In the 60s or 70s, IBM made all their plastics, worldwide, for their machines near Boulder, where SparkFun is based.
As a result of that, when IBM moved production elsewhere, much of the talent stayed in the area - now there are a lot of high quality smaller companies with injection molding and other plastics experience etc. in the area.
Another area in business where the high rents and "you need a VC" mentality would have worked against real world success.
CO attracts high quality people - although the housing prices skyrocketing is going to affect whether the younger people who are less financially established, will come in the same numbers as before.
> although the housing prices skyrocketing is going to affect whether the younger people who are less financially established, will come in the same numbers as before.
But at least you can just go East here. The towns surrounding Boulder--Superior, Louisville, Lafayette, Longmont, etc.--are great places to live, costs are far lower than in Boulder proper, and your commute is still only 15-30 minutes. I live in Lafayette and commute into Boulder; it takes 20 minutes and it's mostly on 2-lane roads going past farmland.
And as an added bonus, when I'm missing a part for one of my electronics projects, I can always stop by SparkFun. :)
> although the housing prices skyrocketing is going to affect whether the younger people who are less financially established, will come in the same numbers as before.
It's been mindblowing how much housing has gone up over the Front Range even in the last ten years (median price of a single family home in Boulder is now over $1M whereas ten years ago I think it might have been a third of that). Much of the affordable housing for northern Colorado means being all the way up in Larimer or Weld county if you're interested in a single family home. I think this is only going to get way worse, with a number of companies like Google and Amazon significantly growing their footprint around Boulder and Denver.
I don't know, that place has actually tracked SV in a lot of ways, from a good university, to a concentration of smart people, to some good VC's, to being a nice place, to ... rampant NIMBYism that has driven housing prices up to nearly 700K (Zillow).
Do any of you modern Colorado people have an opinion of Colorado Springs these days for startups or tech or really anything?
I went to school there (CC) but that was back in the early 90's so I'm not exactly up on things, but I've long considered reconnecting with the area, finding an excuse to open a satellite office or something.
In my memory the Springs was pretty sleepy and outside of the small little hippie commune liberal arts college was mostly comprised of retired or military or both.
Does Colorado Springs figure at all in Colorado's business/tech scene?
SparkFun is based in Niwot between Boulder and Longmont, so the cost of living would be much cheaper there. Much cheaper than Boulder and obviously cheaper than Silicon Valley.
Colorado has its own problems and housing costs are rising, but there are plenty of places to live here that are affordable. Even if you live in Denver, I think you get a better value for your salary than in SV.
Silicon Foo is a meme for non-technical types used to communicate some sort of software renaissance by a city. It makes them picture the AmaGooFaceSofts of the world opening up offices to rescue their economy. Or maybe they picture the next UberLyftAirbnb will happen in Fooville.
Of course it makes us want to vomit because we take it literally and know that isn't what's going to happen.
The Bay Area[0] is the Emperor of building software (business and consumer) and it will always be that way. The Bay Area's primary business is the building of software and thus software is created there for software companies as well.
At the rest of the Silicon Hopefuls, just getting a handful of legit tech companies that want to build software specific to that city's primary economies (oil, real estate, defense contracting, lumber, etc.) would do A LOT of good.
Disclaimer: I don't live in the Bay Area. I live in Silicon Foo where talented software builders either run away or work remote for Bay Area companies.
0 - Citizens of other very large cities: please don't have your egos bruised. Your cities matter, too. Ok, you know I'm really just talking to New Yorkers who have a hard time not being the best at everything.
Not pertaining to OP's article, but when reading fluff pieces about some "next silicon valley", it's always strange seeing them use the opening of a Google or Amazon satellite office as some kind of validation of their claim.
Do they really not understand what the valley is about?
Historically speaking silicon valley so named for hardware: HP, Fairchild, Intel, AMD, SGI, etc. Not sure what % of the economy is hardware vs. software these days.
Sparkfun has not had to compete talent just yet. Wait until the competition for talent in Colorado reaches SV level. Sparkfun will have to stop relying on "I want to work at a cool/fun/relaxed place badly" and start paying market rates for talent.
