Ore­gon’s laid-back an­swer to Sil­i­con Val­ley

▶ Port­land has qui­etly lured star­tups and big com­pany satel­lites ▶ “More and more tal­ent is go­ing to be com­ing here”

Bloomberg Businessweek (North America) - - News - �Peter Ro­bi­son, with Olga Kharif and Wei Lu

In 2013, about a year af­ter he started the prop­erty-man­age­ment soft­ware com­pany Cozy in San Fran­cisco, Chief Ex­ec­u­tive Of­fi­cer Gino Zahnd hired a guy who in­sisted on liv­ing in Port­land, Ore. So Zahnd set up a small of­fice there

and, in the in­ter­ests of fair­ness, slowly started let­ting the rest of his em­ploy­ees choose be­tween the two. By 2015, all 18 were in Port­land. In the Bay Area of­fice, Zahnd was the one who fi­nally turned off the lights.

“We’d have peo­ple come up from the San Fran­cisco of­fice to work in Port­land, and they’d just want to stay,” Zahnd says. That’s fine by him: In Port­land, he pays less than one-third of his San Fran­cisco of­fice ex­penses.

Thanks in part to its Port­landia car­i­ca­ture as “the place where young peo­ple go to re­tire,” the Pa­cific Northwest city is draw­ing tal­ented Sil­i­con Val­ley types look­ing for a less crazed pace. It’s also at­tract­ing tech com­pa­nies seek­ing al­ter­na­tives to the Bay Area’s rock­et­ing costs. That in­cludes star­tups as well as big­ger com­pa­nies such as Ebay, Airbnb, and Sales­force.com, which have all opened Port­land-area satel­lites since 2010.

In that time, the tech­nol­ogy work­force in the city’s sur­round­ing Mult­nomah County has grown 82 per­cent, to more than 13,000, com­pared with a 29 per­cent gain na­tion­wide in the same pe­riod, ac­cord­ing to mar­ket re­searcher EMSI.

“It’s a place that peo­ple want to be,” says Greg Mur­phy, vice pres­i­dent of busi­ness op­er­a­tions at Aruba Net­works, a unit of Hewlett Packard En­ter­prise. Aruba got an of­fice in Port­land with the 2013 ac­qui­si­tion of an in­door map­ping com­pany that had 14 em­ploy­ees. To­day it has 100 there, 25 more than planned, partly be­cause so many peo­ple asked to trans­fer from Aruba’s head­quar­ters in Sunnyvale, Calif. “I feel very jeal­ous,” Mur­phy says.

Marc Heedt, who used to work in sales at Twit­ter in San Fran­cisco, traded a 90-minute com­mute for a 30-minute one in Jan­uary af­ter mov­ing to Port­land to work for mo­bile de­vel­oper Ur­ban Air­ship. He and his wife were able to buy a house more than twice the size of their 1,100-square-foot condo in Oak­land—a pri­or­ity as the cou­ple’s twins neared their first birth­day. “The Bay Area is a re­ally great place when you are sin­gle or a cou­ple, but not when you have kids,” says Heedt, 37. “More and more tal­ent is go­ing to be com­ing here.”

For em­ploy­ers, Port­land is a lot cheaper than other Pa­cific time zone tech hubs. While rental va­can­cies are low and Zil­low es­ti­mates that home prices rose 16 per­cent last year, of­fice square footage runs below $21, one-fifth the cost of San Fran­cisco’s, ac­cord­ing to on­line real es­tate mar­ket­place Loop­net. Work­ers in the sci­ence, tech­nol­ogy, en­gi­neer­ing, and math­e­mat­ics (STEM) fields pulled in me­dian an­nual salaries of $78,150 in 2014, vs. $106,180 in San Fran­cisco, ac­cord­ing to data com­piled by Bloomberg.

Among the fac­tors lim­it­ing in­dus­try growth, Port­land doesn’t have the top en­gi­neer­ing univer­si­ties and in­vestor net­works of San Fran­cisco or even Seat­tle. The last ini­tial pub­lic of­fer­ing of a Port­land tech startup was more than a decade ago. Demo­cratic Ore­gon Gov­er­nor Kate Brown says her state is mak­ing strides, hav­ing dou­bled spend­ing on STEM pro­grams for stu­dents to $35 mil­lion last year. Pup­pet Labs, which makes data-cen­ter man­age­ment soft­ware, says it’s talk­ing to un­der­writ­ers about a 2017 IPO.

Not ev­ery­one is psyched about the pa­rade of trans­plants—a smat­ter­ing of for-sale signs around Port­land are plas­tered with stickers that di­rect Cal­i­for­ni­ans else­where. But most Ore­go­ni­ans re­mem­ber the bad old days af­ter the tim­ber in­dus­try col­lapsed, so no­body’s com­plain­ing that loud. “We’re only at the tip of the ice­berg,” says Brown, seated at a con­fer­ence ta­ble hewed from na­tive hard­woods in the down­town Port­land of­fice of the state’s eco­nomic de­vel­op­ment agency. A video loop­ing in the lobby shows happy new­com­ers to “Techtown Port­land” en­joy­ing coffee and rid­ing on MAX, the city’s light-rail sys­tem. Port­land has a his­tory of draw­ing young peo­ple who “maybe” find jobs, Brown says. For now, it draws both.

The bot­tom line The tech­nol­ogy work­force in Port­land’s Mult­nomah County has grown 82 per­cent, to more than 13,000, since 2010.

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