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‘Grandma’s’ garage that housed Nest holds lure for new startups

November 14, 2016 


PALO ALTO, Calif. — At first glance, the light blue cottage on Alma Street in this Silicon Valley city may not look like a place where big ideas are born.

But in the past 15 years, this modest house has produced nearly a dozen successful tech companies. Its owner swears there’s something special in the air.

"You’re going to get some good ideas here," said owner Genie Laborde, who runs her own consulting business out of the house and lives a few blocks away. Over the years, her entrepreneur tenants have come to think of her as the grandmother of Silicon Valley.

Nest got its start in Laborde’s garage in 2010, and four years later the smart thermostat company was acquired by Google for $3.2 billion. Several other companies, after renting either Laborde’s garage or basement, have raked in capital or cashed out — successes that have lent the space something of a mythical quality among startup founders.

"I used to walk by this office and see Nest, and now Nest is a huge, huge company," said Ben Brewster, co-founder of data leveraging startup Monetize, which moved into Laborde’s basement earlier this year. "There’s good potential and possibilities."

It’s not just Nest. Business intelligence startup EdgeSpring rented from Laborde and went on to be acquired by Salesforce for an undisclosed amount. Comprehend, which makes software for biotech companies, spent two years at Laborde’s and piled up $30 million from investors. And education tech startup VersaMe, another prior Laborde tenant, recently launched its first product after raising more than $100,000 on Indiegogo.

It’s as if the house, which Laborde bought in the late 1990s as an office for her own consulting business, is an undiscovered incubator. The property is shaded by a handful of redwood trees, and on warm days, techies flock to the backyard to hold meetings or take phone calls.

"We all really enjoyed the idea that it was literally a garage," said Isabel Guenette Thornton, Nest’s former thermostat product manager, "because you have this wonderful mythology of startups in garages."

Thornton found Laborde’s garage on Craigslist in 2010, when the burgeoning smart thermostat company had about five people. She said the space had a playful, whimsical atmosphere that reminded her of being in a treehouse or a clubhouse — right down to the occasional brush with nature. Birds would come into the office when the garage door was up.

"That was sort of charming," said Thornton, who was an intern when she found the garage, and later moved up the company’s ranks. "But the squirrels were less fun. That wasn’t so great."

The leaky roof was even less great. By 2011 Nest was cramming more than 20 people into the garage, and had to find a bigger space, Thornton said. But Nest kept the memory of Laborde’s garage alive by naming a conference room in one of their later offices "No Squirrels."

Cloudastructure, a cloud-based access and video surveillance startup, moved in a few years later and tried to make the garage more high-tech. The employees installed a system they created to unlock the door with their smartphones, and CEO Rick Bentley set up a bitcoin mining operation on the garage roof. He installed a small machine that ran algorithms day and night to generate the virtual currency, put it in a dog house to protect the machine from the rain, and occasionally sent his drone to check on it.

Since moving out of Laborde’s garage, Cloudastructure joined the Highway1 incubator in San Francisco.

In some ways Laborde, a small, Southern woman with snow-white hair, 16 grandchildren and nine great-grandchildren, is an odd fixture in this quintessential Silicon Valley scene. She’s not interested in investing in the startups under her roof because she says she knows nothing about tech. When her tenants move out, Laborde marvels at the "remarkable-looking gadgets" they leave behind. But as a writer and an artist — her paintings adorn the walls of both her home and office — Laborde says she feeds off the energy her renters bring to the space.

"Creativity is a whole vibration," she said. "All of us, I think, support each other’s creativity."

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Laborde lives a few blocks from the Alma Street property, in a house packed with just as much creative energy. She also rents living space in her home to an eclectic group of techies, investors and artists, and they host regular inner-circle parties. During a recent Friday-night soiree, Daniel Kottke, Apple’s 12th employee, regaled guests with stories about Steve Jobs. Laborde was upstairs in bed by 10 p.m., while the festivities carried on below.

Although Laborde may not know about tech, she is an expert in people and business. She has a Ph.D. in psychology, runs training seminars for corporations called "Influencing with Integrity," and has written a host of books on management, communication, sales and relationships.

Laborde says she generally stays out of her startup tenants’ affairs unless they ask for advice. But at the very least, most tenants receive a copy of one of Laborde’s books and an invitation to her seminar on leadership and relationship building.

"She cared about us as people," said Abe Ankumah, co-founder and CEO of network analytics company Nyansa, which rented Laborde’s basement in 2014 and 2015. "She would stop by from time to time just to check in."

After moving out of the basement, Nyansa scored contracts with Uber, Tesla and Wal-Mart and closed a $9 million second round of funding.

These days Laborde’s reputation precedes her. She hasn’t needed to advertise her Alma Street property in five years. Startups only move on when they outgrow the space, she said, and when they do, they usually have a friend waiting to fill the spot.

Laborde generally doesn’t raise her tenants’ rent, even if they’ve been there for several years. Her current garage tenant, health tech company Echo Labs, pays $7,000 a month — roughly $5 per square foot. That’s about half of what the average commercial tenant pays in downtown Palo Alto, based on data from real estate services firm JLL.

Ankumah, who paid $3,000 a month for the basement, said he probably would have coughed up an extra $1,000 if Laborde had asked — but she never did.

In one sense, Laborde is sitting on a gold mine. She bought the Alma Street property for less than $1 million back in the late 1990s. Now it’s likely worth millions more. But Laborde isn’t selling.

"Money has limited use, actually, if you’ve got something you enjoy and it’s working for you," she said.

Besides, she added: "I don’t really feel like moving somewhere else."

 

 


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