How Denver Became an Unexpected Startup Mecca
DENVER — Three years ago, Jacqueline Ros took to Kickstarter with an ambitious idea: tackle sexual assault on college campuses.
Ros, who lives in Denver, says she was inspired to tackle the issue after the wrenching experience of witnessing her sister get attacked twice before the age of 17.
"My sister's experience was the straw that broke the camel's back," Ros told Mic. "I decided this is what I'm going to commit my life to."
Ros teamed up with co-founders Megan Espeland and Andrea Perdomo to launch Revolar, an innovative technology startup based in Denver that aims to become the "global leader in personal security." The company has created a wearable device that allows users who are in danger to press a button sending an emergency alert with location information to loved ones.
"Many people in these situations are afraid to cry wolf, but their instincts are telling them that something's wrong and they want to get out," Ros told Mic. "We want to give them an easy way to get out of a bad situation."
It all sounds like your typical, rapidly growing and fast-paced technology startup. That is, until you hear how the company operates.
Not your typical startup: Revolar is a far cry from the stereotype of a Silicon Valley startup, where burnout culture is pervasive and employees hack away through all hours of the night. Instead, the company's founders describe an office culture rooted in health and wellness.
"We're big believers that if you don't wake up on the right side of the bed, you shouldn't try to sell anything, and in a startup, you're selling something every day," Ros told Mic.
For Ros, that means giving her staff generous personal time to do yoga, get a massage or even head to the mountains to go skiing for the day.
The company holds a weekly company meeting, in which employees set their own personal goals, along with a collective company goal like "everybody needs to do one healthy thing for themselves," Espeland told Mic. "At the end of the week, we hold people accountable."
Revolar might seem unique, but talk to any entrepreneur here in Denver and they'll describe a similar phenomenon. Meetings over hikes? Check. Phone calls while skiing? Totally.
"There's largely a rejection of burnout culture here in Colorado," Espeland told Mic. "When you go to the coasts, you often see people working 20 hours a day and sleeping in their offices. Here, we value not doing that, and we believe that actually makes us move faster."
This environment is one of the reasons why Denver has quietly become one of the fastest-growing startup meccas in the United States. In 2015, Denver startups attracted more than $822 million in venture capital funding, with companies in the technology, energy, food and marijuana sectors leading the way. The city also routinely ranks as one of the best cities to live as a millennial, and young people from across America are flocking to the state in record numbers to build Denver-based business.
Perhaps the most remarkable part of the Denver success story is that much of the city's growth has taken place in only the past five years.
The backstory: Colorado has a long and storied history of entrepreneurship, but the turning point came in 2006, when four passionate entrepreneurs, Jared Polis, Brad Feld, David Cohen and David Brown, created Techstars in nearby Boulder, now one of the premier accelerators in the world.
"Colorado had always had an entrepreneurial spirit, but we never had the infrastructure to start startups," Polis, who now represents Colorado in the House of Representatives, told Mic.
The premise behind Techstars, says Polis, was to create a "positive ecosystem" for founders by providing them with a short-term, intensive training program and also connecting them to resources within the Colorado startup community. At the time, there were various small startup hubs operating in and around Denver — including Fort Collins, Boulder and Colorado Springs — and Techstars was pivotal in bringing them together.
"On a relative basis (compared to the rest of the U.S.), there was a healthy startup scene in Colorado in 2006," Feld, who authored a book about Colorado's startup rise, told Mic. "But it wasn't well-connected. There were lots of talented entrepreneurs, some who had been in Boulder for a long time, but there weren't many focal points of energy around startups."
Techstars also removed the stigma around entrepreneurship as a career path, particularly for millennials. "Entrepreneurship is no longer a 'special' or 'weird' thing," Feld told Mic. "It has become mainstream, especially among the next generation of young adults."
The influence of Colorado's government: Techstars was the driver of Denver's rise, but government policy has also played a pivotal role.
Denver Mayor Michael Hancock says startups are one of his top priorities. "I want Denver to be seen as the startup and small business capital of the nation," Hancock told Mic.
