Palo Alto: Good Building Karma

Miguel Helft of the New York Times recently wrote a fun article, “Rental Building’s Good Karma Nurtures Success,” about the amazing number of successful Silicon Valley businesses that got their start in the unassuming rental building at 165 University Ave in Palo Alto.

Past tenants of this entrepreneurial hot spot include PayPal, Google, eBay, Logitech (a computer peripheral manufacturer), and Danger (the company that created the T-Mobile Sidekick smartphone).

But is this karma or some kind of chemical reaction that simply happens when you mix entrepreneurial engineers, Stanford brainpower, and venture capitalists looking for the next great business idea?

The New York Times talked about this phenomenon in their editorial “The Death of Geography?”: “Silicon Valley continues to act as a leading incubator for high-tech start-ups. Once you have a critical mass of software engineers and venture capitalists attending the same happy hours, a certain ferment takes place. News spreads fast in person, not just on MySpace. As a result, a city with a strong concentration of companies and a trained labor force — like New York in finance — can maintain its position within an industry.”

And this is why, despite the insanely high real estate prices, start-ups like Facebook keep popping up Palo Alto.

Photo credit: Noah Berger for The New York Times