America’s New Startup Hotbed
Utah Valley Economic Development Partnership
Over the last few years, Utah County has consistently been recognized as among the hottest spots for business in the country. The State of Utah has been recognized several times by publications such as Forbes, CNBC, and 24/7 Wall St. as the best state for business. Moreover, Provo – which holds the county seat for Utah County – has also recently been noted to have the hottest job market and the best career opportunities by CNN and Fortune, respectively.
Located just south of Salt Lake County, Utah County is picturesque, family friendly, and open for business. The county of over half a million people contains the beautiful Utah Valley, with Utah Lake at its center. There are mountains to both the west and the east of the county, with the eastern ranges leading into the world-famous Rocky Mountains. Salt Lake City, the state capital, is just a 45-minute drive from Provo. Together, Provo, Salt Lake City, Park City, and surrounding metropolitan areas are known as the Silicon Slopes – Utah’s answer to California’s Silicon Valley.
Interestingly, many of the businesses active in Silicon Slopes are homegrown and/or headquartered there, such as Qualtrics, Domo, Pluralsight, InsideSales, and more. The tech giant Microsoft has a corporate sales office in the Slopes, and the Fortune 100 technology firm Oracle has several offices there as well – one of which opened in 2014 and spans 46,000 square feet.
On top of all that, Adobe moved to Utah when it acquired Omniture (an Orem, Utah County-based web analytics firm) in 2009 for $1.8 billion and constructed a 280,000 square-foot, LEED Gold-certified campus in Lehi, Utah County in 2012. In early 2018, it was announced that Adobe broke ground on a project for a 160,000 square-foot adjacent facility that is expected to require 1,000 new employees when it opens in two years.
In the venture capital world, startups that experience that level of massive success are likened to mythological beings. “Unicorn business” is a term used to describe those rare startup companies valued at over $1 billion. Interestingly, in Utah Valley specifically and in the Silicon Slopes in general, it isn’t so rare. A year after Adobe built its state-of-the-art facility in Lehi, it was reported that Blackstone (BX) bought a majority stake in Vivint, the Provo-based home security unicorn, for $2 billion.
“There are homegrown entrepreneurs in Utah County like you wouldn’t believe. There are currently five unicorn businesses in Utah. There are only 12 states in the country that have a unicorn, and we have five,” emphasizes Matt Hilburn, Vice President of Research and Marketing at the Economic Development Corporation of Utah (EDCUtah).
As reported by Deseret News, Adobe CEO Shantanu Narayen claimed there was a simple reason behind expanding into Utah after its acquisition of the Omniture unicorn, rather than just moving operations to an existing Adobe facility: “We go to where the talent is. It’s as simple as that.”
Business-friendly policies, an entrepreneurial culture, and the university town ambience have all contributed to making Utah County a ripe place for startups to grow. The Provo-Orem Metropolitan Statistical Area boasts two universities: Brigham Young University (Provo) and Utah Valley University (Orem).
Utah Valley University – as well as the nearby University of Utah in the neighboring Salt Lake City County – is a publicly-funded university, while Brigham Young is a private, non-profit research university. It is owned by the Church of Jesus Christ of Latter-day Saints (LDS), and almost 99 percent of its students are of the Mormon faith (though only about a third of students are from Utah). The university is named after the second president of the LDS Church, Brigham Young, who is also the founder of Salt Lake City – where the Church is headquartered.
The university atmosphere makes the Slopes a desirable location for businesses looking to attract an educated workforce. In particular, Brigham Young University, which is known colloquially as BYU, has a high number of bilingual students due to the LDS missionary program. According to its website, 65 percent of all students at the university have served a mission abroad. Classes are offered in more than 60 languages. Moreover, a whopping 70 percent of the student body is bilingual, due in large part to the missions they serve in other countries. This makes them sought-after candidates for multinationals coming to Utah that are looking for bilingual staff, and it also makes them skillful entrepreneurs as well.
“When BYU students return from missions, they have a lot more experience than you would typically find in university students. They’ve gone door-to-door, they’re good salespeople, and these are the types of people who have started the businesses that are now unicorns,” says Russell Fotheringham, Utah County Head of Economic Development and BYU graduate.
