Idealab Plans Silicon Valley Office

Idealab, the Pasadena business incubator that has spawned some of Southern California’s flagship Internet firms, said Monday it will open an office in Sunnyvale, Calif., and try to repeat its Southland success in Silicon Valley.

The establishment of Idealab Silicon Valley turns tradition on its head. Southern California’s high-tech businesses historically have tried to grow by emulating their counterparts in the Bay Area, and now Silicon Valley start-ups will have an opportunity to learn from a Southland success. If the satellite office proves successful, Idealab could open more incubators in cities such as Boston; Austin, Texas; Seattle; and New York, said Bill Gross, the incubator’s chairman and founder.

Silicon Valley could learn a thing or two from the incubator that helped launch EToys, Ticketmaster Online-CitySearch, GoTo.com, NetZero and Free-PC.com, said Barbara Harley, co-chair of the Pacific Incubation Network, an association of West Coast incubators. Idealab’s deep pockets enable Gross to quickly convert a concept into a company and thereby increase the odds that it will dominate its industry segment, she said.

“Bill Gross’ model has not been used as much as it could be,” Harley said.

That model has enabled Idealab to turn an initial investment of $3.5 million in 1996 into a collection of companies that Gross said are worth $10 billion today.

Gross--who is personally responsible for most of the ideas behind Idealab companies--said he would prefer to keep all his start-ups under one roof in Pasadena, but he was forced to expand to take advantage of the Silicon Valley labor force.

“We have more ideas than we can find people for,” Gross said. “I have 27 ideas on my backlog right now.”

The 60,000-square-foot facility in Sunnyvale can accommodate between five and 15 companies, depending on how many employees they have, Gross said. Idealab already has four companies in the Bay Area, and they will work closely with Idealab Silicon Valley.

Idealab Vice Chairman Bob Kavner will head up the Sunnyvale office. Kavner has served as chairman of several Idealab companies, and he was previously president of AT&T;’s multimedia group and a partner in Coopers & Lybrand’s technology practice.