Three Key Trends That Have Made Montana a Top State for Startups
For five straight years – from 2013 to 2017 – Montana has been one of the top five states for startups per capita according to the Kauffman Index of Entrepreneurship. For four years, Montana was ranked number one.
According to annual surveys by the University of Montana Bureau of Business and Economic Research, Montana’s high-tech industry is growing seven times the overall Montana economy, paying twice the median wage, and generating more than $1 billion in annual revenues.
In the last few years, media outlets like CBS national news, the New York Times, Fast Company, and the Associated Press have featured Montana as a hidden hotbed of tech entrepreneurship.
So what’s special about Montana? Three key trends – technological, social, and economic – are transforming Montana into a booming tech center.
1. Technology has removed geographic barriers to doing business.
The rise of the Internet, cloud computing, and broadband have made it affordable and accessible to build a global company in a small town.
Technology has also changed the way work gets done. Gallup’s 2017 State of the American Workplace report found that today more people do their job virtually or remotely and at times of the day other than 8 to 5. And “teams have fewer face-to-face interactions, communicating increasingly through email, instant messaging and conference calls.”
When location is removed as a business constraint, states like Montana become attractive destinations for new ventures, additional offices, and remote workers.
Tom Stergios is Senior Vice President, Strategy & Corporate Development for Advanced Technology Group (ATG) based in Overland Park, Kansas. After starting with the company in 2007, Stergios convinced ATG to let him work remotely from his basement in his hometown of Missoula, Montana.
In 2011, Stergios saw an opportunity to tap talent from the University of Montana and establish a local office. Today ATG’s Missoula Solutions Center has more than 100 employees, is the firm’s largest office, and serves clients around the globe. Stergios sees further growth ahead.
“The good news is- I firmly believe this is just the tip of the iceberg for Montana based businesses,” Stergios said. “We are bringing on 17 new resources [in January 2018] alone and the talent pool has never been better. The U of M is cranking out exceptional talent, and there is tremendous untapped potential for underemployed Montanans. We are also seeing strong interest in mid-level and senior talent wanting to come back to Montana now that world-class companies are beginning to thrive.”
ATG is not alone. Established tech companies like SoFi (Helena), Applied Materials (Kalispell), Workiva (Bozeman and Missoula), FICO (Bozeman), GE Aviation/Montana Precision Products (Butte), and ClassPass (Missoula) have also planted operations in Montana to take advantage of a loyal, engaged, and talented workforce.
2. Employees and entrepreneurs want a different lifestyle.
Gallup research has revealed “work-life balance and better personal well-being are increasingly important to employees, especially millennials and Gen Xers.”
Economist Richard Florida has found creative class professionals are drawn not just to urban centers, but also to small college towns and places with natural amenities like rivers, forests, and national parks.
This means Rocky Mountain tech hubs like Bozeman and Missoula, Montana are magnets for retaining talent. Many entrepreneurs are motivated to start companies in Montana to create jobs for themselves and others that allow them to live in the state.
Far from mere ski bums wishing to escape the rat race, many individuals lured by the Montana mystique are exceptionally talented and aim to build global companies.
Tim Sheehy is a Minnesota-native who fell in love with the mountain west on childhood road trips. Later in life when he became a Navy SEAL officer and Army Ranger, Sheehy visited Montana for military training and vowed to return when he retired from the service.
In 2013, Sheehy moved his family to Bozeman and launched aviation and technology companies Ascent Vision and Bridger Aerospace to take advantage of both the quality of life and the engineering talent out of Montana State University. In the first year, the companies grew from two people to 50 and multi-millions of dollars in sales.
In late 2017, Ascent Vision moved into a new 30,000 sq. ft. facility to meet high demand for sensors in unmanned aerial vehicles, maritime surveillance and self-driving cars.
“We’ve gone from two guys and that old airplane in a barn to a company of over sixty people with clients on six continents,” Sheehy said at the grand opening of his new headquarters in November 2017. This building represents not just what this company has done, but what’s happening in the Gallatin Valley and the rest of the State of Montana. It’s really exciting to be a part of the tech wave that’s happening here.”
3. Montana tech companies have been wildly successful.
In 2012, RightNow Technologies sold to Oracle for $1.8 billion. The company employed 1,100 people, 500 in Bozeman. The average wage was $86,000. Bozeman still hosts a major cloud operations center for Oracle.
In the wake of that success, we have seen a tech boom in Montana. As the entrepreneurial ecosystem grows, tech investors are finding value in Montana’s startups.
Former Right Now employees have started more than 16 new companies in the 2010s – not only in related sectors such as the Internet, IT service software, and network security, but also in other sectors like marketing consulting, consumer electronics, and package delivery. While some firms have folded, others now employ dozens to a hundred employees and have attracted private equity investment.
Quiq, formerly Centricient, was founded by Mike Myer, the former CTO of RightNow Technologies. Quiq closed a $6.5 million round in 2016 led by Venrock (venture capital arm of the Rockefeller family) and followed by Bozeman’s Next Frontier Capital.
Quiq is re-imagining customer service for a mobile world, using text messaging to connect customers and enterprises. Quiq also formed a partnership in 2016 with Helix Business Solutions, an Oracle Service Cloud solutions integrator with leadership tied to RightNow Technologies.
Bozeman’s Next Frontier Capital in Bozeman has made more than ten investments in Montana high-tech companies since raising its first $21 million fund in 2015, including firms like including SiteOne Therapeutics, Submittable, Clearas Water Recovery, Orbital Shift, IronCore Labs, and Blackmore Sensors in addition to Quiq.
These local investments are generating additional investments from out-of-state firms like True Ventures and Amgen.
Next Frontier Capital announced the closing of a second $22 million fund in October 2017, and this fund continues to grow. Other Montana-based groups like Frontier Angels and Good Works Ventures have also invested millions of dollars in Montana companies and have plans to expand their funding efforts for startups across the state.
These technological, social, and economic trends point to business growth in Montana that will continue in 2018 and beyond.
If you are interested in exploring opportunities in Montana, contact the Montana High Tech Business Alliance and we will help you set up your office, hire workers, and get connected with the local tech scene. We want to make it as easy as possible for you to move to Montana.
A few months from now, you too could be running your company from a mountain in Montana.
Fast Facts about Montana
- Wages in Montana are the fourth-fastest growing in the country.
- Cost of living typically hovers around or slightly above the national average.
- Montana has one of the lowest population densities in the country, with an average of 7 people/square mile.
- There are 53 licensed breweries in Montana.
- There’s an ongoing cycle of festivals and concerts.
- Public lands constitute almost 30% of Montana’s area. That includes Glacier National Park, Yellowstone National Park, and sites from Lewis and Clark’s journey.
- Billings was named Outside’s #1 Best Place to Live in the US in 2016.
- Montana was home to a number of big names, including Evel Knievel, Dana Carvey, and Jeanette Rankin. Youtuber Hank Green currently calls Missoula his home.
- Montana’s biggest industries are agriculture, travel and tourism, timber, and mining.
- Explore Montana on your own to see why it’s a great place to be.
We’ll see you in Montana.