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Multimedia's starring role: Small tech firms still drawn to Marin
By Jim Welte, IJ reporter
Tuesday, May 03, 2005
Kelly Williamson is a man on a mission: Turn a fledgling San Rafael digital animation studio into a Pixar-like, multimillion-dollar enterprise.
Williamson's CritterPix Studios - like upstart video game makers Telltale Games and Timelapse, and established digital media players Sonic Solutions and Nihilistic Software - is key to the future of Marin's multimedia industry, which has been identified by the Marin Economic Commission as a potential economic growth sector. The commission has identified three sectors, or business clusters, to target this year as officials try to find ways to boost growth. Other clusters are biotechnology and "green" building.
CritterPix, Telltale, Timelapse, Sonic Solutions, Nihilistic and many others sprouted in Marin because of two key moves made more than two decades ago:
• Filmmaker George Lucas decided to relocate his companies to Marin from Van Nuys in 1980.
• Siblings Doug, Gary and Catherine Carlston launched Broderbund Software in Novato in 1981.
Lucasfilm and Broderbund attracted a constellation of high-tech talent to Marin, spawning a vibrant multimedia industry as employees broke out on their own or joined other entrepreneurs to launch their own enterprises. Hamilton-based Nihilistic Software founder Robert Huebner said LucasArts - the video game subsidiary of LucasFilm Ltd. - was called "Lucas University" by industry insiders.
The high-tech ferment in Marin bodes well for the future of the multimedia industry in the region, Williamson said. "The real truth is that to grow this company and to succeed, we've got to be able to ramp with world-class animation talent insanely fast," Williamson said. "The only way we can do that is to be located right next to the talent - and that's here."
Twenty-five years after Lucas moved his firms to Marin and helped trigger a booming local industry, his decision to shift the bulk of his companies to the Presidio in San Francisco might have a silver lining for other high-tech businesses. "There is a lot of talent there, and some of that talent that came in doesn't want to leave now for the Presidio," said Dan Connors, chief executive officer of Telltale Games.
In fact, ex-Lucas employees populate a number of competing firms, and Connors' year-old Telltale is no exception. Eleven of its 13 employees came from LucasArts - and Connors hopes more are on the way. He hopes to have 50 employees in three years. LucasArts had become centralized around "Star Wars"-related games, leaving little room for the competing content that had drawn many game developers in the first place, Connors said. "'Star Wars' in some ways took away LucasArts' need of crafted boutique content," he said. "We hope to fill that void."
San Rafael-based management consultant Andre Blanadet is optimistic about the growing multimedia business in Marin. As head of consulting firm Avance, Blanadet works with several startup firms in the county. He recently helped Telltale secure $700,000 in financing, and has taken a post as the company's chief financial officer. He also advises Michael Nelson and Larry Holland, the co-founders of TimeLapse, a Novato-based video game maker for cell phones.
Blanadet said the Lucas move to the Presidio could be a blessing for the rest of the multimedia sector in Marin. "I don't see it as a negative at all," he said. "I see it as an energizing force." He compared the Lucas move to software giant Oracle's $10.3 billion acquisition of PeopleSoft last December, a deal that resulted in approximately 5,000 layoffs.
"Almost immediately (after the PeopleSoft acquisition), startups began mushrooming up everywhere," he said. "The big difference in the Bay Area is that when a company like Lucas leaves or PeopleSoft gets acquired, the people don't go with the jobs, the people stay and change jobs." But others aren't certain. Supervisor Cynthia Murray said Marin County isn't assured of keeping the talent that's already here.
"It's one of the few sectors that seems to want to go back to the urban areas instead of the suburban areas," she said. "The companies go where the workers are, and the young creative types live in the cities." And Marin, with its sky-high housing costs, daily traffic nightmares and lack of commercial space for expansion, provides fertile ground for urban outsiders trying to lure local businesses away.
Just last week, with William-son in the midst of ramping up talent at CritterPix Studios and monitoring script development for his first feature film, "Ollie the Otter," he got a multi-faceted pitch from the state of Arizona to relocate the company there. Arizona officials said CritterPix could save as much as $1 million a year on utilities and taxes by moving to their state. They also promised to develop an animation program at the University of Arizona to help CritterPix develop talent.
"The state of Arizona has thrown themselves at our feet," Williamson said, adding Marin needs to do more to nurture local businesses. "The city and the county need to think of the big picture and show that they want to keep us here," he said. Williamson also said he intends to remain in Marin for now.
"For us, it's about getting into the game as fast as possible, and being here allows us to do that," he said. "But the cost of doing business and staying here in Marin County is expensive." No one underestimates the economic significance of the move by Lucas to the Presidio's Letterman Digital Arts Center, an 800,000-square-foot, four-building complex.
About 1,500 jobs will be leaving Marin for San Francisco starting this July - a roughly $80 million payroll that pumped another $80 million into the Marin economy, according to a 2002 study. Blanadet, a former executive at Citigroup, is undeterred, and said both local and foreign investors are eager to invest in local startups. He said he has a network of investors, venture capitalists and investment bankers to call on when the time is right.
"First of all, Marin is phenomenally rich," he said. "There are so many wealthy people who have made a lot of money on the real estate market and now want to invest in startup companies." Blanadet said he's also heard from European investors who tell him to find a local company they can invest in so they can move to Marin and manage it. The move would be a way for them to live in one of the most beautiful places in the world.
"Right outside our doors is a wealth of talent and an unbelievably beautiful surrounding," he said. "For me, there's no way I'd ever leave here - I'd be on Prozac all day after living here."
Contact Jim Welte via e-mail at jwelte@marinij.com
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