I thought this a neat article about how a couple of Iranian businessmen, refugees from the 1979 Revolution, settle in California, open a carpet business in Palo Alto, buy the building, and rent out to start-ups that become Logitech, PayPal, and Google. They invest in startups, support and encourage them, and have made out handsomely in their new country. Only in America, as we say.
New York Times Sept. 14, 2007, P. 1:
Rental Building’s Good Karma Nurtures Success
PALO ALTO, Calif., Sept. 13 — The building at 165 University Avenue here has been so good to the Amidi family that Saeed Amidi says it is blessed with good karma. There are some high-technology entrepreneurs who would agree.
Over the years, the nondescript two-story building, which the Amidis have owned since the early 1990s, has been home to a series of Silicon Valley start-ups that became stars.
The Amidis, a family of Iranian immigrants, along with their partner Pejman Nozad, also own an Oriental rug store here that has put them in contact with many more entrepreneurs and investors. The store and the building have helped them forge an unusual path into the ranks of Silicon Valley’s kingmakers.
“We believe in good karma, good energy, good feeling, and we believe some buildings have good energy,” Mr. Amidi said, speaking in a slow, accented lilt.
Like many other landlords in the dot-com boom, Mr. Amidi demanded a chance to invest in some of his tenants. One was PayPal, the online payment company, whose sale to eBay for $1.5 billion gave the Amidis a multimillion-dollar payout and a taste for more technology investing.
Logitech, the maker of computer peripherals, and Danger, which created the T-Mobile Sidekick smartphone, have also been tenants. And it was in that building that Google went from toddler to budding technology titan.
Mr. Amidi and Mr. Nozad have tried to capitalize on the reputations of those companies by marketing the University Avenue offices as a “lucky building.” But they have also sought to take whatever magic the building had, real or perceived, and reproduce it on an industrial scale.
“Our idea is how we can bring the good charm down to Sunnyvale,” Mr. Amidi said.
Sunnyvale, some 12 miles southeast of Palo Alto, is where they created the Plug and Play Tech Center, a three-story 150,000-square-foot building where they rent space and provide other amenities to start-ups. Since it opened early last year, it has become a hub of entrepreneurial activity that now houses 108 fledgling companies.
Their position as landlords gives Mr. Amidi and Mr. Nozad an early look at such businesses, and with that, a chance to invest before others get to them. The investment fund they created, Amidzad, has helped bankroll 40 companies, putting $25,000 to $1 million into each.
Mr. Amidi and Mr. Nozad refuse to discuss their returns, beyond saying that seven of their portfolio companies have been acquired. They acknowledge that at least one of them was sold at a loss. Still, their power-broker status has impressed some longtime Silicon Valley figures.
“They really get the way Silicon Valley works,” said Ron Conway, an investor who has helped finance dozens of high-tech companies, including Google. “They started as landlords to technology companies and then worked their way up the food chain.”
The Amidis ran a string of successful businesses in Iran, then fled after the Islamic revolution. They arrived in California in 1979 and quickly set up a number of new businesses under the umbrella of the Amidi Group. These included the rug store, the Medallion Rug Gallery; an international water distribution business, which, according to Mr. Amidi, brings in $150 million a year; and large real estate holdings, which are mostly managed by his brother, Rahim Amidi.
But as the boom in technology gathered force in the late 1990s, its lure proved irresistible. Medallion Rug and the University Avenue building proved ideal entry points for a family with scant background or connections in the technology world.
It was at Medallion Rug, for instance, that Mr. Amidi and Mr. Nozad met Andy Rubin, Danger’s founder, when he came in to buy a carpet. The sale turned into a lengthy negotiation during which they learned of Mr. Rubin’s start-up plans. Once the deal for the carpet was settled, Mr. Amidi and Mr. Nozad told Mr. Rubin that they invested in start-ups and wanted him to meet Mr. Amidi’s father, now deceased.
“He came over to our offices and we showed him what we were planning on doing,” said Mr. Rubin, who has worked at Google since it acquired another start-up he founded. “He looked at us, and he told Saeed and Rahim that he wanted to invest.”
