special supplement
K
nown more for its residential
neighborhoods and school sys-
tem than its incubators and start-
ups, Elk Grove doesn’t expect to
be the next Silicon Valley, but that hasn’t
kept the city from investing in tech com-
panies.
In 2016, the city granted $27,000 to
InnoGrove, a coworking space that opened
in 2015, one step toward fostering a col-
laborative ecosystem for entrepreneurs
and tech-oriented startups. And Elk Grove
already has a tech presence. Apple owns
and operates a nearly 800,000-square-
foot campus within the city and an-
nounced in November 2018 a $4.2 million,
24,000-square-foot expansion. Alldata,
an online resource for automotive origi-
nal equipment manufacturer information,
was founded by two Elk Grove residents
in 1986 and has operated in the city ever
since, even after Fortune 500 company
AutoZone purchased it in 1996.
Elk Grove Economic Development Direc-
tor Darrell Doan believes other local startups
could have similar success as Alldata with
the right support.
“We have Alldata, so why aren’t we
doing more? Some call us a sleepy sub-
urb, and we’re not known as a business
location with a thriving tech base, but if
you look at tech companies, they usu-
ally start with a couple founders in a
garage, and Elk Grove has like 70,000,
so we’re good there,” Doan says. “But
why not sell Elk Grove as part of this
up-and-coming Sacramento region as a
lower-cost alternative to traditional Cali-
fornia tech locations like San Francisco and
Silicon Valley? One of the ways we can do
that is to develop an incentive program.”
So in August last year, the City of Elk
Grove announced the Startup Elk Grove
Incentive Program, which will award
$150,000 in grants to three tech-oriented
startups in May.
Doan says the program also will offer
assistance in the form of site searching and
expedited building permits. As for equity,
Doan says, “We don’t take a piece. We
give you the cash, but you must operate in
Elk Grove.”
While it’s unusual for a city to invest
in tech startups, Doan believes it’s worth
the risk.
“Some people think it’s not a good
use of government funds, and that’s a
fair criticism,” he says. “But look at Ap-
ple. It anchors a suburb. If we could find
just one company that has that unicorn
potential, then that’s how we grow a cor-
porate base: from within, with early sup-
port for those companies. The goal is to
create a greatly diversified economy with
some great corporate anchors that have
come through our program.”
“IF YOU LOOK AT TECH COMPANIES,
THEY USUALLY START WITH A
COUPLE FOUNDERS IN A GARAGE,
AND ELK GROVE HAS LIKE 70,000,
SO WE’RE GOOD THERE.”
— Darrell Doan, economic development director, Elk Grove
Some companies hoping to receive
city support include JobLove, an ear-
ly stage startup that uses dating-app
technology to pair employees with
employers; SensorTransport, a logistics-
network company that uses a cloud-
based system to monitor freight transport;
and InnoGrove.
“Elk Grove is typically not the first
place people think of for tech startups,
but it’s a collaborative community,” says
InnoGrove founder Steve Barnett. “The
high cost of living in the Bay Area has
caused people to look for other options to
live. I’ve got reasonably affordable hous-
ing, I’ve got a great school system, I’ve got
great parks — it’s a great place to be.”
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