was the strong sense of community that exists in the area.
In fact, research conducted in 2013 found that the city was the most diverse in the US with a population of more than 400,000 – beating out the likes of Sacramento, New York and Chicago, which also scored well.
“Oakland is one of the most diverse cities in the US, and that diversity is reflected in our employees. We bring a great variety of viewpoints together, and that creates a company that is always ready to experiment and innovate while bringing all our varying skills to the effort. Also, we get 260 sunny days a year, so that makes for happy coworkers,” Williams went on to say.
Research from the Council for Community and Economic Research recently found that the cost of living in San Francisco is 62.6 per cent higher than the US average, with housing nearly three times more expensive than other American cities.
Not only is there a dearth of affordable housing in San Francisco, but the fast-growing salaries being afforded to startup employees means landlords hold all the power and can set rents accordingly.
“Many companies are beginning to recognise that the amenities available to them and their employees in Oakland are comparable with those in San Francisco and tech employees being priced out of San Francisco are fuelling a residential boom throughout the city,” said Amber Schiada, vice president at JLL Research.
Loren Goodwin is a local to the Bay Area, but chose to set up his business, Gastropig, in Oakland. When asked what it was about Oakland that convinced him it was the right place for his pork-centric restaurant offering Gastropig, he said: “Oakland is ready for a great many things that other cities have. Oakland is our home, so we wanted to build a place that appeals to our friends and community as well as travellers and tourists.”
On the competition that exists when setting up a business in the Bay Area, he added: “There are many young, intelligent, driven people that have a large support system of like-minded individuals aching for the chance to push into the unknown.
“Any type of business is represented in the Bay Area, but there are enough residents that if you make a good product or service, it will be picked up and utilised even if others are doing something similar.”
So what does Oakland have to offer for British businesses interested in getting that illusive US footprint? Well, for starters there is now a direct way to access the market. Norwegian Airlines and British Airways fly direct to the city multiple times a week, with Norwegian being the first carrier to ever have an option from London.
We stayed at the well-afforded Waterfront Hotel, which is conveniently located next to Jack London Square in the heart of downtown and great for business travellers in town for a few days. This provided useful access to local eateries such as Bocanova and Yoshi’s, restaurants which demonstrated the diversity mentioned above.
Mark Overton, president and CEO of Visit Oakland, believes the area is equally as attractive to tourists as it is to businesses. “There has been a migration of businesses large and small to Oakland. Uber, Pandora, Sungevity and Clorox all call Oakland home because the cultural fabric of the city is aligned with the diverse cultural fabric of their employees and business mission,” he said.
However, Oaklandish’s Williams was quick to dismiss any comparisons people may have with other up-and-coming US cities. “Oakland is not the Brooklyn of the Bay, or anything else along those lines,” he said. “Oakland is Oakland, and we’re proud of ‘the town’. We have a rich history of social movements that have changed the world, and Oakland continues that legacy today. But above all, the city is resilient and dedicated to preserving its own history, culture, and people, and Oaklandish is proud to play a role in that.”
And what about the ability for non-tech businesses to succeed in an area characterised by Facebook, Apple and Twitter? “I think it is possible for non-tech businesses to succeed,” commented restauranteur Goodwin. “There is ample support, we just need more individuals who can see the path to getting their dreams realised. Public organisations are more plentiful for non-tech assistance.” However, he does believe the Bay Area could use some more support from private individuals who would like to change the shape of its cities.
Driven by its community of passionate entrepreneurs, and backed up by exciting pockets of commerce like Temescal in the northern most part of the city, Oakland is well positioned to become a location of choice for local business builders and a well-established base for companies looking to crack the US market.
As Real Business found out on its trip with Norwegian Airlines, which offers a very affordable premium service connecting British businesses with the Bay Area, Oakland is quietly going about its business. While San Fransisco is fast running out of space and pricing locals out, its neighbour is ready to reap the benefits.