Compiled by Mirador Capital Partners of Pleasanton, headed by veteran investment advisor Don Garman, it’s the annual update on trends and companies in the Tri-Valley. The 40-page report grew out of the Mirador Tri-Valley Index that compares the performance of public companies headquartered in the Tri-Valley with the S&P 500. Garman and his team have been tracking that index since 2007.
In 2018, Tri-Valley companies out-performed the S&P by 26 percent, growing 20 percent while the S&P fell 6 percent. The Tri-Valley Index includes energy giant Chevron, fast-growing Ross Stores, as well as technology companies such as Workday and Veeva. Sectors represented include: energy, technology (nearly half), healthcare, finance, industrials and consumer discretionary. Over the last 10 years, the local index has grown 25 percent versus 7 for the S&P.
The report notes that the index includes, “… a concentration in cloud computing but also notable representation of life sciences, energy, retail and advanced manufacturing companies. Performance in recent years has been largely driven by the significant growth of companies in cloud computing and life sciences.”
Last year, three companies were acquired in what was a record year of merger and acquisition activity. That totaled more than $9 billion.
The thriving start-up culture drew $590 million in venture capital funding, including the 2018 launch of the first local one, Tri-Valley Ventures.
The well-written report includes short interviews with key executives of companies that were founded here or have moved here. It’s a broader look at what I have spotlighted earlier with coverage of the Innovation Tri-Valley’s #Gamechangers and the life sciences cover story. Some are familiar—Serge Saxanov of 10x Genomics, for instance, but others offered fresh insight into familiar companies such as Veeva Systems CFO Tim Cabral.
One constant theme of both the Mirador View and the executives is location, location, location. With a growing number of companies headquartered here, it’s a reverse commute for highly skilled workers living elsewhere in the Bay Area and there’s ready access to the San Joaquin Valley workforce for life science and advanced manufacturing firms building their products here. Executives can readily sell potential employees on working locally and getting out of the Interstate 680 parking lot. It can mean three or more hours back in their day.
The intersection of Interstates 580/680 that drew Joe Callahan and the Prudential Insurance Co. here to develop the 860-acre Hacienda Business Park more than 40 years ago. When BART came to the valley, it enhanced that environment. And if the Valley Link rail between BART and San Joaquin County can be brought to fruition, the advantage will be even stronger.
The Mirador View cites location plus three other advantages: the local talent pool, relatively affordable real estate (both residential and various classes of business space) and the innovative ecosystem. Over the last 20 years, the Tri-Valley has attracted new residents with significantly higher education levels. Now about 25 percent have a master’s degree or more, while over 60 percent have a bachelor’s degree. About 20 years ago, it was about one-third with a bachelor’s degree, despite the concentration of advanced degrees at the national labs.
The national labs are the foundation of the innovative ecosystem and, what we’ve been seeing for the last few years is serial entrepreneurs building and selling one company and then turning their attention to another start-up here. Among the companies spotlighted are Veeva Systems, 10x Genomics (the valley’s homegrown unicorn), S2 Genomics, Lambda School, Evident.io and TriNet along with serial entrepreneur Boris Kobrin whose building his second Tri-Valley based start-up.
The Mirador View is a good read that will increase your understanding of the Tri-Valley’s economic advantages.
Underlying it is one factor that has been a constant here—it’s a great place to raise a family with quality public education. That family-centric value had drawn executives here to raise their families and endure commutes to the South Bay, the Peninsula or the City. Family is not an important value in the South Bay—it has been one in the Tri-Valley for decades since young families came here for affordable housing starting in the 1960s.