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Taylor MadeTaylor Guitars: Guitar Heroes

Founded: 1974    Employees: 500
Projected 2010 sales: $70 million
What’s next: “There are countless opportunities for us,” says Bob Taylor. “There are guitar styles we don’t make yet, and markets we don’t service. If it has to do with guitars, we like to participate.”

In the beginning, they called it the Westland Music Company. Its first day of business was October 15, 1974, after Bob Taylor and Kurt Listug pooled their resources with Steve Schemmer and bought the American Dream guitar shop in Lemon Grove. Taylor was 19, Listug was 21.

“Sam Radding, American Dream’s owner, announced one day in 1973 that he was going backpacking for two weeks and wanted to sell the shop upon his return,” says Listug. “He left it up to us working there [Schemmer, Listug and Taylor all worked for Radding at the time] who would buy the shop from him.”

In due course, Bob Taylor would become the company’s namesake. A luthier with natural gifts, he made his first guitars while still in high school.

“I was a guitar builder, and Kurt was interested in doing finance, administration and sales. We made the decision to partner up,” says Taylor .

The rent was $163 per month, and the roof leaked when it rained. Westland Music was flooded on opening day. Business was an uphill battle, but by the end of that year, they’d made and sold six guitars.

Today, Taylor Guitars has 500 employees. They turn out 500 guitars every day.

Talk of a Taylor guitar often invokes the names of the furniture-quality woods used to make one: big leaf maple, western red cedar, claro walnut, koa ebony. But it is the rich and honeyed sound of Taylor’s acoustics that makes them the first choice of pop stars such as Dave Matthews, Prince (Taylor built the purple 12-string seen in Purple Rain), Jason Mraz, Taylor Swift, Bonnie Raitt, Neil Young and more.
Taylor and Listug eventually bought out Schem­mer and moved to Santee. In 1992, they relocated the entire operation to a giant state-of-the-art facility in El Cajon, where the company resides to this day.
 

MatuseMatuse: The New Suitmakers

Founded: 2006  
Employees: 6 full time; 10 surfers; 10 sales reps
What’s next: Matuse recently signed with Surf Hardware International, a large distributing company, for entry into the competitive Australia and New Zealand markets. “Other than that, we’ve got a couple of things we’re working on that are more skunkworks at the moment,” Campbell says, slyly refusing to elaborate.

The surfing world has warmed up to Matuse in a hurry. In just four years, the wetsuit brand — run out of an unassuming law office in University City—  has proliferated and can be seen at surf breaks around the world as well as in San Diego.

After a varied young career that included interning for Charles Barkley’s agent at IMG in New York and in the creative department at Deutsch advertising in Los Angeles, John Campbell discovered (on the Internet) Japan’s Yamamoto Corporation, which produces a limestone-based neoprene. This material, dubbed geoprene, holds functional advan­tages over the traditional petroleum-based stuff: It’s thinner, absorbs less water and is more environmentally sustainable.

It struck Campbell that if someone developed the right relationship with Yamamoto and the right branding, the product could be a hit. “I saw it as an awesome opportunity to do something really unique,” the San Diego native says.
Campbell brought in his friend Matt Larson, Mitch’s Surf Shop manager. A surfing product consultant, Larson always preaches function-first, solution-specific apparel.

It also helps to have some big names wearing your product. Citing a desire to honor surfing’s birthplace as well as put down roots there, Matuse signed Hawaiian surfer Mikala Jones and his extended family. However, the company also wanted a presence in its own backyard and signed legendary longboarder Joel Tudor, as well as locals including big-wave surfer Derek Dunfee (one of San Diego Magazine’s People to Watch in 2010), John Maher, Pat Millin, Zach Plopper and Chris del Moro. And Matuse recently signed its first World Championship Tour surfer, Kai Otton, for presence on the competitive circuit.

One of the key words around Matuse’s office is “hustle.” It’s as easy to spot in the company’s results as it is to see Matuse wetsuits at surf breaks around the world.

