Diverse Community of Startups at Missoula’s MonTEC Sparks Creativity, Collaboration, and Innovation
“It’s not just about a building, or a facility, or a program. It’s about the people. That’s what I’m most proud of is that the people here are doing great things.” - Joe Fanguy, President of MonTEC and Director of Technology Transfer at the University of Montana
Hallway conversations and “accidental meetings” happen frequently at the Montana Technology Enterprise Center (MonTEC) in Missoula, and that is one of the best parts of being located at the business and technology incubator across from the University of Montana on the Clark Fork River, according to Elke Govertsen, founder and publisher of Mamalode. Bumping into her colleagues at MonTEC -- who are making impacts in renewable chemistry, oil and gas analytical services, big data/e-discovery, pharmaceuticals, health care data analytics, publishing, and online video delivery – always inspires Govertsen. Interacting with a diverse mix of entrepreneurs from completely different industries than her own often gives her new ideas and creates cross-collaboration, she said.
Since moving into MonTEC two years ago, Mamalode has grown dramatically, she said. “We were a lifestyle business, and moving into MonTEC really allowed us to start focusing on being a high-growth business and scaling it nationally. We went from being a local publication to a national multiplatform media company.” While it seems that people from such different industries wouldn’t have that much in common, it is quite the contrary. With 10 startup companies that have nearly 100 employees – and 10 affiliate members, MonTEC is a community of like-minded people, according to Joe Fanguy, president of MonTEC and director of Technology Transfer at the University of Montana. There is a diverse mix of companies, but they are all startups working to build their businesses, he said.
University Steps in to Save MonTEC from Closure, Incubator is Now Looking at Expansion Two years ago, MonTEC was a different place, according to Govertsen. It was kind of quiet and had some empty offices and now “it’s full and there are people everywhere – communities are thriving,” she said. It is so full, in fact, that Fanguy carries his laptop with him, finding workplaces on bistro tables, lounge chairs, and other spaces in the East Broadway building. He used to have an office but cleared out for one of the incoming tenants– the Montana High Tech Business Alliance.
Fanguy sees many opportunities for growth at MonTEC, and he is pretty sure that expansion will be a topic of conversation in 2016. There is a lot of growth in the life sciences and chemistry space as well as the IT and software space, he said. At some point, the conversation may be focused on these groups co-locating, but for now it’s less about building and more about creating synergies between people, he said. MonTEC was formed in 2001 through a cooperative agreement between the University of Montana and the former Missoula Area Economic Development Corporation (MAEDC) to nurture research and scientific discoveries into commercial enterprises. When MAEDC dissolved in 2011, MonTEC’s future was a little uncertain. With the possibility that MonTEC would be forced to close its doors, the University of Montana and Fanguy stepped in to save the incubator.
A $3.5 million renovation and expansion – made possible with a $1.75 million grant from the U.S. Economic Development Administration and a matching amount from the University of Montana – was the university’s first step. The project updated 15,000 square feet of labs and office space to expand Rivertop Renewables, a renewable-chemical company resulting from the work of UM Professor Emeritus Don Kiely. Rivertop invested an additional $2.5 million in private capital to fully equip the facility. Fanguy became president of MonTEC in 2012 and began exploring new opportunities.
Director’s People-first Mentality Spurs Growth To help turnaround the struggling business incubator, Fanguy concentrated on diversifying opportunities at MonTEC and becoming a little more open-minded about who MonTEC’s clientele were. Historically, the focus was on businesses that had roots in the university, but Fanguy realized that university-based businesses weren’t the only ones that needed access to technology. The decision to bring in creative businesses like Mamalode and the Audience Awards to mingle with the more research/hard science-oriented ones has created positive energy at the incubator, he said. Read more about the Audience Awards on MTHighTech.org. “Joe has done a good job of getting the right businesses together,” Govertsen said. “He is a really open leader and a good listener. He’s open to ideas and suggestions and has done a good job of navigating with all of the clients and with what the university needs. He’s been able to make good changes.”
Second, he started a program where businesses could come in as affiliate members. They could “meet a client or investor at the front door, walk them back to the executive conference room, give them the dog and pony show, and close the deal,” Fanguy said. They could have a key to the door, but didn’t have to actually be located there. Fanguy also worked to build a sense of community among the people at MonTEC. “It’s not just about a building, or a facility, or a program,” he said. “It’s about the people. That’s what I’m most proud of is that the people here are doing great things.”