Take a look at their crazy application process. It's built around how badly labor wants to work there. This strategy doesn't work in SV anymore.. Good candidates want to get paid, not have "fun times" at work. Sparkfun's talent strategy is built on concepts that are well over 15 years old.
I agree with this comment as it applies to the general tech ecosystem here, but Sparkfun might actually be exempt from this because it is legitimately a very cool place to just be around... But that said yeah, it is very apparent that too many companies here are coasting on the general area's appeal. We're just starting to hit the point where that won't cut it anymore, and I think a lot of companies that have gotten by on quality talent at cut rate prices due to the lack of competition and the inherent desirability of the area are in for a serious rude awakening.
Salaries are already starting to rapidly increase (more than they already were) in Boulder just with the announcement of companies like Google moving large offices here and it's been very disconcerting to see companies resort to the same tactics used by Bay Area companies to circumvent paying people (company commuter busses so you can live in more affordable areas, $500 ski passes instead of $5k raises, free food, etc etc). This area can't really even bank on the usual scam of promising big exists since those are much more rare in these parts. Watching the economics of the whole situation has been very interesting, especially when you see that they're only going to make many of the social problems we're dealing with much much worse.
There are a shocking number of older tech companies around Boulder (say 10+ years old) that haven't gotten the memo about the market value of engineers. They've somehow gotten away with paying engineers $80k/yr, and now they can't even hire a new grad for that.
I've certainly had several hiring discussions that were going great until we hit salary. I make good money but nowhere near crazy money, yet these hiring managers weren't even in the same ballpark.
I work at another Boulder company just down the road from SparkFun, also founded by a CU student in his dorm room, which has been successful without VC investment. Boulder is an odd hybrid of new tech companies and more traditionally bootstrapped companies like SparkFun.
There's plenty of VC-funded startups in Boulder, too. The main pedestrian mall downtown, Pearl Street, is flanked by tech companies on the 2nd/3rd floors, above the retail shops. It feels quite similar to University Ave in Palo Alto, back when I lived there in the 90's.
Perhaps the biggest difference is that where Silicon Valley is geographically locked-in and there's no cheap office space to be had, in Boulder you can go East a little bit and the price of office space drops dramatically. Taking SparkFun as an example, it's not on Pearl Street, it's several miles outside of town in an industrial park.
As such, Boulder gets to be both a micro-size Silicon Valley and a more normal commercial environment as well. It's also just a great place to live, housing costs are reasonable (relative to California anyway), there's tons to do, and it's a good place to raise a family.
Boo! No, don't move to Colorado! It's terrible here! Too much snow! White people all the way to Nebraska! The views are over-rated! Skiing is too expensive! Beer is all just hop-juice or Coors! Terrible food! Nothing but Papa Jonh's and stoners! Stay Away!
I agree and like this article but the midwest needs to adopt a few things the valley did right. 1) Hand out more equity to early employees and create a flywheel of entrepreneurs who build and finance other businesses. 2) Get rid of the non-compete culture. Standard form in Chicago is 18 months. This is unenforceable in Cali. 3) Put value on youth. We still live under a manufacturing seniority mindset. One woman once told me "I can't wait to turn 30 so I can be taken seriously". The midwest has all the talent and ingenuity it needs. It has a unique perspective and is relatively inexpensive to live in, but the rules need to be revised to favor competitiveness.
When I graduated with my CS degree, I knew I wanted to be a part of startups, so I decided to move to either SF or Boulder. And I'm so, so, so glad I picked Boulder.
My company operates in several cities and it's great to have options like SF, NY, DC, etc. where there's a ton of activity and a ton of $$$, but most of the time, we just don't need it. Most of the time we want a place to actually enjoy our work. We frequent Boulder & Austin since we have investors in both locations.
I don't think you need to replicate Silicon Valley. Why would you want to? It has serious problems that are not going to be easily addressed.