Stone Brewing CompanyStone Brewing Company: the Taste of Success

Founded: 1996    Employees: 322
Revenue: $48.4 million in 2009 (about 23 percent growth expected in 2010)
Production: 99,000 barrels in 2009
What’s next: Total and complete world domination, naturally. Earlier this year, the brewery put out a Request for Proposals to European municipalities, cities and countries, searching out places for a facility a Stone’s throw across the pond. So far, sites in Germany and Bulgaria look the most viable, but the hunt is far from over. Local Stone enthusiasts looking to get their hands on their beer and bistro fare can get their fill of both when the catering operation launches later this year, featuring beer-inspired cuisine that comes complete with keg service.

For many, the term “America’s Finest City” conjures images of smug gargoyles hoisting froth-rimmed steins overflowing with beery goodness. This is the logo that adorns 22-ounce bombers of Arrogant Bastard Ale, a palate-punching brew credited for both helping ignite the burgeoning U.S. craft-beer renaissance and turning the attention of the country — and other beercentric nations — toward sunny San Diego. Today, our county is revered as ground zero for American brewing ingenuity, but it was Escondido’s Stone Brewing Company and its bold Bastard that founded the stellar reputation our region now enjoys.

After gaining notoriety, Stone not only continued pushing the artisanal ale envelope with aggressive beers, they set up their own distribution company, which got their beers to market along with the wares of other top-quality local breweries like AleSmith, Ballast Point and The Lost Abbey. San Diego’s bid for suds supremacy has been bolstered by getting its finest exports in front of thirsty consumers; today, Stone’s distribution accounts for 1 percent of all beer sold worldwide.

No brewery contributes more of its liquid assets to local charities. Even Stone’s employees benefit from the company’s supportive ways. Case in point is art director Mike Palmer, who in 2000 founded Mike’s Beer Cheese (mikesbeercheese.com), a company producing four varieties of fromage spiked with beer (like Pale Ale with sun-dried tomato and basil or Ruination IPA with fresh hop mustard). It’s been a staple at many a Stone event, and starting in November, the flavorful cheese will be for sale at the brewery.

Taylor MadeTaylor Made: The Metal Shop

Founded: 1979   Employees: 1,500
Revenue in 2009: $1.2 billion
What’s next: More secretive than a defense contractor, Taylor Made and its future offerings are anyone’s guess. But whatever comes out of its Carlsbad headquarters will likely influence the game in a major way.

San Diego hasn’t always been the center of the universe for the golf industry. In the 1970s, with Ram and Wilson both based there, Chicago was the city. But that changed when Gary Adams set up Taylor Made here (with Ely Callaway following suit soon after), just as the defense industry in San Diego was beginning to downsize. Golf provided new design opportunities for some unemployed aerospace engineers.

Started with a $24,000 loan in 1979 by Gary Adams, Taylor Made Golf introduced the first stainless steel driver. Adams called his new club the Pittsburgh Persimmon and stuffed the head with foam to dampen the pinging sound made by the steel. His “steel wood” caught on in a big way; when was the last time you saw a persimmon wood in someone’s golf bag? Today Taylor Made clubs are used by pros Dustin Johnson, Sergio Garcia and Sean O’Hair, among many others.

Callaway GolfCallaway: Bigger Is Better

Founded: 1982  
Employees: 2,300
Revenue in 2009: $951 million
What’s next: Mum’s the word, but you can expect that whatever new product emerges, it will impact how the game is played.

You can offer cash, hot stock tips, even your firstborn, but you won’t get in the door. Callaway Golf maintains top-secret research and development facilities at its Carlsbad headquarters (as does Taylor Made), and they’re strictly off-limits to all but a few employees. And Phil Mickelson and Annika Sorenstam, two of Callaway’s top pros.

Ely Callaway’s team is responsible for creating the oversize titanium club head in 1991 that was marketed to golfers as Big Bertha. He named his new club after a World War I German cannon. In the years prior, Callaway was a Temecula vintner. He sold his winery and retired at the age of 60, after which he spent a lot of time on the links.

Ely became aware of a small club manufacturer named Hickory Stick and bought a stake in the company in 1982. Hickory Stick became Callaway Hickory Stick USA, and Ely became president and CEO of the new company. He moved Callaway Hickory Stick to Cathedral City, California — and in the beginning, he delivered clubs out of the trunk of his car.

