FRESNO COUNTY – In a thought-provoking forum held at Fresno City College, a panel of experts came together to discuss the future of Fresno’s technology sector after Bitwise Industries’ downfall, shedding light on both the promising and challenging aspects of the situation.
On Nov. 14, in the Old Administration Building Auditorium on the campus of Fresno City College and in front of about 100 audience members, local radio station KVPR and National Public Radio (NPR) sponsored a community forum on the fate of the future of Fresno’s technology sector after the historic collapse of Bitwise Industries.
Jenn White, the host of NPR’s program, 1A, moderated the discussion. On stage with White were local real estate developer and former Bitwise board member, Will Dyck, Chancellor of the colleges of State Center Community College District, Dr. Carole Goldsmith, and KVPR reporter Esther Quintanilla, who has reported extensively on the company.
White asked the panelists to opine on multiple subjects relating to the now defunct company. The panel also fielded questions from audience members.
Despite the universal opprobrium heaped on Bitwise founders, Irma Olguin Jr. and Jake Soberal, Dyck, Goldsmith, and Quintanilla had good things to say about what Olguin, Soberal, and the company intended to accomplish.
Goldsmith said she first heard of the company when she was working at West Hills College in Coalinga.
“I was impressed by how they tried to make education cool,” she said. “They had a message that resonated with young people. I remember we took students from Firebaugh, Coalinga and Tranquility, and brought them to Fresno (Bitwise) where they could get into coding.”
Quintanilla was initially impressed by what the company hoped to do. She was also impressed by Olguin’s humble beginning, having been born into a family of farmworkers.
“Bitwise had a big dream,” said Quintanilla. “It wanted to bring tech to Fresno. It promised jobs. Fresno residents come from an ag background. They had disadvantages. Bitwise promises seemed like a lifesaver to people, and people identified with Irma and her background.”
Wyck’s introduction to the company was more pragmatic.
“I have a background in redevelopment,” he said. “When I met them, I heard their story. I understood what they were trying to do. It made sense. Education, technology, real estate. For me, this was perfect capitalist vertical integration.”
Dyck joined forces with the company and set about revitalizing downtown. He eventually became a board member. In time, Dyck and Bitwise restored buildings downtown. And despite the company’s collapse, the buildings remain. A former Bitwise employee told the panel, she and another employee started their own company, Reclaim Technologies, and are working out of a former Bitwise property.
As everyone by now knows, Bitwise is no more. This summer, the company laid off 900 employees in multiple cities. Olguin and Soberal filed for bankruptcy. They are facing multiple criminal counts, including wire fraud and bilking investors out of $100 million.
White asked the panelists what red flags they saw alerting them the company was not what it purported to be.
“When I started reporting on the company earlier this year during the fallout, a lot of dots started not to connect,” Quintanilla said. “How did they get their funding? What was their business model? It was hard to define what was their deliverable. Difficult to define what exactly they were doing.”
Dyck echoed her observations, saying that Bitwise had problems from the very beginning, and that they were too eager to do good while being less eager to build a model to sustain that model.
“By the time I left, though I didn’t think there was anything fraudulent going on, I didn’t trust the founders,” he said. “I was leaving as the venture capitalists were coming in. At that time, everything was siloed. The CFO was not allowed to come and talk to the board. The individual departments were siloed and didn’t interact. Everyone was in their space and they stayed in that space. It was systemic siloing to suppress anyone from ever seeing the 10,000 ft view from what was going on.”
For Goldsmith, she had questions about the company’s ability to sustain itself. She noticed early on that the company was hiring the people who passed through its apprenticeship program but was not hiring out these individuals to other companies.
“Having run apprenticeship programs, that model wasn’t sustainable,” said Goldsmith. “You train people and place them into other employment, not necessarily your own. You can take on a few, but if you continue to hire the ones you’re training, it’s not a sustainable model. You have to get other employers involved. There are a lot of lessons to be learned in that Apollo 13 moment in trying to deconstruct what happened.”
Dyck, Goldsmith and Quintanilla agreed that Bitwise’s collapse by no means heralds the end of technology for Fresno or the Central Valley.
Goldsmith said that, from an educator’s point of view, the company forever changed how young people view education.
“They did make education cool. We (educators) learned from that. I will thank them for that,” she said. “They made education more inviting and let people know they belong here. And we’ve changed how we bring people in. We’re trying to make it easier to go to school because it should be easier to go to school. I think all public institutions should look at that. If you can buy a car online, you should be able to enroll in a class online.”
Dyck said neither the city nor its aspirations should be defined by the company’s demise.
“Bitwise was one company in a big city,” said Dyck. “Time will pass and this will go away. The people are still here. The companies are still here. We had one very spectacular failure. Technology is speculative; everybody knows that. We have lots of companies coming up every day. I don’t have any concerns about the Fresno tech community.”
Quintanilla is a Central Valley native. She said she is optimistic for Fresno and believes the city’s economic outlook is strong.
“Central Valley is my home. I’ve lived here my entire life,” she said. “Fresno is ready for growth. My hope is more companies come here with that dream in mind. There is a bright future ahead for Fresno and it is just a matter of time before it sees its legacy.”