By Kevin Roderick

It has rolling hills, lush vineyards and a historic mission – and it's only 10 miles from the Pacific Ocean. But San Luis Obispo has something else: A thriving Internet community. Come here for work and play.

Working in his garage office in Prescott, Ariz., Ted King peered out the window at a local peak to come up with the name of his new company – Wireless Mountain Laboratories. After gazing some more he had a second inspiration: There must be a better place to launch a business and enjoy life than in the remote forest of central Arizona.

King searched for four months before discovering his geographic nirvana amid the pinot noir vineyards and rolling grasslands of California's central coast. He and three employees made the move in 1999 and now sell radio-based inventory-tracking devices from a converted nursery in the college town of San Luis Obispo, population 43,000. It is a bit isolated – 200 miles from Silicon Valley to the north and Los Angeles to the south – but that's a good thing, King says. It keeps costs down and allows for a more rounded life.

SAN LUIS OBISPO Bring the Shades San Luis Obispo averages 315 sunny days a year. Vine Country There are more than 40 wineries nearby. Location, Location, Location The town is nestled between the Pacific Ocean and the 2-million acre Los Padres National Forest. Sticky Situation The buildings along Bubble Gum Alley, just off Higuera Street, are encrusted with wads of used chewing gum. Fresh Off the Truck The weekly Higuera Street Farmer's Market is the largest on the West Coast.

Refugees and businesses from large cities are drawn to San Luis Obispo in part for its small-town California lifestyle. A creek meanders through a charming downtown of small bookstores, antique shops and cafes opening onto tree-shaded sidewalks. Old Mission San Luis Obispo de Tolosa, built by Spanish friars in 1772, forms the town's historic heart. Bike lanes trek through neighborhoods, a sign of the town's environmentalist bent, and each Thursday evening several downtown blocks are closed for a huge street fair and farmer's market, where smoky barbecues and tables of fresh produce remind you that this is still the country. Add nearby beaches, hot springs and a National Public Radio station to the mix and it's no wonder that San Luis Obispo has become a magnet for techies who like to bring their mountain bikes to the office and execs who want to get away from the pressure cooker of Silicon Valley.

"Any of these people could drive up to San Jose and get a job for more money, but it wouldn't mean much," King says. "They like it here.'' King, the founder and 20 percent owner of privately held Wireless Mountain, isn't the sort who dashes off at lunch to catch a few waves. His personal reward for living here is a country estate in the beach town of Nipomo. But the ability to mix work with a casual, healthy lifestyle is important to his 14 local employees. "I couldn't grow a big international company in Prescott, but I can here,'' King says. "You need a pool of talent to draw on.''

Much of that talent comes from California Polytechnic University at San Luis Obispo. Part of the state university system, Cal Poly ranked ninth – just behind West Point, the U.S. Naval Academy and the U.S. Air Force Academy – in this year's U.S. News and World Report national evaluation of engineering and technology schools that award bachelor's and master's degrees.

Many graduates remain in the area or are happy to be lured back by startups or companies establishing offices here. These include software maker ALH Group, which relocated from Manhattan Beach, Calif., in 1998, and Menlo Park, Calif.-based SRI International, a nonprofit think tank that has spun off more than 30 companies. Many local firms manufacture tech products. Located in downtown San Luis Obispo, Logic Plus designs the inner electronics for games, robots and a line of interactive dolls made by Mattel (MAT) .

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