Orange County Now a Chip Off Silicon Valley’s Block
They wire their hilltop estates for seven computers and shun living anywhere they can’t get blisteringly fast access to the Internet.
In Land Rovers outfitted with tiny cell phones, they glide the freeways to fortress-like plants in Irvine and Costa Mesa. They commute to Taiwan and Singapore with nonchalance, work 100 hours a week and install Pentium chips in their home computers on New Year’s Day for kicks.
They are the upstarts of the start-ups, suddenly rich--Silicon Valley-style--from founder’s shares, stock options and new ideas.
Because they have found in Orange County what they need to make their high-tech businesses grow, it is there that their new wealth and influence are being felt.
High-tech businesses have replaced real estate construction as the fastest-growing industry in Orange County for the last four years.
Already shaping the future of UC Irvine, the high-tech successes are having an impact along the social, cultural and economic strata of Orange County.
“There are seasons for communities just like there are seasons for years, and this is the season of high tech in Orange County,” said Joel Kotkin of the Pepperdine University Institute for Public Policy, who has studied the emergence of the computer industry in the county.
“It’s not happening overnight. The change is coming in waves, but now you’re beginning to have this critical mass of high-tech millionaires who are changing the social economy of the county in every conceivable way.”
Dave Yonamine, Hawaiian-born, founded Upstanding Systems in the dining room of his Mission Viejo tract house in 1990, when he was 35. Now he lives in a $1.1-million Newport Beach home with a panoramic view of the ocean and computers amid the antiques.
His software development company, which markets a product that makes it easier for personal computers to network with other computers, is doubling its revenues every year. It has yet to go public.
Nick Shahrestany moved from Teheran to live with an uncle in Irvine in 1979, when he was 15. He founded Procom Technologies eight years later with three friends in a two-room office in Santa Ana. The computer hardware company, which designs and manufactures high-capacity storage systems, went public in 1996 and did $109 million in revenue last year. Now Shahrestany, 32, buys up smaller companies, spends weekends scuba diving from his speedboat, and lives in Newport Beach’s Spyglass Hill.
At 47, Safi Qureshey qualifies as the elder statesman of the group. The Pakistani engineer came to the U.S. as a student in 1970. Now he’s chairman emeritus of AST Research, a personal computer manufacturer that he founded with two other people in 1980. True to the roller-coaster image of high tech, AST has suffered rocky times in recent years. In December 1997, with profits down, it slashed its worldwide work force 37%. But Qureshey is still worth more than $80 million.
He invests in high-tech start-ups up and down the California coast from his $2-million Lemon Heights house.
Qureshey has contributed almost $2 million to UC Irvine over the last three years, and hundreds of thousands of dollars more to small foundations scattered throughout Orange County and Pakistan.
“All over the county, the entrepreneurs are making tremendous amounts of money. You just can’t believe how much you make and how fast,” said Scott Purcell, 38, who founded Epoch Internet in 1994. Epoch, an Internet service provider, had revenues of $24 million in the fiscal year that ended in June. Purcell said the company expects to do three times that this year.
In the inflated world of high-tech profits that entrepreneur Yonamine gleefully calls “obscene,” it is not uncommon for the 34-year-old founder of a start-up to suddenly be worth millions in stock alone.
“A lot of my buddies have bought bigger houses, bigger cars. But we’re different than the developers were,” said Purcell over seared tuna at a trendy Irvine restaurant. A prolific traveler--he has more than a million miles on his frequent-flier account--he had flown in that morning from meetings in four cities in four days. The next day, he was off to Asia.
“It’s not a few kings and queens. It’s lots of girls and guys like me. For the most part there aren’t a few personalities in high tech who drive the community. But we’re driving the economy, no doubt. We’re making it possible for people to buy the homes the developers are selling. Ours is the money going into the banks. We’re the engine in Orange County.”
More than 250,000 people work in the high-tech industry in Orange County, 10 times the number who did five years ago, according to the Orange County Business Council. Salaries in the industry average $55,000 a year. Thousands of programmers and marketers are making more than three times that.
Orange County community leaders say that high tech’s ultimate impact on the region is just beginning to be felt. Fund-raisers at major arts organizations and charities are looking for ways to tap this new wealth as a major source of money, with invitations to dinners, performances and galas.
“Ten years ago, you couldn’t have a gathering of Orange County movers and shakers without having a bunch of real estate people sitting around the table,” said Maria Chavez-Wilcox, who as president of United Way of Orange County regularly courts the county’s powerful for donations.
“Today, if you want to look for the people who make things happen, you have to look to a new cadre that comes, increasingly, from these fast-growing industries.”
One of the first to recognize and promote the growth of high tech in the county was the Irvine Co. In 1984, it turned a bean field at the intersection of the county’s two largest freeways into the Irvine Spectrum, an office park designed specifically for high-tech and biotech companies.
The neat white buildings of the complex now house 2,200 companies, from such start-ups as Rainbow Technologies and Kofax, to major employers Ingram Micro and Japanese electronics maker Toshiba Corp.
Many who work there were educated at nearby UC Irvine.
The UC Irvine Chief Executives Roundtable, created in the 1980s to build business support for the university, was dominated by developers and real estate brokers in its early years, said Thomas Moebus, vice chancellor of university advancement at UC Irvine. Twenty-one of its 70 members now come from the high-tech industry, more than any other sector. By contrast, four are from real estate.
When Ted Smith, president of Filenet, discovered last year that the university’s only computer lab was not equipped for Windows programming software, he raised more than $300,000 from technology leaders to refurbish the lab. It was more than philanthropy: Smith said his company needs programmers familiar with the Microsoft software. Now the lab is operating in two shifts because of overwhelming demand, and Smith is raising more money to expand it again this year.
Other high-tech executives have raised more than $300,000 since March to recruit faculty members for the information and computer sciences department, which has grown under the guidance of the high-tech leaders to the largest in the UC system.
The high-tech industry is also transforming more pedestrian matters, such as what sort of technology is available for connecting to the Internet from home.
Cox Communications Orange County installed its first cable modem in the nation in Mission Viejo two years ago. The technology speeds access to the Internet by using cable television hookups.
Since then, the company’s marketing studies show, high-tech professionals have spurred demand for the technology, leading Cox to offer it across southern Orange County. It now has more than 10,000 subscribers.
“The contractors came in and they couldn’t believe how anyone could possibly want all the cable modem connections that I have,” said Yonamine of Upstanding Systems, who had the technology installed in every room of his home. Yonamine also has stereo connections built into the walls throughout his house, seven phone lines, six computers, and a shelf full of books with titles like: “How to Think Like a CEO.”
“But we’ve already exceeded what we have. I have to bring them back to install some more.”
