If you get off at any exit of the 101 Freeway in Ventura County these days, you can glimpse the future in small companies pioneering change in telecommunications, the Internet, computing and even agriculture.
The least populous of Southern California's six counties at roughly 750,000 residents, Ventura and the nearby West San Fernando Valley began several years ago to attract small companies focused on the Internet. Now the area, with good schools and reasonably priced homes, is spawning new companies and attracting venture investment from all over California, the U.S. and abroad.
The bare-bones office structures with two companies often sharing close quarters recall the early days of Silicon Valley, and so do the ambitions of the companies. Many are experimenting with ways to make communications on the Internet cheaper, easier to use and available to more and more people.
If these companies are any indication, the future of industry will be characterized by lower prices for practically all goods and by decentralized companies that hire other firms to perform specific operations. If you can see the universe in a grain of sand, you can see the trends of cyberspace in Ventura County.
Camarillo-based Data Exchange, for example, a $50-million supplier and repairer of computer parts, has organized a new company, DexBuys, that holds "reverse" auctions of computer components. A reverse auction pits a buyer, who states a need for a particular part, against sellers who keep lowering their prices to win the order. The experimental DexBuys company has been in existence just four months, but already 3,600 parts are traded daily on its exchange.
DexBuys guarantees the quality and delivery of the parts being sold, says Sheldon Malchicoff, founder and chairman, and makes money by charging transaction fees. To Malchicoff, the new company reflects the Internet's coming ability to completely transform industrial pricing.
Providea Inc., a Camarillo company that opened its doors in October, aims to increase the use of video teleconferencing by giving away video monitors, set-top boxes and other gear and charging customers for their use of the telecommunications services.
"We can do this because of the steady decline in prices of equipment and services," says Robert Hatfield, chief executive of the new company and a longtime investor in the teleconferencing field.
Video conferences have never really taken off because the $1-million-plus expense of setting up a system restricted their use to the executive suite.
But now for roughly $700 a month in fees, Providea hopes to bring the service to small business, medical offices, the legal profession and education. Providea, which has 27 employees, is backed by the marketing force of AT&T, which provides the telecommunications lines.
Outsourcing is not limited to conventional high-tech companies. Gills Onions in Oxnard peels, slices and dices fresh onions for food service and processing companies--notably McDonald's, Burger King, La Victoria and others. The onion business is growing 25% to 30% a year and has been for five years, says co-founder Steve Gill. Why so fast? "People don't want to peel onions," Gill deadpans.
There's more to it. Restaurants want to avoid accidents and workers' compensation claims from cuts, and public taste now demands fresh, rather than dehydrated, onions.
But business verities still apply. The Gills--who run a large farming company named Rio Farms in many parts of California--have invested $11 million to devise their own efficient onion peeling machines, reducing their costs. Investment and hard work, in other words, make onion kings.
Not all is rosy in Ventura County. A government budget crisis blew up recently. The county has growing pains, and a strong anti-growth sentiment requires a two-thirds majority to approve conversion of farmland to industrial zoning.
This can lead to confusion. CEOs of high-tech companies complain of power outages because the county and electric companies were ill-prepared for the growth of high tech firms that require a lot of electricity without interruption.
On the other hand, Ventura County wins high marks in surveys of regions favorable for business. More important, Ventura's fledgling companies win serious investment from global firms.
Accelerated Networks, a $10-million Moorpark company that developed a means of sending voice and data traffic over telephone lines, last year received $30 million in venture capital from Siemens. The giant German company will sell Accelerated's system along with its own telecommunications offerings worldwide.
Maxon Computer in Thousand Oaks is a 1-year-old U.S. subsidiary of the German firm Maxon that invented a low-cost program for three-dimensional motion video--the kind that makes household objects fly in TV commercials. But there is a broader implication to Maxon.
"The program is so easy to use, we can train hundreds of graphic artists," says Paul Babb, president of Maxon Computer. Big companies such as Disney "used to have a monopoly on good graphic artistry, but with the changing technology that will no longer be true," Babb says.
One of the clearest signals from start-up companies is that the Internet will soon reach a much broader public. Telsurf Networks was organized a year ago in Westlake Village to introduce an Internet program for the telephone, so that people who don't own computers can get and send e-mail and receive stock quotes, sports scores, news and any other information they desire. "The market is huge, 80 million people over 45 in the U.S. alone are not on the Internet," says Ken Guy, vice president of marketing.
The hallmark of Ventura County companies? Simple. The same ingenuity and flexibility that characterize the best of Southern California industry. It's a good indicator for the future.