For entrepreneurs based in Utah, getting a cold shoulder from investors is part and parcel of life. During the noughties, technology companies, largely based between Provo and Ogden, were ignored by venture capitalists. These companies survived by bootstrapping or getting funds from their own pockets. This, analysts found, was one of the multiple reasons for their spectacular success.
The 80-mile-long slice between Provo and Ogden has given birth to a minimum of five companies presently valued in excess of one billion dollars. The density of technology companies in this piece of land is exceeded only by California, Massachusetts, and New York. A new term 'silicon slopes' has been coined to describe this expanse. The name is both a comeuppance to the Bay Area nickname of silicon valley and also a nod to the excellent ski locations the state is known for.
For Utah, the change did not happen overnight. The 1970s saw WordPerfect and Novell setting up operations in the region. Omniture and Overstock.com are among the more successful companies made during the dot-com boom period. Since companies were largely ignored by VCs, they were forced to innovate. It also helped that the founders treated their companies like a farm or a family business. With minimal outside funding and zero lifelines, the Utah companies had no choice but to find their own solutions to tricky problems.
The Mormon spirit
According to Mark Gorenberg of San Francisco-based Zetta Venture Partners, one excellent reason for success was that a number of startups excelled in data analytics. Expertise in this field pushed the state onto the tech map. Other than crunching data, e-commerce companies, along with those specializing in cloud computing and medical devices, have also tasted success.
It's no surprise that with the growth of the local tech community, a number of local Venture Capitalists have come up in the state. They have started to offer seed money and also enabled companies' participation in the latter funding rounds. As per data insights provided by CB Insights, about $2.6 billion was invested in 10 Utah companies. There is another hidden factor too. The Mormon culture prevalent in the region gives rise to collaborative spirit among the tech community in silicon slopes. Founders of tech unicorns get together on a regular basis. The focus on family and care for each other percolates to businesses as well.