Name-dropping is a nasty habit, especially when that name is Silicon Valley.
Want to know the surest way to annoy a local techie? Dare to compare the Front Range to a certain money-soaked, IT-focused region an hour south of San Francisco. “Silicon Valley is Silicon Valley,” says Paul Berberian, the CEO of Sphero, a robotics company in Boulder. “It’s a totally different environment out there.” (That’s a diplomatic reaction. During a recent panel assembled by the state to discuss startup communities, the moderator threatened to defecate on the audience’s lawns if they used the S-word to describe Colorado. He was kidding…we think.)
More from our April 2017 Issue
Nevertheless, just about everyone—from the Denver Business Journal to the New York Times—has channeled Silicon Valley when talking about the eruption of tech startups in the Mile High City and the Boulder bubble. Berberian is correct, though: We’re not Silicon Valley. Not even close. Last year, Silicon Valley startups brought in $24.9 billion of venture capital funding, according to PricewaterhouseCoopers. Colorado (that’s as specific as the report gets) raised $670 million. And while scale is important, there are other, more nuanced factors to consider: Silicon Valley-ites take a masochistic pride in near-gladiatorial competition and killer office hours. Front Range techies, meanwhile, value openness and often play hooky on powder days. In other words, Denver and Boulder are building a vibrant, strong, and growing technology community—just not in any other place’s image.
But if the Denver-Boulder tech corridor isn’t the next Silicon Valley, what is it, exactly? Turns out we’re not the first to ask that question. In his 2012 book, Startup Communities: Building an Entrepreneurial Ecosystem in Your City, Brad Feld proffered what he calls the Boulder Thesis. The co-founder of Boulder venture capital firm Foundry Group, Feld writes that every successful startup society—yes, even Silicon Valley—requires four pillars to thrive: entrepreneurship, long-term commitment, inclusivity, and engagement. So to better understand the Denver-Boulder innovation sector, we examined our tech industry through the lens of Feld’s four tenets.
What we discovered is a community full of ambitious leaders who value cooperation—and who also have some work to do when it comes to diversity and extended investment in our startup scene. And although it’s unlikely the Front Range will ever equal Silicon Valley’s size and success, startups are vying to become Colorado’s first “unicorn” (a private company valued at more than $1 billion); offshoot communities are sprouting in Fort Collins, Colorado Springs, and even Durango; and in 2016, Centennial State startups raked in more funding than ever. In short, the Denver-Boulder tech community isn’t the “next” anything—it’s already arrived with a personality all its own.
Without risk-tolerant, big-idea-generating founders, there’d be no startups. And with no startups, there’d be no innovation, no venture capitalists, and no “feeders,” as Feld calls the multitude of businesses and entities supported by the startup community.
Whether because of personal pivots or professional ones, these four local entrepreneurs wouldn’t be in business right now if they hadn’t been open to colossal changes of direction.
- Scott McNealy
Origins: The co-founder of a little Silicon Valley company called Sun Microsystems, McNealy launched image-collecting website Wayin here because of California’s “anti-biz” climate, he says. Translation? Taxes are crazy high there.
Pivot: Wayin, intended to be a Pinterest-like destination online, couldn’t compete with Pinterest. So McNealy, originally the startup’s chairman, stepped in as CEO in 2015. Because Wayin had raised roughly $30 million by that point, McNealy was able to recast the existing technology. Now, instead of connecting social media users, Wayin rounds up social media posts for corporate clients who then use the images in marketing campaigns. For instance, the Denver Broncos employ Wayin to gather fan-generated content—like, hypothetically, a tweet of an adorable toddler in a Von Miller jersey—the team can post to its Jumbotron during games.
Prognosis: Investors approve of the new direction. Wayin raised $15 million after its reset, and at least some of those dollars went toward the 2016 acquisition of a rival named EngageSciences. The combined company now serves more than 300 brands in 80 countries.
- Bryan Leach
Origins: Leach decided to become a lawyer after watching A Few Good Men. It took Yale Law School, a clerkship for Supreme Court Justice David Souter, and a partnership at a prestigious firm before Leach could handle the truth: He didn’t like lawyering. Rather, Leach wanted to build a company—just like his father, who turned a computer shop in Atlanta into a public company with 1,400 employees.
Pivot: When Leach saw someone download info from a business card directly onto his smartphone, he thought, Wouldn’t it be cool if you could do that with a receipt? Leach raised $3 million from 51 investors (including the attorney who took Apple public) to launch Ibotta. Users download the free app, peruse discounts from brands such as Tropicana, and unlock the rebates by, say, taking a survey about how much juice they drink. After buying the item, shoppers snap photos of their receipts, and Ibotta’s app automatically deposits their savings—in the form of cash—into the company’s customers’ online accounts.
