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Utah’s reputation as an emerging tech hub is gaining momentum, with national investors beginning to take note of local talent. But the state’s tech entrepreneurs still face their share of struggles, from hard-to-find engineers and executive talent to overcoming cultural stigmas.
We’d like to give a special thank you to Brad Bertoch, president of the Wayne Brown Institute, for moderating the discussion.
How has our current economy affected you?
PETERSON: Our industry is all based on residual revenue. So we sign up a customer and in two or three years get residual revenue. Before the recession hit, our current base would add new revenue with new products or new services. Through the recession what we found was we were still selling new business, but our current base wasn’t replenishing itself. So it was much more difficult to grow in a net positive value than it was in the past.
We’ve noticed in the last probably nine months that trend is starting to change. Now people downsize or some are still going out of business, but for the most part our net current base is growing—the companies are growing and adding new services. Fortunately for us, technology is a good sign of growth. When people grow, they need more bandwidth or more phone lines or more technology.
LUMAN: Our customer base is really the global 5,000. When we started out three years ago, there was nothing really happening here in Utah as far as labor growth. We do digital interviews, and we support them with a platform for the enterprise. In the last 12 to 14 months, we’ve brought on a dozen or so Utah customers. University of Utah Hospital has just joined in. Out of the gate, they became one of our top 10 volume users.
BHASKAR: Companies are now going full force in acquiring new equipment, probably because most of the equipment they have is now five years old—which, in technology, is obsolete. They have to upgrade. So we’re seeing new growth now because of that.
Do you see more activity in terms of companies to work with? Quality of companies?
KUNZ: Yeah. Because we’re in the software tech space, you still have this dramatic downshift of the cost to build a software tech company. It continues to go down. Right? Here in Utah, the early-stage tech-startup space continues to grow because of that downward movement.
But at the same time, our tech labor resource is actually one of the lowest paid, when you look at the national scale. So what that means here in Utah is we can create these companies that are not capital intensive, but at the same time have very economical developer resources to run them. So that gives them a longer runway as compared to Silicon Valley.
How has the medical device sector fared? Has the recession impacted you?
GREEN: We’re in a fairly non-cyclical industry—people get sick every day of the year. So the recovery or lack thereof has really had very little impact on us. Our product is in a new category, so we’re seeing substantial growth.
Regarding the local economy, the one thing that stands out that’s affected us most recently is the labor situation. We have some of our manufacturing here locally. We use a contract manufacturer, but they still require hiring folks that assemble product, cut silicon, do various manual processes. We’re the land of call centers. And recently, there’s been an announcement of 800 new jobs that are reasonably high paying for fairly low-skill-level jobs in Logan. That’s actually taking our manufacturing people away from the line.
LEHMAN: Well, there’s nothing like launching a very premium product in the midst of a recession. But from a business perspective, the recession’s forced us to make really good decisions. We didn’t have external capital to go to, so we were bootstrapping it through this timeframe.
But what we’ve discovered is that when there’s a technological advantage, we still found customers. We’re an international business. So even amidst very hard times, people are willing to pay for a technological advantage.