With 32,000 square feet of space, MonTEC offers entrepreneurs a mix of work areas, offices, conference areas, and microbiological and chemical laboratories. “We pride ourselves on a good mix of meeting and open spaces,” said Fanguy. “We don’t want businesses to feel isolated, and we don’t want them to have to schedule a meeting down the street.” A partnership with Blackfoot Telecommunications Group allows MonTEC to offer business “virtually free, super high-speed 1 GB Internet,” which is critical for many of the center’s data-intensive businesses. IT infrastructure is very costly and is difficult for many startups to afford. Some of businesses in MonTEC might not have been able to get started without the high-speed Internet, Fanguy said. MonTEC also provides networking, mentoring, and funding opportunities, as well as help with commercialization.
Startups in MonTEC also have mentorship opportunities available through a variety of resources. The Blackstone LaunchPad at the University of Montana, for example, helps students, faculty, and alumni turn their ideas into real-world businesses and nonprofit organizations through individualized coaching and support. The Bitterroot Economic Development District (BREDD), located in MonTEC, helps businesses with grant writing and administration; regional planning; project coordination; and, market intelligence. An exciting new opportunity entrepreneurs have through MonTEC is a chance to pitch their business on a quarterly basis to investors at Next Frontier Capital, a Bozeman-based venture capital firm that announced the initial closing of its inaugural $20 million fund and intends to invest in “Montana technology companies of impact, utility, and value.” Read more about Next Frontier Capital on MTHighTech.org.
MonTEC also has a seed fund with a cap of $5,000, and entrepreneurs can apply for those funds to use to go to trade shows or hire interns, Fanguy said. In partnership with the University of Montana, attorneys and business specialists can provide resources to support a venture’s commercialization and intellectual property needs. Under Fanguy’s leadership, MonTEC companies have collectively secured more than $30 million in private investment in the past three to four years.
MonTEC Provides Positive Environment and Benefits for Startups
Rivertop Renewables has always been MonTEC’s anchor company and a big success story, according to Fanguy. The company grew from idea phase to launching their first commercial plant in Virginia late last year. There are some other companies in MonTEC that are showing real promise, Fanguy said. Last summer after being an affiliate member at MonTEC for a year, Joel Henry, a University of Montana computer science professor and adjunct law professor moved his company, Agile Data Solutions, into the building. Henry co-founded the company in 2013 to help paralegals and lawyers sift through mountains of legal data.
Agile Data Solutions has three full-time employees and three contractors, and clients include law firms and bar associations all over the U.S., the oil and gas industry, and the FBI, to name a few. Through a recent trade mission to Canada with the Montana World Trade Center, Henry cultivated some new relationships and is working with the Alberta Energy Regulators in Canada to use Agile Data Solutions’ software to sort through hundreds of thousands documents, Henry said. As Henry was building his business, one of the biggest benefits was having a place to hold client meetings. “Being affiliated with MonTEC gave clients assurance that we weren’t just writing software in our basements,” he said with a laugh. Like Mamalode’s Govertsen, Henry enjoys “having a place where I can walk down the hall and talk to other startups. Mixing, talking, and sharing with different teams in MonTEC is invaluable he said. “It’s a really neat environment.”
For DataSmart Solutions, a company that does cutting edge work in health care data analytics, being located in MonTEC, has many benefits, according to Bernard Khomenko, vice president of the company. Having a great tech-support platform with phones, high-speed Internet, and video conferencing is really important to tech startups, but is sometimes not affordable. MonTEC provides these services at a reasonable cost. The meeting space is also very useful for DataSmart Solutions that has offices in Missoula, Helena, and Cedar City, Utah. Once a week, the Helena office comes to Missoula to meet, Khomenko said. When they’re all together, there are 20-plus people, and the conference room has plenty of space. In addition, MonTEC provides a great environment to “cultivate interaction with like-minded people,” Bernard said. “There are lots of independent, free-thinkers who are all trying to build something much bigger than what we currently are.”
Top photo caption: A few years ago, MonTEC was struggling to survive and nearly had to close its doors until the University of Montana stepped in to save the incubator. Under the direction of Joe Fanguy, president of MonTEC and director of Technology Transfer at UM, MonTEC companies have collectively secured more than $30 million in private investment in the past three to four years. Fanguy has concentrated on diversifying the incubator’s opportunities, recruiting a variety of businesses like Mamalode, Agile Data Solutions, and DataSmart Solutions, which are featured in this article. He has worked to build a sense of community and has formed strong partnerships with organizations on and off campus. With all of the offices full, MonTEC is brimming over, and it's likely expansion will be a topic of conversation in 2016. In the photo, Tyler Smith, vice president of Research and Development at Rivertop Renewables, gives UM President Royce Engstrom (left) and former Sen. Max Baucus a tour of Rivertop during the grand reopening.