Seattle’s entrepreneurial DNA: how the city has forged a unique identity for itself
The Techstars startup program has identified emerging ‘hot’ geographies. The Drum examines the case for Seattle.
The words ‘tech startup’ are most commonly associated with Silicon Valley, but hyper-competitiveness and spiraling costs have led some prospective leaders in the digital marketing space to look farther afield.
In the US, a number of geographies have proven attractive to entrepreneurs eager to etch their names in the annals of tech disruption, and those keen to deviate from the path to success established by California-based behemoths such as Apple, Facebook and Google.
Earlier this year, New York City Mayor Bill de Blasio unveiled an initiative geared toward rivaling Silicon Valley for the crème de la crème of tech talent. Although, with New York’s notorious cost of living, it could be argued that the Big Apple’s only unique selling point for digital marketing startups is its ready access to Madison Avenue – the epicenter of decision making when it comes to channeling advertising dollars.
This begs the question of where provides a suitable alternative to the US’s traditional economic power bases of New York and Silicon Valley?
Various locations have emerged in recent years as a potential answer to this question: Boston, Massachusetts; Boulder, Colorado; Cleveland, Ohio; Jacksonville, Florida; and Seattle, Washington, are among the more pre-eminent candidates.
Each possesses its own qualities, both in terms of economic and social attributes, but it is arguably the Northwest hub of Seattle, which counts among its natives the digital behemoths of e-commerce Amazon and Microsoft, making it stand out among these contenders.
Away from household names, mid-sized startups in the digital marketing space to hail from Seattle include SEO specialist Moz, whose chief executive Sarah Bird is a graduate of the University of Washington, plus mobile marketing outfit Tune, whose co-founders Lee and Lucas Brown are natives of Washington state.
A strong draw for the region is the continuing wave of tech talent to pour out of Bird’s alma mater the University of Washington, with the institution’s computer science program a world-renowned breeding ground for some of the sector’s finest talent. In fact, its importance to the local digital economy was tacitly acknowledged when Amazon made it the beneficiary a $10m grant in late 2016.
With the university department producing more than 600 graduate software engineers on an annual basis, it’s likely that the e-commerce giant was so generous with its money in the hope that it will continue to supply the local labor market with such talent right on its doorstep.
John Sechrest, founder of the Seattle Angel Conference and a locally based startup mentor, says the University of Washington’s Startup Hall is now proving a useful conduit for engineering talent and the digital ecosystem.
“Something that makes things go faster in Seattle is the large number of events and co-working spaces to get started from. It is not unusual to have months where there are more than 100 – and sometimes 200 – startup/entrepreneur-oriented events in the community,” he says.
“With more than 50 co-working spaces, there are many places to cross paths.”
To further the flow of talent into the space, in 2013 the then City of Seattle mayor Mike McGinn lent the weight of public support to this effort to rival other tech hubs when it comes to attracting (or better still, maintaining) such talent, which is crucial to a thriving startup hub.
This initially took the form of Startup Seattle, an initiative aimed at promoting the city’s attractiveness by highlighting its social and economic attributes to potential startup and innovators of the future.
However, when it comes to a like-for-like comparison between Seattle and the more established US cities, the ready access to early-stage funding remains an issue.
For this, California’s Bay Area and Silicon Valley still have more gravitational pull – although changes are afoot, with the Northwest’s swelling pool of tech talent helping to divert investment.
Illustrating the popular perception of the current status quo, Eric Franchi – himself an entrepreneur-turned-angel investor based in New York City – speaks of an unconscious “proximity bias” that exists in the minds of many investors.
“A lot of the companies come through Silicon Valley or New York because if you’re going to build a startup that focuses on the tech and media business [and be based elsewhere], then you’re going to have to be prepared to spend a lot of time on the road,” he says.
Undoubtedly, the Northwest does provide a lot of lucrative draws for entrepreneurs, but the lure of traditional geographies is still a force to contend with.
“When you look at the likes of Microsoft and Amazon, it goes to show that it’s perfectly possible to build a world-changing company in Seattle,” says Franchi. “However, as much as software is changing the world, there is still no substitute for that face-to-face relationship.”
Chris DeVore, managing director of Techstars Seattle, says capital is a constraint for very early-stage startups (i.e. those seeking seed and pre-seed funding) based in the region, pointing out that Series A investors and beyond have written large checks for companies there.
Describing the unique identity that Seattle has forged for itself, he observes: “The biggest difference between Seattle and San Francisco is a cultural one. Seattle has always been a ‘company town’, where the default career path is to join an existing scaled company rather than founding a startup.”
DeVore adds that this has resulted in a scenario whereby being a company founder in the city “is more counter-cultural, and affords less social recognition”.
He points out how the Techstars accelerator program is aimed at highlighting the attractiveness of the city to venture capitalists and budding entrepreneurs alike.
Techstars Seattle offers applicants the opportunity to benefit from the mentorship of locally based leaders in the space, with the final prize being potential investment from a local investor – up to $120,000 per participant.
Now poised to induct its ninth intake, the next program’s application deadline is October 15, with successful applicants taking their places in the following January. The three-month boot camp culminates in a Demo Day that will be held on April 19.
Earlier Techstars Seattle inductees involved in digital marketing have included VendorHawk, which announced a seed round of funding of $1.2m from investors including iNovia Capital, as well as Techstars Ventures, Social Starts, Telos Ventures, Curious Capital and Alliance of Angels.
Startups interested in applying to Techstars Seattle should visit apply.techstars.com
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