Similarly, Colorado Governor John Hickenlooper, himself a successful entrepreneur before entering politics, has also made startups a central focus. He recently launched a Colorado Innovation Network (COIN), which aims to connect the 29 different research laboratories in Colorado with entrepreneurs from across the state.
"The idea is to take innovation and new ideas and accelerate them, in order to increase jobs," Hickenlooper told Mic.
On the policy side, Hickenlooper has made a concerted effort to enact favorable tax policies for entrepreneurs, while also removing the bureaucratic red tape typically associated with starting businesses.
"When I became governor, we went to all 64 counties across the state, and we asked them, 'What do you need?'" Hickenlooper told Mic. "We got the same answer from all over the state: less red tape. So we are going through every single regulation and getting rid of everything that we can."
Perhaps the biggest point of emphasis for Hickenlooper and Hancock, however, has been attracting millennials to Colorado by making Denver a vibrant, livable city.
"We needed to really understand what things people are looking for when they choose a city to live in," Hancock told Mic. "And that is being able to live in a house that they can afford, being safe in their city and being able to access the mountains. It is also about the vibrancy [of the city] and the after-hours entertainment."
Hickenlooper, who founded the Wynkoop Brewing Company in downtown Denver before getting elected mayor of Denver in 2003, has been deliberate in his approach to building up Denver as a millennial hub, dating back to his days as an entrepreneur.
"Today, we're harvesting the work that was done 10 or 15 years ago," Hickenlooper told Mic. "Back when I opened my restaurant, we decided that we wanted to make Denver a walkable city and a city that had density and nightlife."
Hickenlooper made conscious city-planning choices that have served to benefit young professionals. "We were very careful not to have a nightclub district, because we thought these end up becoming pretty dangerous places, and it would be very hard to create a residential community alongside that," Hickenlooper told Mic. "In addition, we built our baseball stadium, football stadium and basketball arena all downtown. We wanted things centralized."
"We decided we were going to really focus on young people," Hickenlooper told Mic. "So, bike paths. Music. Culture. Outdoor recreation. That really got the millennials here."
Millennials are flocking to Colorado: The numbers show overwhelmingly that Hickenlooper's efforts are working.
From 2010 through 2014, the Denver metro area attracted more than 100,000 out-of-state residents, the fifth-largest influx in the country. Colorado millennials also now outnumber Baby Boomers for the first time in the state's history. Denver-based entrepreneurs are now creating startups left and right.
"Fifteen years ago, we couldn't get coastal investors to come here to Denver," Chris Onan, co-founder and CFO of Galvanize, a tech campus and startup hub in the heart of Denver, told Mic. "There has been a wildly noticeable shift in the last five years."
One of the companies that has benefitted from Denver's soaring growth is Layer3 TV, which describes itself as a "next-generation cable operator" and has raised over $80 million in funding to date. The company, which was named by Forbes as one of the hottest companies of 2015, has around 100 employees and recently relocated its headquarters from Boston to the bustling LoDo district of downtown Denver, after receiving almost $3 million in lucrative tax incentives from Colorado's government to incentivize the creation of 312 new full-time jobs.
"We have had great support from the state of Colorado to bring us here and to help us find great people," Eric Kuhn, Layer3 TV's head of marketing, told Mic.
Kuhn says whatever fears employees may have had in relocating disappeared when they experienced Denver's charm first-hand. "Everyone loves working here," Kuhn told Mic. "The public transportation is great. We have amazing restaurants. We have a great performing arts center. We're a short drive away from some of the world's best skiing. All these things come together and are attracting so many people to come here."
Kuhn, who has worked in New York City, Washington, D.C., and Los Angeles, says what makes Denver particularly unique is the city's collective emphasis on work-life balance.
"The city is amazing for millennials because of that work-life balance," Kuhn told Mic. "For our generation, work can be all encompassing. So why not have it be all-encompassing, but in a beautiful location, with great outdoor sports and excellent music and culture."
Another unique draw that Denver entrepreneurs tout is the city's tight-knit community, which founders say, make it easier to score meetings with prominent venture capitalists, advisors, or other entrepreneurs. "In New York, it's all about connections and who you know," Lianne Haug, CTO of Pana, which describes itself as a "virtual travel agent," told Mic. "By contrast, people here are willing to help you without getting something first."