Prognosis: During the past year, Ibotta—which makes money by charging brands and retailers to advertise on the app—has more than doubled its workforce to 365 staffers. The app ranks as Apple’s 43rd most frequently used.
- Colleen Birdnow Brown
- Marca Global
- Greenwood Village
Origins: Birdnow Brown ran 9News in the 1980s but left when her boss told her a woman would never lead the parent organization. Birdnow Brown became president and CEO of Fisher Communications, the owner of 16 TV stations in the West, and chairperson of American Apparel during its bankruptcy in 2014. At American Apparel, Birdnow Brown became the target of online attacks after she fired the company’s CEO, Dov Charney.
Pivot: Frustrated by the digital insults, Birdnow Brown acquired internetreputation.com—an online tool that helps manage personal and corporate online personas—in 2015 in a move that wasn’t just (good) business; it was personal.
Prognosis: Since buying internetreputation.com, Birdnow Brown has launched two new brands, Blitz Monitoring and MassivePeak, under the umbrella of Marca Global. Along with internetreputation.com, the entities help 2,000 clients a month guard against online attacks.
- Ian Bernstein and Adam Wilson
Origins: Bernstein (right), a Colorado State University alum, believed iPhones should be used for more than texting. Using Bluetooth technology, he surmised, smartphones could easily control machines. Bernstein partnered with Wilson, a software expert, and applied for the Techstars accelerator in Boulder.
Pivot: Bernstein and Wilson tried controlling cars and garage doors from their phones. But under Techstars mentor Paul Berberian, they decided the rise of the machines would be more fun—and more profitable—if they focused on entertainment. They built a toy robotic ball and asked Berberian to be CEO.
Prognosis: That three-inch ball became the toy version of BB-8, the adorable droid in 2015’s Star Wars: The Force Awakens. Apparently, having the Force with you is good for business, seeing as Sphero has sold more than $250 million worth of products. The next installment of Star Wars comes out in 2017, so Sphero should notch banner sales numbers this year.
Leaders must devote at least 20 years to a community—a startup movement needs that much time to take root and propagate.
Your awesome house of the future…owes a debt of gratitude to years of investment at a research lab in Golden.
Colorado tech entrepreneurs might have some commitment issues (see “Leaders Wanted,” page 81), but that doesn’t mean the Front Range lacks a lasting devotion to innovation. During its four decades of existence, the National Renewable Energy Laboratory in Golden has—among many other achievements—helped reduce the cost of producing solar energy by 99 percent. But now NREL faces a threat: new Department of Energy Secretary Rick Perry. While running for president in 2012, the former Texas governor, who denies the science behind man-made climate change, promised to abolish the DOE, which funds NREL. (To be fair, Perry did advocate for wind power while leading Texas.) Should he cut the DOE’s investments in sustainable energy, NREL will suffer—which is too bad, considering all the cool things NREL researchers are dreaming up in their labs. Here are four technologies currently under development in Golden that might be powering your house within the next decade…if the Trump administration doesn’t slash NREL’s budget. —Allyson Reedy
The National Renewable Energy Laboratory
- 2015 Fiscal Budget:
- $357 million (77 percent increase since 2005)
- 1,719 (almost all in the Centennial State)
Windows of Opportunity
Energy-capturing solar technology called SwitchGlaze can be embedded in the windows of your house. When it’s sunny, SwitchGlaze appears—a tint that’s a little like the Transitions eyeglass lenses your dad wears. But in addition to providing shade, the windows capture and convert solar energy to help power your home.
Connecting the Bots
Foresee—software developed at NREL in conjunction with Colorado State University and electronics company Bosch—will be integrated into your smart household appliances to monitor, control, and analyze power consumption. Right now, you press “start” on your dishwasher, and it begins cleaning your Tupperware. Foresee, however, will talk to the power grid, which might be super busy at that moment. The dishwasher will wait patiently to kick on until electricity is cheaper and more efficient as a result of lower demand.
Nissan is working with NREL to develop a battery that will allow your car to help power your house. First, you need a charging station at your office to plug your electric ride into during the workday. Nissan’s special battery then stores that electricity for future use. At home, the battery won’t be powerful enough to run your entire dwelling, but it can act as a backup to get you through blackouts or other emergency situations.
Pokémon Go will save the world. Well, not Pokémon Go, per se—but the same kind of virtual technology will make shopping for environmentally friendly foods as easy as point and…well, that’s it. Scan products using your phone while cruising the grocery aisle, and an app from NREL relates how carbon-friendly each option is. Using an augmented reality library that helps computers recognize real-life images, the app actually identifies packaging. If you’re farther than two feet away from the item, the app provides a grade, ranging from “A” through “F.” Move closer to capture detailed information, such as the number of miles those Seventh Generation paper towels were trucked to reach your King Soopers.
