Why You Should Start a Company in... Boulder

It used to be, if you were serious about starting a tech company, you went to Silicon Valley. But emerging entrepreneurial hubs around the country are giving startup aspirants options. In this series, we talk to leading figures in those communities about what makes them tick.

When Brad Feld moved to Boulder, Colorado, in 1995, he found a college town that was best known for its rock-climbing and meditation centers. Using a pile of cash from two acquisitions, Feld pioneered a thriving startup scene that now includes 171 fledgling companies (and a city campaign that proclaims "Boulder is for startups"). The Foundry Group, the venture firm that Feld founded, reigns as Boulder's biggest software and Internet venture capital firm, having fostered entrepreneurial growth through organizations like the incubator TechStars, and investments in local companies including Social Thing and Lijit.

Boulder's current entrepreneurial ecosystem boasts relocated second- and third-generation entrepreneurs like Kimbal Musk, who with his brother Elon (now of Tesla), started and sold Zip2 and PayPal, and now runs real-time search engine OneRiot. And a few startup junkies like the 25-year-old Andrew Hyde, who has launched four companies, including workshop outfit Startup Weekend, which has toured 52 cities around the world. One of Boulder's most recent entrepreneur transplants, Joe Stump, left a prestigious position at Digg to launch software firm SimpleGeo in Boulder. Colorado-born tech firm MX Logic, which helped build an Internet-era talent base with its email services business, sold this year to McAfee for $140 million. And one of Feld's investments, Service Metrix, sold for $280 million in 1999, giving Boulder one of its biggest exits.

Feld spoke recently with FastCompany.com about what makes Boulder's startup scene unique. What did we unearth? Boulder, CO is a small, highly networked city inhabited by active life-styled, serial entrepreneurs. Brad Feld lays out, in great detail, an entrepreneurial ecosystem that may have the right mix ingredients to be a startup capital.

How would you describe Boulder's startup scene?

I moved here 15 years ago from Boston, and when I moved here I didn't know anybody, which is a useful reference point, which is that Boulder is a reasonably small town. It's 100,000 people, not including the college kids. It's another 25,000 college kids. It's a pretty small number of people, but it's an extremely high concentration of computer science people and PhDs. I think the stat that gets thrown around is that on a per capita basis we're no. 1 in both of those. That's important because what happens is you get a very significant concentration of smart people who use technology in their day-to-day work and combined with a very independent personality. It's a hippy town. My joke about Boulder is that the hippies ran out of gas on their way to the Bay Area and just said, "Eh, I'll stay here, it's pretty." So you sort of have this very independent, high concentration of smart people, combined with sort of a sense that the integration of what you do in work and life is important.

What's happening in Boulder's entrepreneurial ecosystem that makes it sustainable?

I think one of the things that makes Boulder special is that you have this larger percentage of people willing to engage in the entrepreneurial community, and that integrate into their life very effectively, versus it becomes this thing that they do for a period of time and then need to go have a life, but still want to be in the same place. Those two things sort of work together.

So, that's thing one.

Thing two that I think is special is that there's very little friction here. There's no commutes; we're living in a world where it doesn't matter whether you're sitting at your desk in your office, you're sitting in your home, you're sitting in a coffee shop, you can get work done. Especially with software and Internet-related things, you're always connected, and as a result, the integration and probably the ability to sustain a level of intensity that's required is higher.

There used to be a rap on Boulder that people didn't work very hard. Five o'clock and you're out on your mountain bike. The problem with that is, and it's true in other cities that are really high quality of life cities. Yeah, you're on your mountain bike from five to seven then you're back at your desk and you're back in front of your computer at eight and then you work until one in the morning. And you see it within the entrepreneurial strata. I mean, it is not bad to go out for a run in the middle of the day, or a bike ride--because everybody that's in the entrepreneurial community is working their 12- to 15-hour day day in and day out. And they're just not working between nine and five. They're not organizing their day around the morning and evening commute, or whatever those bookends of the natural twelve-hour entrepreneurial day are.

So that's a big part of it.

The last sort of Boulder differentiator, which I think is really important, is that because of the size of Boulder, it's big enough to be interesting, but not so big to be overwhelming. It ends up being extremely collaborative place. We're probably in our third or fourth generation of entrepreneurs here.
The most interesting thing about this most recent wave is that first of all there are a lot of people who made a lot of money in the pre-bubble time frame. So you had a lot of successful entrepreneurs who made meaningful amounts of money. That's important.

You have a lot of those entrepreneurs that had a success. Wasn't necessarily their first company, but they had a success. And then, they had a failure between the 1998 and 2003 timeframe. So they started another thing or made some investments that got caught up in the bubble. So they had both a success and a failure in that time. So some set of those people started companies from 2004 forward. They were very mature entrepreneurs. They're entrepreneurs that had success AND failure and understand what was required to both win and also were humble enough to recognize that you could lose. So you had that against a backdrop of, everybody here is at most two degrees of separation away from any other entrepreneur, because there's only 100,000 of us, right? And that then is great because what you have is this easy access to everybody. And even though there's competitive dynamics and occasionally friction, and there's plenty of personalities. More generally, you tend to see that people try to help each other here, especially around the thing that I think is the generator of new entrepreneurial activity, which is young, first-time entrepreneurs.