Also, it isn't a given that money has to continue to concentrate in a few places. This is not some force of nature we are watching. It is human activity. Sure, human activity gets influenced by factors outside of our control. It is easier to "go with the flow" of various things than to swim upstream. But we have a lot more ability to choose to do something else if we don't like how this is going than most creatures have.
I don't like how articles (like the Wired article that inspired this post) just seem to presume all we can do is document the trend and make our peace with accepting it. That is crazy. If people think this is a terrible, corrosive trend, then why not write articles that give push back to the trend (like this one does) instead of just documenting it like a runaway train we cannot stop?
VCs can go invest money wherever they want. Rich people have far more mobility than others. They don't have to limit themselves to a handful of places. Nor are other people simply doomed to curry favor with them. Most of their so-called money isn't actually in the form of money per se. They own stocks or real estate or whatever. Money has to circulate like blood in order to stay alive. They need things to invest in. It isn't in their best interest to let it sit in a vault rotting.
It is absolutely not a given that these trends have to continue in this same direction. Humans can say "Oh, we don't like where our behavior is taking us. Let's consider other options." It isn't a Greek Tragedy where the more you try to resist your fate, the more doomed you are to entrench it as the only option.
At the end of the day, it's about access to capital. My wild hypothesis is if some angel investor said, "I'm going to invest 10 billion dollars in funding startups but you have to relocate to Colorado/midwest/anywhere for the first 5 years", then in the next 5 years that city will definitely "have a prosperous startup industry". Yes, you can be successful bootstrapping but it seems so much easier once you have funds to use for hiring/marketing/scaling/etc. (Note: I've never raised any amount of capital before.) In addition the "we've raised money" badge also signals legitimacy to potential employees, customers, partners.
It begs the question of why we (generally) feel like tech startups need to think/behave differently than traditional businesses.
"Startups" in the sense of new businesses have been around for centuries (arguably longer). But recently, the popular image of most tech companies is raising large amounts of money to grow/scale really quickly. If anything, shouldn't the fact that engineers understand how to leverage technology lead to higher profitability and lower need for capital than all the brick-and-mortar businesses that came before us? Like the SparkFun founder says, as an engineer, I started a company that I knew how to build and implement on my own.
It is mostly a question of terminology. Around here, "startup" is defined as hyper-growth, because YC chose to define it that way and HN came from YC. In other places, it can have a more flexible definition. So while most of the audience here will absolutely agree that you don't need VCs or insane growth to start a business, on HN, that would be coined as a "lifestyle" company, not a "startup". (And in my mind, more power to anyone who goes that route.)
"In those beginning stages, I never would have been able to pay for warehouse space in the Bay Area while waiting for investors to commit"
You'd be crazy to start a warehouse in Silicon Valley -- run your development and operations there, but when you're ready to move out of your garage into a real warehouse, put the warehouse (and product assembly) in Tracy or someplace like that that's an hour's drive away and much more affordable.
A cooperative[0] is usually operated and run for the mutual benefit of it's members. So for example, a credit union co-op provides services by members, and for members.
Since Sparkfun provides the majority of it's services to non-members, it's unlikely that it would fit the bill of a co-op.
St. Louis here. The startup scene here are also trying to copy the Silicon Valley model, instead of trying to be something unique and different. It is frustrating.
The headline posted here is misleading; the actual article says "Colorado Doesn’t Need to Replicate Silicon Valley to Have a Prosperous Startup Industry"
As a QA Engineer (living in Broomfield, 9 miles east), the number of cold calls I am getting from recruiters for tech positions in Boulder is averaging 4/week. This number has been steadily rising the past 3 years. Boulder may not be SV, but as Nate says, it doesn't have to be. It is it's own beast and it is, by my eyes, succeeding.
Yeah the startup scene is pretty rag tag and unprofessional in a lot of ways, but in other ways it far exceeds any capabilities you'll find in California or anywhere else for that matter. Boulder doesn't really need a model, they are sort of pushing a bunch of envelopes uphill all on their own.