By 1985, Callaway had relocated to Carlsbad and was on the verge of unleashing one of its earliest innovations: computer-controlled milling to ensure clubface accuracy. Six years later, these golf specialists would introduce their ultimate weapon — the aforementioned Big Bertha — and sales would effectively double.

Callaway merchandise has been copied over the years, if poorly. Fake clubs and bags at low prices have flooded the Internet on various auction sites. But not even counterfeit items — nor anything else, it seems — can slow this company down.

Northrop GrummanNorthrop Grumman: Flying with No Hands

Founded: 1934 (as Ryan Aeronautical)  
Employees: 5,000 in San Diego, 2,300 of them in the Aerospace Systems sector
Revenue: $33.8 billion sales (company-wide, 2009)
What’s next: On the record, Northrop Grumman plans further development in the Global Hawk family, and other nations are lining up to purchase. The company will also continue to focus on the miniaturization of unmanned aircraft technology, such as the Bat, and autonomous, unassisted aviation.

When people think of San Diego’s industries, defense contractors, biotech and action sports usually spring to mind. Overlooked, though, according to Northrop Grumman Aerospace Systems sector vice president Jim Zortman, is the autonomous machine industry.
“San Diego is the center of the universe for unmanned aerial vehicles [UAVs],” he says.

You’ve seen Northrup products in the news lately. Those beautiful photos of all the recent hurricanes? Thank the Global Hawk, “a San Diego product through and through,” says Zortman. In addition to NASA, the Air Force and Navy, NATO and Germany’s Ministry of Defense also own the remote-controlled bird for intelligence, surveillance and reconnaissance pur­poses. And in its Fire Scout, the only unmanned, autonomous helicopter operating on Navy ships, Northrop has replaced the pilot station in a Schweizer ’copter with what Zortman calls their “secret sauce” of control laws and software.

Then there are the military-related projects you probably won’t ever hear of, although one they’re more upfront about is the X-47B, a stealth-looking combat aircraft designed to take off, fly and land completely autonomously from an aircraft carrier. There’s also the Bat, a small reconnaissance plane with a 10- to 12-foot wingspan designed not for long range but for peeking just over the hill, for example.
While Northrop Grumman is headquartered in Los Angeles, its aviation genes are all San Diegan. Ryan Aeronautical, based for years at Lindbergh Field, built the Spirit of St. Louis and was working on unmanned aircraft since the 1950s. Ryan was purchased by Teledyne in the ’60s, which in turn was bought by Northrop Grumman in 1999. Of Northrop’s 5,000 employees in San Diego, 2,300 work in Rancho Bernardo’s Aerospace Systems sector (up from around 300 just 11 years ago) to develop the technology, software, engineering and logistics for its unmanned systems; the actual machines are manufactured up the road in Palmdale. The sector has good relations with UCSD and SDSU — routinely in the top schools from which it hires.

Looking toward the future, Zortman says we should expect to see more unmanned machines. “There’s a demand on the military side, but just like aviation in its early years, that demand will be overcome by the demand from the commercial side.”

Started with a $24,000 loan in 1979 by Gary Adams, Taylor Made Golf introduced the first stainless steel driver. Adams called his new club the Pittsburgh Persimmon and stuffed the head with foam to dampen the pinging sound made by the steel. His “steel wood” caught on in a big way; when was the last time you saw a persimmon wood in someone’s golf bag? Today Taylor Made clubs are used by pros Dustin Johnson, Sergio Garcia and Sean O’Hair, among many others.

PranaPrana: The So-Chill Climbers

It’s an American entrepreneurial cliché: the business that starts in the owner’s garage. Prana started out that way for Beaver and Pam Theodosakis in 1993 and expanded slowly — room by room in their house on Mimosa Drive in Carlsbad.

“My wife and I lived there with three or four roommates,” Beaver explains. “As the company grew, we started to throw out roommates one by one to use their bedrooms for shirts, pants, sewing or whatever. So Pam had a real incentive at the time to grow the business so we could get rid of these guys,” he says with a smile.

