Tech legend sees SoMa - in Oakland

October 12, 2012

By Blanca Torres

Mitch Kapor and Freada Kapor Klein are investing in Oakland’s future.

When famed technology titan and philanthropist Mitch Kapor looks at Oakland, he remembers South of Market in San Francisco the way it was in the late 1990s.

Former industrial properties were being transformed into inexpensive spaces for both startup tech companies and residents. There was a buzz of innovation in the air.

SoMa today is not the same place Kapor remembers, but Oakland could be.

“Oakland in particular is the next great South of Market,” Kapor said. “It will be to this decade what South of Market was to the previous one. There’s lots of space, both to work and to live, lots of energy and lots of opportunity. People just sense potential.”

With that belief in mind, Kapor and his wife, Freada Kapor Klein, moved the operations of Kapor Capital, Kapor Enterprises Inc., the Kapor Foundation and Level Playing Field Institute, a nonprofit, to Oakland’s Uptown neighborhood from a previous location in SoMa.

Kapor made his name and fortune from Lotus Development Corp., maker of the Lotus 1-2-3 spreadsheet and Lotus Notes software applications.

The Kapors, along with Oakland business and community leaders, see the move as much more than just physical.

It could serve as a major endorsement for Oakland’s technology sector, which so far features a handful of big names — Pandora Media, Ask.com and Sungevity — but has yet to detonate.

“Oakland is a welcoming environment for innovators and for people who cross boundaries because we’re not just doing tech, we’re doing tech with social impact,” Kapor said. “It can leverage the huge assets at the University of California, Berkeley, which has as many or more smart people doing great research, but is dramatically under-leveraged compared with Stanford.”

Oakland had been on the Kapors’ radar for many years, said Kapor Klein, through its foundation grants and nonprofit programs such as SMASH, a summer math and science honors program for low-income high school students of color.

Through the capital group, the Kapors hope to provide early investments in Oakland tech startups that have a social impact and perhaps launch other initiatives such as an incubator.

Over the years, the organizations have learned that sharing office space results in better ideas and programs by infusing more technology into its philanthropic work.

“We look at how to bring these worlds together,” Kapor Klein said. “Oakland is extremely well-positioned to be a magnet for all those threads.”

The Kapors leased 13,000 square feet at 2201 Broadway in Oakland across the street from 2148 Broadway, a 36,000-square-foot office property that the Kapors bought two years ago for just more than $2 million. That building was unfinished at the time of the sale; so far, no work has been done on it.

Cedric Brown, executive director of the Kapor Foundation, said the groups will take time to figure out the best use for that space, but didn’t want to wait on that to come to Oakland.

“There’s something exciting about what’s going on in Oakland. In Uptown, for instance, there’s a renaissance going on that has been going on for a while,” Kapor said. “We definitely see ourselves as part of this community and want to improve the civic life.”

For some supporters in Oakland, the move couldn’t come soon enough. This month, Kapor Capital was nominated for an award from 2.Oak, a technology networking group, for “Investment Innovator” of the year, even though it is just settling in.

The Kapors’ arrival demonstrates that Oakland is “getting interest from longstanding tech players to move from San Francisco,” said Debbie Acosta, principal of IDotConnect, who is on the steering committee of 2.Oak and formerly worked in economic development for the City of Oakland.

For a long time, Oakland focused on encouraging tech startups to grow within the city limits as opposed to trying to lure established players from outside.

But Oakland shouldn’t feel limited, Acosta said. The city boasts some of the Bay Area’s best weather, affordable office rents, an array of “creative space” options, public transportation, a burgeoning restaurant scene and a diverse population.

2.Oak has hosted mixers for Oakland’s tech community for a few years now that draw dozens of tech geeks, but unlike other parts of the Bay, many of those techies are of different ethnicities and are women.

“Oakland is more affordable and has always had diversity,” Acosta said. “The tech-friendly environment is here, it just needs to be expanded.”

Diversity is a top priority, said Kapor Klein, and is at the center of many of its programs. One goal is to close the talent gap in technology and engineering fields, where people of color are underrepresented.

“If we can generate a whole crop of geeks of color, that’s a win for everybody. There are tens of thousands of tech jobs unfilled,” Kapor Klein said. “We feel like that’s an urgent match to be made.”

It will take years to determine if Oakland can replicate the explosive growth of technology companies that SoMa has seen.

Jose Corona, executive director of Inner City Advisors, a non-profit organization that helps small businesses grow and increase their payrolls, said the Kapor organizations are bringing something new to Oakland in that they combine technology with social justice. Oakland is much stronger on social justice, but city leaders could do more to boost technology.

“What Oakland doesn’t have is an organized tech sector,” Corona said. “What’s missing is a policy agenda that supports this sector. Any entrepreneur is looking for a community to wrap themselves around to find resources.”

So far, a few major players such as Pandora and Sungevity are viewed as the next wave of the city’s great employers, but it is yet to be seen if Oakland’s tech sector can grow beyond those companies. For Kapor, that sense of promise is part of Oakland’s appeal.

“It’s in my DNA — when there’s this great opportunity for a revival, a renaissance and development on all fronts — to be part of that, to be present, to help,” he said.