Tech Symbiosis: Why Utah startups are forging connections in Silicon Valley
Say there’s something in the water. Maybe it’s a little lingering pioneering spirit. Or it could just be a pervasive drive to innovate and succeed.
Whatever the reason, Utah has distinguished itself as home to a collection of tech companies that keep growing in number and size. And rather than the success of Silicon Slopes breeding contentious competition with Silicon Valley, startups are finding the older tech hub is teeming with opportunities to help them grow faster and stronger at home.
Expertise and funding
Last year, SimpleCitizen was accepted into startup incubator Y Combinator’s summer cohort. For SimpleCitizen, a company trying to make the immigration and citizenship process as convenient and accessible as businesses like TurboTax have done for taxes, the program represented a chance to hone their skills in a far more intensive and effective way than they had been able to before.
“It was about going to California, learning from some of the best and brightest that tech and business have to offer, and working side-by-side and learning directly from them, which is a lot different than a TED talk,” says Sam Stoddard, founder and CEO of SimpleCitizen, noting there were many mentors eager to share their experiences. “They were able to give us insight into our market and just the way we’re running our business that we otherwise wouldn’t have noticed or thought about.”
One of the pointers was to raise prices for their services, Stoddard says, and while it seemed like a counterintuitive move for a business that involves legal documents, price is often seen to correlate with quality. SimpleCitizen has already seen higher follow-through from customers after the modest price increase. Through that and other lessons, Stoddard says, one of the biggest takeaways was an attitude of trusting data, not assumptions.
“I think just the sheer size of Silicon Valley compared to Silicon Slopes means there’s a greater access to people who have built billion dollar companies and have done that entrepreneurial journey before,” he says.
KiLife Tech, which is developing wearable safety tech to help keep kids from getting lost, finished a session at 500 Startups, another Silicon Valley incubator, in February. The intense and interactive nature of the incubator was invaluable, says KiLife Tech CEO Spencer Behrend, even if it did make the four or so months of the program somewhat stressful.
“You’re not sitting in class, per se, but you’re sitting down and talking about problems in your business or in your industry and having the benefit of their experience,” says Behrend of the mentors in the program.
Expertise is valuable, but the funding available in the deep pockets of Silicon Slopes investors is also a draw for startups. After KiLife Tech’s program ended in mid-February, Behrend and others stayed behind to continue raising funds for the development of their product.
Owlet, a maker of high-tech baby monitors, is venture backed, and has raised $25 million to date—the lead investor of which is based in Palo Alto. “Incredible, game-changing technology like Owlet takes money—a lot of money—to build and continue to innovate, so we are grateful for our investors who believe in and support our vision and have helped fund it. Our investors are amazing mentors to us with expertise in fields from healthcare to manufacturing and digital marketing,” says Owlet CEO and co-founder Kurt Workman.
Then why Utah?
Despite the wealth of resources available in Silicon Valley, there are still a host of reasons entrepreneurs are still choosing Utah as a place to start or grow their businesses. Not least among them is the dramatically lower cost of living that Utah boasts over the Bay Area.
“Even for the accelerator, it’s a significant investment, and some of us lived there full time while some of us commuted,” says Behrend, who himself made the weekly plane trip, seeing his wife and five children on weekends before heading back on Mondays. “We’re able to stretch those investment dollars so much further being in Utah.”
For entrepreneurs who were raised in Utah, moving away often means sacrificing close family ties—a high cost indeed for a culture so centered on family. “We love Utah and love being based here. Owlet got its start at [Brigham Young University], and as we continue to grow our business, we love all that Utah has to offer. The state is home to a strong workforce with top-rated universities to recruit from. I was born and raised in Utah. I love this state,” says Workman. “Bloom where you are planted.”
Increased communication and technology has made it far easier to build a highly connected business right in their own backyard. “We were able to make a connection that we needed while we were out there, and it’s pretty easy to stay connected,” says Stoddard. “And when push comes to shove, it’s only an hour plane ride away, so it’s close enough that you don’t need to move all the way out there.”
But perhaps most importantly is the fact that Utah also has a wealth of experience, mentorship and funding to offer entrepreneurs. The depth of Silicon Valley’s pond is greater because it has the benefit of age, not quality, Behrend says, and the attitude that breeds success in both areas.
“I think there’s some similarity there between the Bay and Utah in that there’s a sense of karma, I guess you could say—in the Bay it’s very prolific because you help people because goodness comes back to you. In Utah, we have that same sense of selflessness as a culture, and that helps us to pay it forward,” he says, noting that KiLife Tech has been actively seeking funding in Utah, as well. “Utah is still a growing market and I think it’s important that we mix both the money that we’ve raised in Utah with money raised outside of Utah in order to grow Utah’s economy.”
Behrand adds that the knowledge and connections KiLife Tech has gained from Silicon Valley are “something we’ll carry into the long term, and as we continue to raise additional money and as we continue to hit milestones, I think that network will be valuable.”
A network of entrepreneurs and professionals is helpful in terms of finding talent, too, says Workman. “People are what make any business grow. In Utah, having an ecosystem that fosters talent and passion has allowed Owlet to hire the best team to help us achieve our mission,” he says. “A good example is Peak Ventures, which is one of our investors. They are constantly trying to pull the community together and support Utah entrepreneurs. We love that.”
That cooperative culture is evident with established entrepreneurs like Josh James, Aaron Skonnard, Jeremy Andrus and Thomas Lee. The strides they and others have made in helping younger entrepreneurs and companies is what will ultimately help Utah’s already thriving tech culture skyrocket.
“You have serial entrepreneurs now not just on their first companies, but sometimes on their second or third. Those lessons get passed down, and the more people who are a part of the company’s journey, you learn a lot through that experience, and that experience is extremely valuable. You see the pool of mentors get stronger and stronger and stronger,” Stoddard says. “You see that in Utah, where the people who have been here before are reaching out.”
Stoddard notes mentorship programs at local universities—SimpleCitizen was born at BYU—as well as the University of Utah Entrepreneurship Challenge, which SimpleCitizen won in 2015, as resources that help make the ground in Utah even more fertile. The scrappy nature and entrepreneurial spirit carried over from the early pioneer settlers, too, persists. “You also have people giving back in terms of capital—you have people who have had success turning around and becoming angel investors,” he says. “That passion and that spirit is contagious.”