09.22.15

Bozeman Daily Chronicle: Tech Industry Ready to Boom

For two days in September, Montana State University’s Strand Union Building ballroom was the richest room in the state.

The local business world’s elite — including RightNow Technologies founder Greg Gianforte, senior Oracle executive Laef Olson and former Intel board chairman Craig Barrett — shared miniature cupcakes with officials ranging from San Francisco British Consul General Priya Guha to FCC Commissioner Ajit Pai and NASA Deputy Administrator Dava Newman.

The gathering of more than 500 people represented the first biannual Montana high tech jobs summit — aimed at discussing the state of the region’s high tech sector and encouraging expansion through job recruitment.

“This is a very unique opportunity to bring together the nation’s tech leaders and explore ways to create more good paying Montana jobs, that’s the bottom line,” said Montana Sen. Steve Daines, who spoke at the summit.

Daines, an MSU graduate, told his story of leaving the state for lack of job opportunities after graduating from the university with an engineering degree.

Tech pioneer Gianforte has also stressed the need to capitalize on the burgeoning industry. Over the summer he distributed 18,000 pamphlets urging Montana college alumni to return to the state. “Given you have a choice, why not live and work in the Last Best Place? Come back to Montana (and bring your job with you),” he wrote.

September’s summit came on the heels of a new report from the University of Montana’s Bureau of Business and Economic Research that showed the “growth in high tech businesses is outpacing that of other sectors of the state’s economy.”

Not only is the state adding high tech jobs at a faster rate than other sectors, these jobs are generally higher-paying, according to the report. Data gathered from the Montana High Tech Business Alliance (whose executive director, Christina Henderson, was among the report’s authors) showed that the approximately 200 members of the alliance were responsible for $632 million in gross sales in 2014. These same members expected to add more than 400 new jobs this year, according to the bureau’s findings.

These jobs also earn more than the average profession. The average annual wage for alliance members is $50,702 — compared to $39,880 for all other occupations. The overwhelming majority of these jobs come in the form of software and cloud-based computing businesses like Workiva, Helix Business Solutions, or RightNow, which was sold to Oracle in 2011 for $1.5 billion.

While Gianforte’s former business grabs many of the headlines — described as a “cash bomb” and the “lightning strike that started life from the primordial soup” — it was not the first large tech company in Bozeman.

In 1990, after writing the initial program in his basement, Chris Nelson formed Zoot Enterprises, an operation that partners with banks, parsing credit file data to help lenders determine whether or not to approve loans.

Now in its 25th year, the company employs 260 people and has built data centers in Sydney, Amsterdam and Frankfurt, and Nelson reflected that a lot has changed in the state since its early days. Until “A River Runs Through It” came out in 1992, many outsiders thought Montana was a province in Canada, he said.

“It’s hard to recruit people when there’s only one company in town because they’re afraid if they lose their job they’ll have nowhere to go,” he added.

And despite the increased number of options, attracting talent is still an issue. According to a BBER survey, “hiring skilled workers” was the most acknowledged impediment to business growth among MHTBA members, ranking above “access to capital.”

“Having a lot of good choices for talent to come here is really important,” said Nelson.

For Pulsara, a startup that has developed an app that streamlines heart attack and stroke care, Bozeman has been an ideal location to call home. The company initially scouted Dallas, Austin and Atlanta, but after visiting Bozeman and recruiting an entire business team, its owners decided to put down roots in the West.

“This is like a tech founder’s dream,” said CEO James Woodson. “When it comes to getting resources, (Bozeman) has been a fantastic environment start to finish. It was a no-brainer to set up here.”

As with many other regional tech companies, Pulsara’s roster of 29 employees is filled with PhDs and Ivy Leaguers who were enticed by the appeal of the Big Sky state. “Quality of life” was rated as the greatest advantage Montana offers tech businesses, according to the BBER survey.

“It’s a nice work and life balance,” said Woodson.

Many workers are eager to migrate from the cramped, expensive existing tech meccas like San Francisco, added Nelson. And though Bozeman may not have the same sway as Silicon Valley or Seattle, the area is quickly gaining a national reputation. Montana was ranked the top state in the U.S. for startup activity for the second year running by nonprofit the Kauffman Foundation.

“You don’t think about the Gallatin Valley as being the hub of technology but as the world is changing, as technology is removing geography as a constraint, you have places where the quality of life is exceptional and (you) can grow world class high tech companies there,” Daines told the U.S. Senate in a recent speech.

With organizations including MSU’s Blackstone LaunchPad, the Bozeman Technology Incubator and the MHTBA acting as financially supportive parents, local startups are popping up left and right. With names like Beartooth, Polo, ItemBounty, ShareLift, Thinkdeep.ly and RanchLogs, the companies run the gamut from intricate data analysis to crowdsourced delivery. And many are finding success in the area’s blossoming tech environment.

IgniteFeedback, a market research startup and brainchild of former RightNow employee Ben Werner, recently received more than $300,000 in funding to expand its fledgling business.

“There are some really interesting ingredients in Bozeman,” said Werner, who emphasized that the Gallatin Valley compares favorably with other tech-heavy cities like Seattle. “The sense of community is much stronger in Bozeman and it’s a place where because we’re more down to earth, real and genuine, our success rate per startup is going to be much higher.”

“The work ethic of the people that live here is incomparable. People want to work, to do meaningful things, and to be a part of that is a privilege,” added Nelson.

Many tech executives downplayed the potential ramifications of the incoming growth, assuaging fears that a tech boom would create a Bay Area-like housing crisis — where the median cost for a single room has climbed to more than $3,500 per month. The situations and cities are like comparing apples and oranges, said Erich Hannan, Pulsara’s vice president of product development.

“We still have a ways to go as a community,” he said.

“We’re just getting started. We need a couple of our startups to hit it big like RightNow did, and then it’s really going to take off,” added Werner. “It’s a flywheel type thing. It’s heavy, but once it gets moving it goes faster and faster. There are good things coming for Bozeman.”


By:  Lewis Kendall
Source: Business Journal