Related: I run an engineering team in Dallas, TX and moved to Colorado recently. Where would you look for high quality, heavily growing firms in the area? I'm only interested in running large teams - otherwise I get bored. Eg: CTO or Managing Director style roles.....
[+] [-] patrickg_zill|8 years ago|reply
As a result of that, when IBM moved production elsewhere, much of the talent stayed in the area - now there are a lot of high quality smaller companies with injection molding and other plastics experience etc. in the area.
Another area in business where the high rents and "you need a VC" mentality would have worked against real world success.
CO attracts high quality people - although the housing prices skyrocketing is going to affect whether the younger people who are less financially established, will come in the same numbers as before.
[+] [-] jdcarter|8 years ago|reply
But at least you can just go East here. The towns surrounding Boulder--Superior, Louisville, Lafayette, Longmont, etc.--are great places to live, costs are far lower than in Boulder proper, and your commute is still only 15-30 minutes. I live in Lafayette and commute into Boulder; it takes 20 minutes and it's mostly on 2-lane roads going past farmland.
And as an added bonus, when I'm missing a part for one of my electronics projects, I can always stop by SparkFun. :)
[+] [-] rpcope1|8 years ago|reply
It's been mindblowing how much housing has gone up over the Front Range even in the last ten years (median price of a single family home in Boulder is now over $1M whereas ten years ago I think it might have been a third of that). Much of the affordable housing for northern Colorado means being all the way up in Larimer or Weld county if you're interested in a single family home. I think this is only going to get way worse, with a number of companies like Google and Amazon significantly growing their footprint around Boulder and Denver.
[+] [-] w00tw001|8 years ago|reply
[+] [-] davidw|8 years ago|reply
I don't know, that place has actually tracked SV in a lot of ways, from a good university, to a concentration of smart people, to some good VC's, to being a nice place, to ... rampant NIMBYism that has driven housing prices up to nearly 700K (Zillow).
[+] [-] pdeuchler|8 years ago|reply
[+] [-] CPLX|8 years ago|reply
I went to school there (CC) but that was back in the early 90's so I'm not exactly up on things, but I've long considered reconnecting with the area, finding an excuse to open a satellite office or something.
In my memory the Springs was pretty sleepy and outside of the small little hippie commune liberal arts college was mostly comprised of retired or military or both.
Does Colorado Springs figure at all in Colorado's business/tech scene?
[+] [-] w00tw001|8 years ago|reply
[+] [-] eeeeeeeeeeeee|8 years ago|reply
Colorado has its own problems and housing costs are rising, but there are plenty of places to live here that are affordable. Even if you live in Denver, I think you get a better value for your salary than in SV.
[+] [-] curiousgal|8 years ago|reply
[+] [-] rubiquity|8 years ago|reply
Of course it makes us want to vomit because we take it literally and know that isn't what's going to happen.
The Bay Area[0] is the Emperor of building software (business and consumer) and it will always be that way. The Bay Area's primary business is the building of software and thus software is created there for software companies as well.
At the rest of the Silicon Hopefuls, just getting a handful of legit tech companies that want to build software specific to that city's primary economies (oil, real estate, defense contracting, lumber, etc.) would do A LOT of good.
Disclaimer: I don't live in the Bay Area. I live in Silicon Foo where talented software builders either run away or work remote for Bay Area companies.
0 - Citizens of other very large cities: please don't have your egos bruised. Your cities matter, too. Ok, you know I'm really just talking to New Yorkers who have a hard time not being the best at everything.
[+] [-] wamatt|8 years ago|reply
[+] [-] CPLX|8 years ago|reply
My life is a veritable cornucopia of remarkable urban experiences so I have to get back to that now.
[+] [-] acchow|8 years ago|reply
Do they really not understand what the valley is about?
[+] [-] nerfhammer|8 years ago|reply
[+] [-] w00bl3ywook|8 years ago|reply
[+] [-] pdeuchler|8 years ago|reply
Salaries are already starting to rapidly increase (more than they already were) in Boulder just with the announcement of companies like Google moving large offices here and it's been very disconcerting to see companies resort to the same tactics used by Bay Area companies to circumvent paying people (company commuter busses so you can live in more affordable areas, $500 ski passes instead of $5k raises, free food, etc etc). This area can't really even bank on the usual scam of promising big exists since those are much more rare in these parts. Watching the economics of the whole situation has been very interesting, especially when you see that they're only going to make many of the social problems we're dealing with much much worse.
