Five Unique Advantages to Doing Business in Montana
Key facts about Montana entrepreneurship:
Missoula and Bozeman rank 9th and 12th in startup rates among 394 areas in the U.S.
The proportion of high-growth firms is particularly high in Bozeman-- higher than Denver (9thin the nation) and almost compatible with Washington D.C. (1st in the nation).
In 2017, the Kauffman Foundation funded a research study on Montana’s entrepreneurship ecosystems led by Yas Motoyama, Ph.D., of the University of Kansas. (You can find a summary here and the full report here.) The report confirmed that Missoula and Bozeman, Montana, enjoy some of the highest levels of entrepreneurship in the nation in terms of startup and high-growth companies.
The study also uncovered a Montana ecosystem that offered different and unique assets for growing businesses compared to traditional tech centers like Silicon Valley, Seattle, or Denver. Here are five benefits to doing business in Montana, according to the research:
1. Dense Networks
The high level of entrepreneurship activity in Montana is founded on dense networks of active local support organizations that are well-perceived and utilized. These networks include non-profit business resources like universities, industry alliances, government organizations, business incubators, and volunteer-led groups. The study also noted many active role-model entrepreneurs who have successfully run companies and now mentor the next generation of entrepreneurs, such as Tom Stergios of Advanced Technology Group, Andrew Hull of Elixiter, Greg Gianforte of RightNow Technologies, and Jeff Trom of Workiva. Connections in Montana’s ecosystem are built out of open relationships with small degrees of separation.
Will Price, founder, and general partner of Next Frontier Capital observed that in Montana, “It’s very easy to approach people. They’re not protected or hidden behind assistants and security guards.” Strong network connections are made in spite of Montana’s vast geography. Business leaders seek out resources, participate in events, and meet mentors and proteges beyond their hometowns, often 200-300 miles away.
2. Support of Government
In sharp contrast to cases in other larger cities where government and regulations were often mentioned as being a barrier to entrepreneurship, Montana entrepreneurs reported support from leaders like Gov. Steve Bullock, Sen. Jon Tester, and Sen. Steve Daines and considered them “champions of entrepreneurship.” This was true of Montana’s leaders regardless of the political party.
Elected officials, both at the local and statewide level, knew founders on a first-name basis and were accessible by text message or phone. State leaders paid on-site visits to companies, even those located in remote small towns. Multiple companies mentioned active support from Montana’s congressional delegation in making introductions to customers, breaking through problems with government contracts, or helping with matters related to federal policy. Paige Williams, founder, and CEO of Audience Awards in Missoula said, “The good thing about Montana being a small town is I know the governor. I know Sen. Tester. Because it’s a small town, you get major access to your leaders. And they really help support you in any way that they can and also talk about you a lot.”
3. Quality of Life
Many entrepreneurs surveyed referred to the quality of life as an important asset for business strength in Montana. While the ways in which people described the source of quality of life varied, it was principally based around the outdoor and recreational opportunities, and proximity to great national parks. Beyond outdoor assets, entrepreneurs favored attractive downtowns, short commutes, good public schools, and family-friendly communities.
Quality of life was the reason many entrepreneurs moved to Montana to start a business. Multiple firms also mentioned that Montana is an attractive destination for clients to visit for training or business meetings. Work-life balance is important to Montanans. As Molly Bradford, co-founder and CEO of GatherBoard described it, “People are outside walking their dogs, mountain biking, hiking, on the river, surfing on their lunch break. That is a celebration of balance that we don’t work to live and live to work, but both."
4. Excellent Workforce
The report found Montana entrepreneurs have been able to establish national and global reach by leveraging the high quality of the workforce in the region. Company founders and managers repeatedly commented on the excellence of Montana employees. They also noted that Montana’s high quality of life contributed to high employee retention rates – a significant competitive advantage over tech ecosystems like Silicon Valley that have high turnover.
A number of company founders expressed the common sentiment that Montana’s untamed landscape, and the type of people who are drawn to it, have shaped the state’s business culture and its inclination toward entrepreneurship. Les Craig, former U.S. Army Ranger and current Partner at Next Frontier Capital, captured the ethic well, “When a tractor breaks in Montana, you don’t pay someone to come fix it, you fix it. There’s this do-it-yourself attitude out here that is so prevalent. It takes a little bit heartier type of person to live here.”
5. Growth through Bootstrapping
Related to this do-it-yourself attitude, Montana entrepreneurs hold bootstrapping in high regard. Founders interviewed said growing their company in the early days with little to no outside capital has allowed them to build a more sustainable enterprise, embrace long-term thinking, and maintain more control in eventual negotiations with investors. Montana entrepreneurs often bootstrap their way to profitability before seeking equity investment.
They also frequently have goals beyond a quick exit, such as creating jobs for their friends and neighbors or transforming their industry. One Bozeman entrepreneur quoted in the study said, “We’ve always been, I don’t want to say anti-VC. That’s not correct. It’s just a lot of times outside funding, the interests aren’t aligned. I never wanted our company to be beholden to short-term financial decisions and have shareholders demanding a return on something that was so blatantly harmful in the long term to our company. And as a result, we didn’t take a dollar for two years.”
Montana’s biggest high-tech success story, RightNow Technologies, was built on an ethic of bootstrapping. Its founder, Greg Gianforte, wrote a book on the subject – Bootstrapping Your Business: Start and Grow a Successful Company with Almost No Money. Montana-based entrepreneurs may request a free copy at https://bozeman.com/bootstrapping/
The Montana Way
The lead author of the entrepreneurship ecosystems study, Yas Motoyama, Ph.D., concluded the report by encouraging Montanans to continue building a Montana-unique ecosystem for Montana companies, rather than trying to imitate Silicon Valley, writing, “It becomes apparent that entrepreneurs in Montana benefit from having locally based assets reflected upon the local culture. Montana should set its own goals and its own ways to achieve them.” Montana’s best strategy for competing globally is to leverage the state’s unique competitive advantages. Don’t try to be like Silicon Valley, or Boston, or New York. Be Montana.
About the publisher: Launched in 2014, the Montana High Tech Business Alliance is a statewide membership organization made up of more than 340 high tech and manufacturing firms and affiliates.