Today, the Vista company produces thousands of garments a year, but all retain the charm and attention to detail the couple added from day one that made Prana (“breath of life” or “vitality of spirit” in Sanskrit) famous in the first place in the rock-climbing and yoga communities: hang tags made from local newspapers, hemp string, hand-branded deerskin labels, dyed organic cotton — in other words, fashion-forward outdoor apparel made of natural materials.

This mix caught on to the point that climbing stars approached Prana expressing an interest in the product. None, however, were more important than Chris Sharma, the sport’s 29-year-old undisputed king, who’s represent­ed the company since he was 14.
The company now boasts 88 people, including seven of the 10 original employees.

“It’s never felt like work,” Theodosakis says. “Working with like-minded people, wheth­er it be our athletes, our customers or employees, is a really rewarding way to make a living.”

KashiKashi: The Ingrained Habit

Founded: 1984 
Employees: 50-60
What’s next: Associate marketing director Jeff Johnson won’t say exactly, but he promises that Kashi is planning to take things to the next level. “The key areas we’re working in are weight management and healthy snacking.”

It was the quest for a healthier breakfast cereal that led to the mixture of seven whole grains and sesame that would, over the course of 25 years, become the foundation for a product line of grain-rich healthy alternative foods. In 1983, La Jollans Philip and Gale Tauber were exploring the macrobiotic lifestyle and dietary regimes based on protein and fiber-rich grains. They hit on a mix that worked for them and by 1984 were ready to take their discovery to market. But first, they needed a name for their fledgling company. Eventually the Taubers landed on Kashi, a word they created by combining kashruth, the Jewish dietary laws (read: kosher), with kushi, borrowed from Michio Kushi, the Japanese philosopher who introduced Americans to the macrobiotic way of living, back in the 1950s.

Today, Kashi is owned by the Kellogg Company (which purchased Kashi in 2000), but it is still headquartered and independently operated in La Jolla. The Taubers are no longer involved in the company, but they attended Kashi’s 25th-anniversary celebration last year, and they maintain a relationship.

The product line has mushroomed from the original breakfast pilaf to include a variety of high-protein/high-fiber cereals, snack bars, cookies, crackers, pizzas and frozen entrées, all formulated with the original good-living-through-better-nutrition mindset that first encouraged the Taubers to experiment with whole grains.

OptimerOptimer: The Superbug Stoppers

Founded: 1998 (went public in 2007)
Employees: 77
Capital generated from IPO: $50 million
People affected by CDI in 2009: 700,000
What’s next: Optimer has just completed phase III tests on Pruvel, an antibiotic treatment for infectious diarrhea, and plans to submit it to the FDA in the first quarter of 2011. Two drugs targeting breast cancer and pancreatic cancer should enter phase II and III trials at the end of 2011 and in 2012 in Asia and the United States.

No longer just the frightening monster of sci-fi horror films, these drug-resistant bacteria we call “superbugs” now lurk in hospitals, rest homes and long-term care facilities, preying on the sick, old and weak. After years of heavy antibiotic exposure, microbes and conditions like C. difficile infection (CDI) have become immune to most common antibiotic treatments. San Diego – based Optimer Pharmaceuticals hopes to ease those worries with a new CDI treatment called fidaxomicin.

Fidaxomicin’s potential rests in its ability to target C. difficile while leaving other bacteria undisturbed. Current antibiotics have the
unfortunate tendency to harm or kill not only the intended harmful microbes but also the natural bacteria that assist in normal proc­esses like food digestion and metabolic functions. The collateral damage opens fertile ground for heartier, less friendly bacteria. C. difficile is one of the heartiest, setting up shop in the colon, rapidly reproducing and causing lengthy bouts with diarrhea and other infections, sometimes fatally. 

Optimer’s approach uses a new type of antibiotic called a macrocycle, which fo­cuses on the narrow spectrum of bacteria that includes C. difficile, killing it off while leaving the body’s healthy bacteria unaffected.

“It’s really a major advancement,” says CEO Pedro Lichtinger. “For 25 years there has been nothing new in this segment. In addition, this particular drug has demonstrated very clear superiority against the best product today in this class in recurrences.” In fact, the phase III trials went so well that the company expects to be fast-tracked through the FDA process and have the drug on the market mid-2011.
The company began efforts against CDI in 2001 when it acquired its macrocycle molecule from Abbot Pharmaceuticals. In 2003, Optimer filed the Investigational New Drug application with the FDA and began trials. Phase III, the final stage of testing, lasted three years and put the company in the position to grow and start assembling a sales force for the commercial structure that fidaxomicin’s release will require.