Leaders Wanted: Q & A With Seth Levine
Boulder venture capital firm the Foundry Group has stuck its tentacles deep into the local tech scene (in a good way). That’s why we asked Foundry managing director Seth Levine to talk about the future of the Front Range startup community.
5280: Foundry Group has played a huge part in the emergence of the local tech scene. What’s Foundry’s role going to be in the future?
Seth Levine: We’re not generational at Foundry. We’ve agreed to that. Eventually Foundry will go away. New leaders will step up, like Chris Marks. [Marks is the managing partner at Blue Note Ventures, an investment firm whose portfolio includes mostly local startups.]
Does the local tech community have a weakness?
There is a bit of a perception that companies get to a certain stage and they get bought. Boulder’s SketchUp [a 17-year-old 3-D modeling software company] was acquired by Google in 2006. Gnip [a nine-year-old Boulder startup that measures consumer sentiment for companies by analyzing tweets] sold to Twitter in 2014. Companies like LogRhythm, SendGrid, and Galvanize are now starting to break that mold.
So in 20 years, those three will be the Front Range’s Apple, Facebook, and Google?
Maybe. But it’s just as likely to be a company that doesn’t exist yet. Look at Facebook: 20 years ago, Facebook didn’t exist. In 20 years, there will be a bunch of new leaders because of the constant turnover in startup communities. But Denver and Boulder’s selfless culture? I don’t think that will change.
A startup community must (proactively) welcome all comers.
Building A Bigger Tent
The tech industry as a whole has long struggled with diversity. The Front Range’s IT sector isn’t much different.
If the recent past is any indicator, Silicon Valley seems about as inclusive as the Illuminati (which Apple CEO Tim Cook probably controls anyway). Since July 2015, the U.S. government has filed discrimination lawsuits against Google, a software company called Palantir Technologies, and Oracle. The charges, respectively: ageism, racism, and paying white men more than people of color and women.
It’s no wonder, then, that Jacqueline Ros was concerned the tech scene wouldn’t welcome her. “You hear stories about all the barriers to entry for women,” says 26-year-old Ros, co-founder and CEO of Denver’s Revolar. Fortunately, the Denver-Boulder startup scene seems to be more accommodating than its California counterpart—or, at least, it has been for Ros.
Ros’ company rose out of tragic circumstances. When Ros was in college, her teenage sister was sexually assaulted twice. That inspired Ros to imagine a personal safety device that would send a distress signal and GPS data to friends and family if the user pushed its button. Ros, however, had no idea how to get such a product to market, so she leaned on two female mentors: Andrea Perdomo, COO at online marketplace Live Worldly in Denver, and Jane Miller, who serves on the boards of Justin’s Nut Butter and Eldorado Springs Artesian Water.
The former invited Ros to local startup networking events such as Women Who Startup and became her business partner in 2014 when they co-founded Revolar. The latter, whom Ros met at one of those startup get-togethers, introduced Ros to a partner at the venture capital firm Foundry Group (see “Leaders Wanted,” page 81), which invested $3 million in Revolar. In April 2016, the company began retailing the $59 wearable and currently employs 24 people at an office in Capitol Hill. “I found it incredible how much people embraced networking and genuinely wanted to help me,” Ros says. Boulder and Denver rank among the nation’s top 20 cities for female entrepreneurship, according to a 2015 analysis from Crunchbase, a tech-focused website that tracks startups.
Even so, the Front Range tech scene isn’t a multicultural utopia. In 2014, 82.5 percent of workers in the domestic high-tech industry were either white or Asian-American, according to the U.S. Equal Employment Opportunity Commission. Although there are no stats on race specific to Front Range tech companies, anecdotal evidence suggests Denver and Boulder aren’t much—if any—better. “It’s a lot of work to find top-tier startups with at least one female leader, and it’s even harder to find [ethnic] diversity,” says Hannah Davis, the program director for MergeLane (pictured), a startup accelerator in Boulder that only accepts companies that have at least one woman in a leadership role. MergeLane’s 2016 class included 10 businesses—but only one person of color.
And, unfortunately, no one seems to have figured out how to increase racial diversity in the near term. Techstars, a much-lauded Boulder-based accelerator, surveyed nearly 700 startup founders around the world, and although 81 percent of respondents said diversity enhances creativity and innovation, they weren’t sure how to bolster it. Techstars launched a microsite full of suggestions, but gender-focused posts far outnumber those specific to race. For her part, Ros is doing what she can to change the prevailing trends at Revolar, where a quarter of the workforce is Latino. “I felt that [inclusivity] when I came to Colorado,” says Ros, a Latina herself. “And I will absolutely pay it forward.” —Jayme Moye
Well-paid tech employees certainly aren’t helping with local gentrification issues. So why aren’t you mad at them?
