There’s a familiar pattern in the growth of a region’s technology economy. The tech part comes first, often from colleges and universities or emerging from established companies with large R&D budgets. Those innovations lead to new companies, and those companies … well, those companies usually leave.
It’s true. New companies need two things: funding and experienced management. The biggest venture-capital funds are in places such as the Silicon Valley, Boston and Austin, Texas, and those not so coincidentally also happen to be home to more experienced tech executives than just about anywhere else in the world. Because it is often easier to take a new company to a CEO than it is to persuade the CEO to relocate — and because investors love to keep a close eye on their investments — new companies that form in emerging tech markets often move to those established hot spots.
Idaho is a textbook example. With organizations such as the Idaho National Laboratory, Boise State University, the University of Idaho, Idaho State University, BYU Idaho, HP, Micron and Simplot, innovation has not been an issue. We have seen tremendous growth in the tech sector across the state over the past 10 years. But all too often, our tech entrepreneurs have had to search outside the region for capital.
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Boise today is where Salt Lake City was 15 years ago. That’s a good thing, because all of the tech activity in and around Salt Lake eventually attracted venture-capital firms (like my own, Sorenson Capital, in Lehi), and Salt Lake became a regional VC hub. Idaho is reaching that same critical mass, and investors are spending more and more time in the state. We made our first major investment in an Idaho company, Cradlepoint Solutions, last year, and our goal is to invest in at least one per year going forward.
All of that activity helps to bridge that executive talent gap. One of the challenges in attracting established tech executives is convincing them that there are alternatives in the community if a position turns out to be less than a perfect fit. That’s becoming less of an issue in Idaho as the number of successful homegrown tech companies continues to rise.
Of course, Idaho has been ahead of the curve in terms of talent for some time, thanks to alumni from places such as HP, Micron and Simplot — men and women who understand the potential for tech-business development in the state.
The activity in Idaho today is astounding. Boise is at the center of everything, but INL is driving innovation in the eastern part of the state, and some of the most exciting and surprising small companies are in the north around Coeur d’Alene.
The next step — and it’s starting already — is to work together across the state to better leverage all of these assets. When that happens, there will be no limits to what we can accomplish.
Jerry Henley is a consultant for Sorenson Capital, 801-407-8434, and CEO of Rubicon Capital Source. This column appears in the Aug. 17-Sept. 20, 2016, edition of the Idaho Statesman’s Business Insider magazine. Click here for the e-edition (subscription required).