The cultivation of both intellectual and spiritual fortitude has made BYU grads a unique group of professionals. In addition to travelling internationally and learning about other languages and cultures, conducting missions involves dealing with rejection, and builds the resilient character needed for successful entrepreneurship.
Both the Brigham Young and Utah Valley campuses offer postgraduate studies, engineering programs, and arts programs. There is a strong music and arts scene coming from the universities, with Provo-Orem having produced major talents such as Neon Trees and Imagine Dragons. The schools also have nationally respected digital media programs which have contributed to making the artsy, tech-savvy college towns the creative hub that they are today. “It would be very surprising for a lot of people to find out that the top three places for the production of YouTube videos are Los Angeles, California; London, England; and Provo, Utah,” Fotheringham remarks.
The entrepreneurial spirit of the county has also drawn the attention of investors. Utah County has an environment rich in available venture capital. In fact, the amount of venture capital per deal in Utah County is greater than that of Silicon Valley.
“What that means is that those entrepreneurs coming out of these Utah County schools have the ability to turn their company into a unicorn, because available capital is one of the greatest barriers to an entrepreneur’s growth. That is not an issue here in Utah County, especially for a tech company,” adds Fotheringham.
In addition to receiving support from private investors, the government at the state and county levels is also very welcoming to new businesses. Deseret News reported that in July of 2017, the State of Utah’s Governor’s Office of Economic Development approved Adobe for a $25.8 million post-performance tax incentive package for its Utah investment, provided it hits expected targets. EDCUtah is a valued partner of the Governor’s Office, and works to both attract new businesses to Utah and encourage local entrepreneurs that are already active in the state.
For instance, EDCUtah’s Global Strategy and Outreach Team searches the country – and the globe – for businesses that may be a fit for Utah. EDCUtah is a statewide organization that often takes representatives from Utah communities to these meetings, and in doing so, frequently highlights Utah County due to the growth in that region and the special relationship the county shares with EDCUtah.
Fotheringham works with the Business Development Manager at EDCUtah to help companies that want to move to Utah. He also works with each city in Utah County to grow the programs they currently have for entrepreneurs and foster a county-wide entrepreneurial network. “We are trying to make what is a natural strength in Utah County even more of a strength,” he says.
On top of the IT companies flocking to Utah County, the county is interested in promoting the high-tech manufacturing, aerospace, and automotive industries. Hospitals and universities are also among the county’s major employers. Fotheringham tells us that Utah County currently has a number of projects in the pipeline.
But Utah County doesn’t just top the charts when it comes to business opportunities. The county has often been recognized as among America’s best places to live. Outside Magazine mentioned Provo as a top location, considering the number of green spaces, miles of trails, and employment percentages to rank livability. “Candy stores and ice cream parlors outnumber bars, it can be tough to find a coffee or tobacco shop, and traffic regularly stops for runners and cyclists. Welcome to what locals call Happy Valley, a series of communities centered on Provo and Orem,” Outside wrote of the wholesome community.
Indeed, summertime movie nights and concert series replace the typical club-and-bar scene in the art-loving, family-friendly, and youthful county. (Over half the population of Provo is under 30.) There are many places for nature buffs to go hiking, skiing, or mountain biking, and the median price for a house is a reasonable $278,000.
All of these factors make the county a great place to settle down. Fotheringham reveals that many of the people who come for higher education never leave. With the vibrant art and tech scenes, abundant job opportunities, and low cost of living, many students prefer to remain in the county post-graduation and start their families. With all of this growth, it’s expected that by 2065, Utah County’s population will match that of Salt Lake County.
Utah County has experienced significant growth in recent years due to the availability of land in proximity to such a large, educated labor market. This growth will continue for years to come, as much of Utah County is still undeveloped.
But Fotheringham predicts that future developments in the Utah Valley region of the county will be centered on the west side of Utah Lake, opposite Provo-Orem, as that is where the remaining developable land is in Utah County. EDCUtah is preparing for this with transportation planning in order to have the facilities in place for future businesses, a new airport, and a satellite campus for Utah Valley University.
“Utah County has a really bright future,” says Hilburn.