“It’s very exciting,” Lichtinger says. “When we come to work for a biotechnology company, [we] dream about bringing society something that will benefit patients, and we’re very close to doing that.”

WD40WD-40: The Icon

Founded: 1953  
Employees: 300
Sales: $300 million
What’s next: Be on the lookout for the WD-40 shield to start appearing on other products. Ridge says the company has invested millions of dollars into researching other products that are made better by the use of WD-40 and will only put its logo on the ones that “wow” consumers the way the original formula has for more than 50 years.
Fun fact: WD-40 stands for “water displacement, 40th attempt,” the number of times it took the original inventor to actually displace water and prevent corrosion during testing and declare the solution successful.

As logos go, the blue-and-yellow WD-40 shield is as iconic as it gets. Not as sexy, perhaps, as the Nike swoosh, or as classically American as the Coca-Cola script. But when you hear a squeaky door, hinge or wheel, you probably think of the blue can with the red straw. And you probably have a can or two in the garage ready to go.

In fact, CEO Gary Ridge says people in more than 150 countries have WD-40 on hand. The secret sauce inside is still made in San Diego, where it was invented in 1953 in a facility off Morena Boulevard. Ridge is proud that WD-40 has yet to lay off one employee in the recession and instead has grown from $80 million in sales when he joined in 1987 to more than $300 million in sales worldwide today.
“San Diego is a really convenient and enjoyable place to lead a company in a global economy. I can be on the phone with Europe in the morning and Asia after lunch,” says Ridge, who lives in a downtown high-rise and likens San Diego to his hometown of Sydney, Australia. “It’s a big city with a little-city feel.”

The official fan club of WD-40 users is more active than ever, thanks to the Internet and social networks like Facebook. The club proudly publishes a running list of more than 2,000 uses for the product, everything from “lubricates rusted screws” and “softens stiff leather sandals” to “removes a boa constrictor stuck in the engine compartment of cars.”

ViastatViaSat: The Heavyweight

Founded: 1986 
How it started: Founders Mark Dankberg, Mark Miller and Steve Hart launched the company in Dankberg’s garage in 1986 with $25,000 in capital investment.
Employees: 2,100+ worldwide, 1,000 in San Diego
Revenue: $600+ million
What’s next: After the acquisition of WildBlue in 2009, ViaSat heads full speed into the Internet service business with plans to launch a new satellite in 2011 that will help provide Internet service at prices and speeds comparable to today’s top cable and DSL providers.

Three engineering buddies. A few thousand bucks. A garage. The story of how ViaSat started in 1986 reads like the first act of the ultimate rags-to-riches screenplay every budding entrepreneur wants to star in. The three friends in this case were Mark Dankberg, Mark Miller and Steve Hart. Today, their start-up has grown into one of the largest defense contractors in the country, managing multimillion-dollar contracts and designing and building everything from satellite antennas to interactive simulation stations, from its headquarters in Carlsbad and manufacturing facilities around the world.

“There is an advantage to doing business here, and that is our employee base. There is nothing I can get here that I can’t get anywhere else, except for the people,” says Kevin Hunter, vice president of operations. “We have a real strong connection with UCSD and the business and academic communities.”

Named one of Forbes’ 200 Best Small Companies for six years running, the company continues to grow and add new contracts every year, employing more than 1,000 San Diegans. The latest get? A $477 million contract to provide new Blue Force Tracking equipment to the U.S. Army (which it uses to better track troop positions on screens and in vehicles) and a $53 million contract with African satellite operator RascomStar-Qaf to design and build satellite systems that will enhance telephone and Internet service for rural communities across Africa. The five-year project is part of a growing consumer opportunity for ViaSat, using satellite technology to deliver high-speed Internet access rather than the traditional cable or broadband most consumers rely on today.

“The satellite launch is first and foremost on everybody’s mind,” says Hunter. “There will be a lot of talk about that next year.”

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