Their investment fund put $400,000 into Danger, and the Amidis gave the company a discount on office space. Mr. Amidi says the decision was more a bet on Mr. Rubin’s abilities — as demonstrated during negotiations over the rug — than on the technology itself.
“Any time you do a financial transaction with someone, you get to know how they think, how they negotiate, what are their parameters,” Mr. Amidi said. “We kind of value that as a big advantage.”
Little by little, Mr. Amidi and Mr. Nozad turned the people they met at Medallion Rug into a network of friends and advisers that includes scores of entrepreneurs and venture capitalists.
But if Medallion Rug provided a place for the Amidis to befriend some of Silicon Valley’s technology elite, it was the building at 165 University Avenue that gave them a sort of celebrity.
Google was lured to the building by a “for lease” sign that mentioned some of the previous tenants, like Logitech. “I said jokingly, ‘Maybe one day they’ll have the same sign with Google’s name on it,’ ” said Craig Silverstein, the first employee to be hired by Google’s two founders.
When it moved into the building early in 1999, Google had six employees. By the time it left six months later, about 10 times that many were crammed into the space. More important, the company had secured financing from two of the best-known venture capitalists in Silicon Valley and had signed its first big partnership, with the Internet browser maker Netscape.
The Amidis did not have a chance to invest directly in Google, though they did so through a fund run by Mr. Conway. They did insist on getting shares in their next tenant, PayPal, though not before asking a tech-savvy acquaintance to interrogate the company’s founders.
“I thought I would sit down with a guy who was very good at figuring out drywall and he would ask how you plug computers in,” said Max Levchin, a founder of PayPal. “But they brought in a guy who was a very strong engineer. The due diligence far exceeded our expectations.”
The success of Google and PayPal brought more tenants to the Amidis. Kevin McCurdy, for instance, worked across the street from the building when Google was a tenant. In 2004, he helped found Picaboo, a maker of custom photo books.
“When we started Picaboo, we specifically targeted that space because Google had been there,” he said of the building. “It was a magic space.”
The magic has yet to produce another blockbuster hit. But Mr. Amidi and Mr. Nozad have refocused their energy on the Plug and Play center, where they try to eliminate logistical headaches faced by entrepreneurs. They provide flexible space with no long-term leases, and ready access to data centers and telecommunications infrastructure.
They also offer amenities that only larger companies can typically afford. They are installing a gym, and they set up the cafeteria with the help of Charlie Ayers, the chef who started Google’s well-regarded cafeterias.
Omid Kordestani, a top Google executive, said Mr. Amidi had a knack for “learning from what is around him.”
“This is where his sweet smartness comes in,” said Mr. Kordestani, who described Mr. Amidi as a friend. “The Plug and Play has a lot of the elements of Google, the cafeteria, the colors.”
Mr. Amidi has helped promote Plug and Play with a seemingly constant string of events that put its start-ups into contact with other entrepreneurs, as well as investors and larger companies that may become partners or acquirers. The introductions have helped their tenants attract some $200 million in financing.
On a recent tour of Plug and Play, Jeff Crowe of Norwest Venture Partners bumped into the chief executive of Lending Club, one of the center’s start-ups. The two started talking, and last month, Norwest helped lead a $10.26 million round of financing in Lending Club. It was one of half a dozen investments that Norwest has made in Plug and Play tenants.
Mr. Crowe saluted Mr. Amidi’s venture capitalist skills, “As an early-stage V.C.,” he said, “he is certainly someone you want to have a relationship with.”
The reputation of Plug and Play, however, has yet to eclipse the reputation surrounding 165 University Avenue.
“I’m not especially superstitious, so I wouldn’t say the building has luck per se,” said Peter Thiel, another PayPal founder. But he said the building was just in the right location. Like many others who worked there, he spoke fondly of the terra-cotta tile patio, revolving around a small fountain, that was a natural spot for socializing.
“If I was starting a company again,” Mr. Thiel said, “I would definitely want to use that office space again.”