Sacramento, Calif., Offers Startups Cheaper Alternative To Silicon Valley

Just a couple hours drive out of the traditional Tech Hub, the state’s capital is attracting small businesses due to the lower overhead costs.

Sacramento is still grappling with how to grow its high-tech industry, but the region’s location is helping bring in back-office businesses connected to the Bay Area.

Exhibit A is Voxpro Group, an Irish customer-service and tech-support company that recently set up shop in Folsom. The company, whose client base includes Google and Airbnb, expects to employ 100 workers by January and 750 workers within 18 months.

Voxpro chose Folsom “because of its proximity to our partners in Silicon Valley, very simple,” co-owner and Chief Executive Dan Kiely said Thursday.

Despite the convenience of global telecommunications, Bay Area companies want to keep some of their operations relatively close at hand. Sacramento “is very attractive to those iconic global brands,” Kiely said in an interview from Voxpro headquarters in Cork. “Hopping on long flights is not something that people have an appetite for anymore.”

Voxpro also represents the latest chapter in Sacramento’s comeback as a hub for the call-center industry. Thousands of call-center jobs disappeared in Sacramento in the early 2000s, when tech companies decided to move those functions offshore as a cost-cutting strategy. The phenomenon drained jobs from other parts of the United States as well.

Now some of those jobs are drifting back to the United States. A Pennsylvania company called Advanced Call Center Technologies has opened two locations in the Sacramento region in the past few years, for instance. SolarCity Corp., the solar-panel company from San Mateo, has established a call center in Roseville that employs more than 400 workers.

“That’s a credit to Sacramento that you’re working with this re-shoring trend,” said Jack Boyd of The Boyd Co., a New Jersey site consulting firm that has worked with companies in the region. “There is a re-shoring of these types of jobs, from the Caribbean back to the States, from India back to the States.”

The region’s experience with high technology has been up and down. Intel Corp.’s research campus in Folsom remains one of the region’s largest employers, and Apple Inc. is planning to significantly expand its repair business in Elk Grove. At the same time, Hewlett-Packard has significantly trimmed its Roseville workforce, largely because of internal problems.

Sacramento has had some successes with biotech, life sciences and green-tech companies, but not enough to truly transform the economy. The region’s new economic-development guru, Barry Broome of the Greater Sacramento Area Economic Council, has said he wants to make Sacramento a mecca for industries related to water and agricultural technology.

Boyd said Sacramento has “the wherewithal to do that” and expand well beyond its traditional role of government town. Tech-support facilities such as Voxpro’s can help fill out the region’s jobs portfolio.

“It’s something that a full-bodied labor market needs,” the New Jersey consultant said. “There is a fit for these types of companies.”

Shari Little, chief performance officer at the Greater Sacramento council, wouldn’t comment on the Voxpro development but said: “New jobs (coming) to the region are always a good thing.”

Kiely said the Voxpro jobs will pay anywhere from $32,000 to $150,000 a year, plus benefits.

“This is very premium customer support, skilled customer support,” he said. He said Sacramento’s labor force “really blew us away.”

The company has leased temporary space on Parkshore Drive, near Folsom Boulevard, and is planning to expand to permanent quarters in a building next door.

Privately held Voxpro, founded by Kiely and his wife, Linda, some 20 years ago, operates a small sales office in Mountain View; the Folsom site is its first significant operation in the United States. The company is in the midst of raising $20 million to expand to other locations.

“This is just the beginning of our footprint in the United States,” Kiely said.

Source: The Sacramento Bee (Distributed by Tribune Content Agency, LLC.), Dale Kasler