"Boulder and Denver have a beautiful, magical community that, in part, exists because of Techstars and Foundry Group," Haug added. "The community is what is so unique to this area, when compared to San Francisco or New York."
Dara Segal, founder of Simply Framed, a company that makes custom and affordable frames catering to art and home-decor lovers, also says one of Denver's biggest draws is its residents' welcoming spirit.
"There are a lot of big players here, but it's still starting up," Segal told Mic. "You have a network of people who are warm and interested in helping each other. People will respond to you, and you can definitely get a meeting. Because the city is smaller, it is easier to find like-minded entrepreneurs and build your network."
Female and minority entrepreneurs enjoying more success: One positive, if perhaps unintentional, benefit of the city's open culture is female and minority entrepreneurs seem to be thriving here, less plagued by the diversity issues that tend to manifest themselves in the Silicon Valley and New York City. Denver was recently declared the best place in the United States to start a company as a female founder.
One person who has actively supported Denver's female entrepreneurs is Sue Heilbronner, who is the CEO and co-founder of MergeLane, a startup accelerator program that specifically invests in female-led companies.
"Women are less likely to apply for things when they're not sure they meet all the criteria," Heilbronner told Mic. "We had a theory that women were just not applying as much to accelerators, so we've actively reached out to 1,300 companies that have at least one female in leadership."
Heilbronner says MergeLane has enjoyed tremendous success since she started the company five years ago, a fact she attributes to Denver's culture of openness. "One of the ways bias ends up getting perpetuated is when networks are extremely tight," Heilbronner told Mic. "If networks are porous and open, all sorts of people who don't look like the people who typically run networks show up. I think that's really what we're seeing here. An open community definitely favors women."
Heilbronner also says she has enjoyed widespread support from Denver's startup community, starting at the very top. "I think both men and women in this community are open to being in this dialogue," Heilbronner told Mic.
Colorado's elected officials have made a deliberate effort to support female and minority entrepreneurs. "We are making a deliberate effort at all stages to have greater diversity among founders and recruit founders of all backgrounds," Congressman Polis told Mic.
Governor Hickenlooper, too, says diversity has been his core focus since he served as mayor of Denver. "We made a big effort to have full diversity and make up some of the disparity that's been here," Hickenlooper told Mic. "I think 48% of my appointees were people of color, and 62% were women. In every case, we can say we always hired the best person for the job. We never sacrificed excellence for diversity."
Denver Mayor Hancock, who is himself African-American, echoed that sentiment. "If minorities and women are successful, we're all successful," Hancock told Mic. "Denver, in its DNA, has always been an open and accepting community in terms of minority and women business."
"Denver, in its DNA, has always been an open and accepting community in terms of minority and women business." — Mayor Michael Hancock
Where Colorado goes from here: It may sound like a startup utopia today, but as word of the Denver's appeal spreads, some entrepreneurs worry that Denver could start to lose its tight-knit, community feel.
In fact, Hickenlooper is already planning an aggressive marketing campaign that will seek to paint Denver as a place for entrepreneurs to set up shop. "We're going to focus on making this the greatest place in the country for entrepreneurs," Hickenlooper told Mic. "You're going to start seeing skiing ads, and other things like that in certain markets, that say, 'Come out here and have a great vacation, and you also might want to start a business.'"
It remains to be seen whether the unique characteristics that have distinguished Denver's startup community will change in turn. "Denver isn't a flyover city anymore," Onan told Mic. "We can get venture investors, corporate executives and media who never would have come to Denver 15 years ago."
"I think it is already changing. There's no doubt that as we continue to have success, we'll probably lose a little bit of that 'Hey, everyone should probably help someone and make time' feeling. That's just a natural thing," Onan said.
But while Denver is certain to change, Kuhn is confident it will retain its millennial appeal. "It's going to change," Kuhn told Mic. "Two years from now, it is going to look a lot different. But that's what millennials are all about, constant change. This place is still going to have that cool and friendly feel."
And despite his reservations about how the city will continue to evolve, Onan has absolutely no plans of jumping ship anytime soon.
"I don't like to use the word 'never,' but I'm never going to leave here," Onan told Mic.