On April 1, 2014, the “Most San Francisco Thing Ever” (according to Mother Jones magazine) occurred in the middle of a public street in the Mission District. The affair featured performers wearing colorful skintight outfits, tumbling acrobats, and one person dressed like a surveillance camera. Together, the circus blocked traffic for hours—which was the point. It was organized as a protest against the buses Google started running to shuttle its San Francisco–based employees to its Silicon Valley campuses. That day’s rally, though perhaps the weirdest, was far from the only display against the valley’s role in the gentrification of the city.
In 2016, fast-growing startup SendGrid relocated from Boulder to Denver. To accommodate workers who still live in Boulder, the email marketing company began running its own private bus, replete with streaming-capable Wi-Fi and plush leather seats. But unlike Google’s bus, SendGrid’s swanky commuter service hasn’t sparked a single protest in Boulder or Denver—even though gentrification remains one of the most intense conflicts along the Front Range. Colorado techies could make easy targets, too, what with their average annual salaries doubling the mean private-sector wage, according to a 2016 CompTIA report.
Other Silicon Valley Trends We Hope Don’t Come To Colorado
General malfeasance: The valley has suffered through a recent spate of bad behavior, such as blood-testing startup Theranos allegedly faking test results.
Survival of the techiest: Many Silicon Valley luminaries are stocking food, guns, and motorcycles in preparation for an end-of-days event, such as a worldwide pandemic.
Although most Denverites aren’t faring as well as the typical techie, they’re not faring poorly—especially compared with their San Francisco counterparts. Between 2007 and 2014, San Francisco households that earned in the 95th percentile saw their wages rise 14 percent. The city’s poorest families, however, didn’t gain a dime. The rich got richer in Denver, too (by 13 percent), but so did the less privileged (by 14 percent). And it’s easy to decipher the haves from the have-nots in San Francisco. The labor force there is largely bifurcated between wealthy techies and low-paid service workers, says University of California, Berkeley professor Malo Hutson. In the Mile High City, it’s challenging to know whom to cast your anger toward, because there’s a diverse economy with a growing number of jobs in management, health care, and professional business services.
Make no mistake: Gentrification in Denver is a time bomb, Hutson says. His solution for solving the city’s housing shortage is old-school: companies building their own housing. Ford employed that strategy in Detroit, and if the tactic sounds archaic, consider that Facebook is constructing apartments for its workers in Silicon Valley. After all, many believe SendGrid will rake in a lucrative IPO in 2017. It’s going to have to spend all that cash on something.—Haley Gray
Organizations and events, both formal and casual, must bring members of the startup ecosystem together.
Start Me Up
You can’t truly appreciate what it means to be immersed in the Denver and Boulder tech community without becoming a part of it. We did the next best thing by taking you through the steps required to create a successful startup here.
Colorado Tech That Will Make Your Life Better
- This app collects your travel data (e.g., flight info and hotel reservations) in one place, so you don’t have to toggle between multiple outlets.
- Designed for business travelers, Trip30 tells you where you need to go and when you need to leave to get to your cross-town meeting.
- Strictly for love-starved outdoor enthusiasts, LuvByrd connects singles who would rather climb Eldorado Canyon than Netflix and chill.
- When preserving date night depends on finding somebody to watch the kids, download this app. It’s like Uber, but for babysitters (relax, they’re screened).
- This app automatically splits the charges, so you don’t have to bug your deadbeat roommate for her share of the rent anymore—that’s BillGO’s job.
- Rent goods—from skis to lawn mowers—to and from your neighbors through this sharing marketplace for communities.
- Sensors scattered throughout your house connect to your smartphone to inform you when, say, a leaky hot-water heater begins flooding your basement.
- Water your lawn from your smartphone while ensuring your beloved tulips don’t get as much H20 as your thirsty yellow hibiscus.
Eat & Drink
- Never suffer another caffeine-withdrawal headache thanks to this Keurig-like coffee maker, which automatically knows when you’re running low on java and orders more.
- Let’s Be Chefs:
- This app creates your grocery list, delivers step-by-step instructions, and tells you when you should start cooking to get dinner ready on time.
- Dispatch Health:
- Not feeling great, but don’t want to miss The Bachelor’s season finale? This app calls licensed urgent care professionals to your home.
- Orderly Health:
- Locate a nearby doctor who takes your insurance or find out how much that CT scan will cost you by sending a query to the Orderly Health app.
- PayPal’s stoner cousin, this digital banking app allows cash-averse customers to convert U.S. currency into “tokens” they can use at pot shops.
- Social media site MassRoots provides a place to share photos of your favorite sativa strain without getting yourself written out of Grandma’s will.
- Upload a photo of the car you want to sell and set a list price. Blinker connects you to buyers, from dealerships to people in your social networks.
- Select the brands you love, and their new products appear on your phone. It’s like creating your own department store.