WA-The “State” of Entrepreneurship

At the Sleeping Lady Lodge in the old Bavarian town of Leavenworth, the Tech Institute recently conducted their semi-annual retreat, focusing on the state of K-12 education and entrepreneurship here in WA State. A mixture of state legislators, educators, and general movers and shakers in the state came together over cocktails, excellent food, and some more cocktails to work out some of the more difficult questions confronting the state.

The Alliance of Angels participated by putting on an interactive seminar in angel investing getting the audience to evaluate and decide whether to invest in several different early stage companies. One of the highlights of the event was a panel discussion about Entrepreneurial Company Leadership featuring some great up and coming and established CEO’s from local companies. Moderated by Peter Wilson, Engineering Director at Google, the panel featured Jeremy Jaech (Founder of Aldus and Visio and now with Trumba), Rob Arnold (President of Geospiza, Inc), Christina Lomasney (President and CEO of Modumetal, Inc), and Steve Sliwa (CEO of Insitu, Inc).

The Panelists addressed a number of questions about the “competitive advantage” of the Northwest as a place to start and grow a company vs locating in the Bay Area. Several chief concerns in this process were raising funding, finding good workers, the cost of starting and running a business, and the quality of life for employees (focusing on housing prices).

On the first note, while the Seattle venture community has grown by leaps and bounds and is now third in the country after the Valley and Boston in dollars invested, the panel felt that it was still more difficult to get that first VC to bite. While Jaech’s didn’t have much trouble getting funding for Visio (he attributed it to great timing, although after Aldus he obviously didn’t have to go knocking down many doors) he did get all of his funding from the Bay Area and two other panelists mentioned that getting that first investment from the Bay Area helped speed up the process of getting commitments from local VC firms.

On the second point, several presenters made the case that proximity to the UW has been hugely beneficial both in terms of shared resources and research. While Lomasney did mention some real frustrations about getting ideas out of tech transfer, the process has been streamlined in recent years with changes to the ethics laws and more technologies are making their way out as noted recently by John Cook.

Contrasting the cost of starting and running a business in the Northwest vs the Bay Area, Seattle maintains an advantage. While none of the panelists went into great depth about the business costs associated with starting out in WA, Glenn Kelman recently posted a great piece on Guy Kawaski’s blog disclosing his actual financials for the first two years at Redfin vs his original projections. He also addresses what the costs would have been had he started in the Bay Area.

Finally, even with the recent jump in housing prices, the Seattle area is still downright affordable compared to the Bay Area and there is no great danger of Capital Hill passing Nob Hill in terms of prices or snobbery anytime soon.