[+] [-] jdcarter|8 years ago|reply
I've certainly had several hiring discussions that were going great until we hit salary. I make good money but nowhere near crazy money, yet these hiring managers weren't even in the same ballpark.
[+] [-] jdcarter|8 years ago|reply
There's plenty of VC-funded startups in Boulder, too. The main pedestrian mall downtown, Pearl Street, is flanked by tech companies on the 2nd/3rd floors, above the retail shops. It feels quite similar to University Ave in Palo Alto, back when I lived there in the 90's.
Perhaps the biggest difference is that where Silicon Valley is geographically locked-in and there's no cheap office space to be had, in Boulder you can go East a little bit and the price of office space drops dramatically. Taking SparkFun as an example, it's not on Pearl Street, it's several miles outside of town in an industrial park.
As such, Boulder gets to be both a micro-size Silicon Valley and a more normal commercial environment as well. It's also just a great place to live, housing costs are reasonable (relative to California anyway), there's tons to do, and it's a good place to raise a family.
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[+] [-] miles_matthias|8 years ago|reply
My company operates in several cities and it's great to have options like SF, NY, DC, etc. where there's a ton of activity and a ton of $$$, but most of the time, we just don't need it. Most of the time we want a place to actually enjoy our work. We frequent Boulder & Austin since we have investors in both locations.
[+] [-] Mz|8 years ago|reply
Also, it isn't a given that money has to continue to concentrate in a few places. This is not some force of nature we are watching. It is human activity. Sure, human activity gets influenced by factors outside of our control. It is easier to "go with the flow" of various things than to swim upstream. But we have a lot more ability to choose to do something else if we don't like how this is going than most creatures have.
I don't like how articles (like the Wired article that inspired this post) just seem to presume all we can do is document the trend and make our peace with accepting it. That is crazy. If people think this is a terrible, corrosive trend, then why not write articles that give push back to the trend (like this one does) instead of just documenting it like a runaway train we cannot stop?
VCs can go invest money wherever they want. Rich people have far more mobility than others. They don't have to limit themselves to a handful of places. Nor are other people simply doomed to curry favor with them. Most of their so-called money isn't actually in the form of money per se. They own stocks or real estate or whatever. Money has to circulate like blood in order to stay alive. They need things to invest in. It isn't in their best interest to let it sit in a vault rotting.
It is absolutely not a given that these trends have to continue in this same direction. Humans can say "Oh, we don't like where our behavior is taking us. Let's consider other options." It isn't a Greek Tragedy where the more you try to resist your fate, the more doomed you are to entrench it as the only option.
[+] [-] dalfonso|8 years ago|reply
[+] [-] got2surf|8 years ago|reply
"Startups" in the sense of new businesses have been around for centuries (arguably longer). But recently, the popular image of most tech companies is raising large amounts of money to grow/scale really quickly. If anything, shouldn't the fact that engineers understand how to leverage technology lead to higher profitability and lower need for capital than all the brick-and-mortar businesses that came before us? Like the SparkFun founder says, as an engineer, I started a company that I knew how to build and implement on my own.
[+] [-] codingdave|8 years ago|reply
[+] [-] Johnny555|8 years ago|reply
You'd be crazy to start a warehouse in Silicon Valley -- run your development and operations there, but when you're ready to move out of your garage into a real warehouse, put the warehouse (and product assembly) in Tracy or someplace like that that's an hour's drive away and much more affordable.
[+] [-] Apocryphon|8 years ago|reply
[+] [-] dsp1234|8 years ago|reply
Since Sparkfun provides the majority of it's services to non-members, it's unlikely that it would fit the bill of a co-op.
[0] - https://en.wikipedia.org/wiki/Cooperative
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