How Mormons Built the Next Silicon Valley While No One Was Looking - Marker

How Mormons Built the Next Silicon Valley While No One Was Looking - Marker


How Mormons Built the Next Silicon Valley While No One Was Looking - Marker

Posted: 15 Jan 2020 04:11 AM PST

It was at BYU that Rea met Dennis Steele, a Mormon from the Bay Area who did his missionary service in Argentina. The two conspired to start a cloud computing company to provide social monitoring and text-based messaging to local businesses. In 2016, they were accepted into Y Combinator and moved to Mountain View, California, but after graduating from the accelerator, they decided to return to Utah, which offered both affordable real estate and has the youngest population in the country. "There were companies starting at about the same time as us, trying to solve pretty similar problems, who were based in San Francisco, and they've kind of all dried up, because I think they just couldn't hire enough talented people competing with Uber and Google," Rea says.

Now Podium is a Google Ventures–backed, 650-person company housed in a five-story, 175,000-square-foot space in Lehi. An identical building next door is currently under construction to accommodate the company's growing workforce, which is expected to double in size. Podium is just one of at least a dozen fast-growing, early stage companies clustered in an area called Point of the Mountain, halfway between Salt Lake City and the BYU campus in Provo, that has become the epicenter of the "Silicon Slopes" tech boom. A decade ago, there was nothing but farmland and a state prison here; today, it's a chaotic scene of road detours, industrial equipment, and cranes throwing up black-glass monoliths along I-15. Out-of-state giants like Adobe, Microsoft, and Amazon have established significant outposts here, and Utah is now producing more jobs than it can fill with in-state talent. In the first three quarters of 2019, companies here attracted $829 million in venture funding. According to data from CB Insights, in 2017 the number of unicorns in Utah put the state behind only California, Massachusetts, and New York.

Unsurprisingly, most of these companies are also headed by a young, white, Mormon guy. Most of these founders have gone through what amounts to perhaps the most strenuous sales "boot camp" in the world: a two-year mission spreading Mormonism abroad.

Many of these Utah startups share not only interchangeable logos and one-word names (Divvy, Pattern, Bamboo, Nuvi, Jolt, Canopy) but also meat-and-potatoes something-as-a-service platforms with a large addressable market of business customers. The hottest startups do cloud-based visual diagramming software, e-commerce solutions, communication software for medical offices, task management software for fast-food businesses, work management software for enterprise, and benefits management software. Unglamorous, rapidly scalable businesses that play into a theme investors affectionately refer to as "the consumerization of enterprise."

Unsurprisingly, most of these companies are also headed by a young, white, Mormon guy. Utah is 88% white, and members of the Church of Jesus Christ of Latter-day Saints, who self-describe as Mormon or LDS, make up 62% of Utah's 3.2 million population. And Mormonism isn't just a religion — it's a way of life. Mormons are particularly devout: 83% of them say religion is very important in their lives, compared with 56% of the general U.S. population. Like Podium's Rea and Steele, most of these founders have gone through what amounts to perhaps the most strenuous sales "boot camp" in the world: a two-year mission spreading Mormonism abroad. Each year, after a brief period of training, about 53,000 LDS missionaries, mostly young men, go out and proselytize for two years (18 months for women), often living far from home. (As a result, many Utah students take six years, rather than four, to get their bachelor's degree.) Provo-based Vivint Smart Homes, founded in 1999 and acquired by the Blackstone Group in 2012 for more than $2 billion, became one of the most successful door-to-door sales companies anywhere by hiring these returning missionaries to sell home security systems.

"Every single one of us can sell the crap out of anything," says Blake Murray, the Mormon CEO and co-founder of Lehi-based Divvy, which launched its expense management software-as-service platform in January 2018. In April 2019, it raised a $200 million round led by NEA. "Before even a line of code was written, I had built a deck and signed massive corporate agreements with some of the largest banks in the U.S.," says Murray, who served his two-year mission in Santiago, Chile. Instead of attending LDS flagship BYU, he enrolled at the University of Utah. "My way of sticking it to the man," Murray says. (Not really: The University of Utah has produced just as many famous Mormon business figures as BYU, including J. Willard Marriott, Novell founder Ray Noorda, JetBlue founder David Neeleman, former Pixar president Ed Catmull, and Atari creator Nolan Bushnell, now a self-described lapsed Mormon.)

In the past, talent from Utah's schools had to leave the state to find fame and fortune. Now, thanks to an influx of out-of-state capital and the trickle-down effect of several billion-dollar exits, more young Mormon entrepreneurs are deciding to stay right here. Skiers now have to compete with VCs for space on flights into Salt Lake City, where they can scout for a very particular retro brand of founder, combining the ambition of 2020 with the values of the 1950s — competitively groomed and vice-free, with tunnel vision on their business, their family, and the church. Matthew Marsh, a partner in Lehi-based Sorenson Venture Partners, says he spends much of his time these days showing around investors who are only too happy to make the 90-minute flight from the Bay Area, discover their next SaaS unicorn, and have dinner in Salt Lake City before heading home. "They see here what they had a while back — good, sound, fundamental business building," he says. "You get a gritty entrepreneur who's going to buckle down, with a sound path to profitability."

Comments

Popular posts from this blog

Live streaming is new hunting ground for Chinese online fraudsters - South China Morning Post

Top 6 Small Business Ideas for New Entrepreneurs in Philadelphia - The Hack Post

Men’s at-home health startup Vault takes in $30 million from Tiger Capital - TechCrunch