This story is one of two examining the collapse of Bitwise Industries. See previous coverage here. KVPR and 1A are hosting a community forum on Nov. 14 at Fresno City College.
FRESNO, Calif. – Alex Treas remembers the six-minute call on Memorial Day, when the co-founders of Bitwise Industries announced the sudden furlough of all 900 employees.
“It was a straight panic,” says Treas, a former director of co-work for the company. “It was like going through the seven stages of grief. At first I was like, ‘OK, they're just going to figure it out right. We’re furloughed, but we're gonna be back.’”
Except the decade-old tech startup that had been slowly built in California’s heartland wasn’t coming back – at least not in the same way.
Lawsuits piled up against Bitwise Industries in the following days and weeks, exposing the deep financial troubles it was facing.
It was a straight panic.Alex Treas
Now, a federal investigation accuses its co-founders Jake Soberal and Irma Olguin Jr. of swindling investors out of $100 million. The Securities and Exchange Commission separately charges that the company with inflating its financial records when it raised $70 million.
In the chaos, employees faced the brunt of the fallout. Their furloughs quickly turned into layoffs. In Fresno, nearly 400 people were suddenly out of a job.
What seemed to be a blooming hub for innovation in Fresno and the Central Valley was fading.
‘We could create something’
But while some left the budding Fresno tech space, others like Treas say they weren’t ready to let things go so quickly.
He and former colleague Jenn Guerra, a former project manager at Bitwise Industries, decided to establish their own company soon after.
“When everything fell down, I felt confident that we could create something,” Guerra says.
They named it Reclaim Technologies. Their slogan – all things considered – is ‘Tech with a Heart.’
“Nothing about our experience [or] our skills went away – only the company went away,” Treas says. “We wanted to reclaim the tech spot that Bitwise had.”
Reclaim Technologies is a small team of eight software developers and engineers, all of whom were displaced from Bitwise Industries.
“We didn't really even have to interview people because we knew their skill set,” Treas says. “It's impressive how many skilled, talented developers we were working with.”
Bitwise Industries sought out to create opportunities for disadvantaged communities. Treas and Guerra say they’re keeping that commitment, so they based their company in downtown Fresno.
They lease an office space inside the former corporate headquarters of Bitwise Industries in the growing Fresno Brewery District. Guerra sees it as a small flashing light to signal tech is still alive in the Valley.
“We didn't have to run away or get thrown out,” says Guerra. “We could stay here and still be awesome, abundant. Literally reclaim [our space].”
The idea of Bitwise Industries spreads
Reclaim Technologies isn’t the only new venture that came to be after the crash of the company. 60 miles south – former Bitwise Industries employee Esteban Solis Loya is laying the groundwork for his own operation.
Solis Loya got started at Bitwise Industries nearly five years ago in a workforce training program. There, he learned the basics of code and web development. Over the years, he worked closely with students, and was promoted to a leadership position three months before the company fell.
We're not going to rely on the big companies in Silicon Valley to come out here.Esteban Solis Loya
He grew up in the rural agricultural town of Lindsay in Tulare County. It’s a city of 12,000 pushed up against the foothills – far from the profile found in Fresno. Here, Solis Loya thought, there should be more opportunities for young entrepreneurs like him.
“In a lot of ways, these small Valley towns, like Lindsay, mirror a lot of what downtown Fresno looked like [before Bitwise],” says Solis Loya. “So I thought well, I mean if Bitwise could do it in Fresno then why can‘t I do it here?”
So Solis Loya created San Joaquin Industries. The small startup is currently gearing up to design websites for clients, primarily local restaurants and small businesses. But Solis Loya hopes that in the future, his company can teach web skills and software development to students in the area.
“We're not going to rely on the big companies in Silicon Valley to come out here,” Solis Loya says. “Why not just do it ourselves?”
For people like Solis Loya, Treas and Guerra, the crash of Bitwise Industries wasn’t the end of tech in the Valley, but a sprouting of other ideas.
“With Bitwise gone, it’s given the little guys more room to grow,” Guerra says. “I’m excited for the future.”
This story is part of the Central Valley News Collaborative, which is supported by the Central Valley Community Foundation with technology and training support by Microsoft Corp.
