Idaho entrepreneurial community looks to leverage national attention for 2020

Idaho is no stranger to national “best-of” lists, but in 2019 it hit a new threshold with a pair of articles in Inc. magazine, according to leaders in the state’s entrepreneurial community.

Now, it’s a matter of leveraging that attention to go further in 2020.

“The Inc. articles are different. These articles didn’t lazily focus on our short commute times, or inexpensive (although rising) housing, access to skiing and the outdoors,” wrote Nick Crabbs, co-organizer of Boise Startup Week, in a LinkedIn post. “No, they focused on the people, innovators and creators. And that’s the point. That’s new for us.”

The problem with emphasizing such factors is that it will attract only people looking at those factors, Crabbs said.

“Innovation hubs don’t exist because of the ability to go skiing or cheap housing,” he said. “They exist because innovators want to be around other innovators building interesting things.”

What Idaho needs to do is focus on innovator stories, such as Lumineye, which traveled to Silicon Valley this summer to attend the Y Combinator summer startup class — and then came back to Idaho, said Tiam Rastegar, executive director of Trailhead, a Boise-based coworking space dedicated to the entrepreneurial community.

“It’s showing that we’re not just a town that has cheap housing and a low cost of living,” Rastegar said. “We do, and that’s great, but we can move the needle for business and small business. We’ll see more of it next year.”

Trailhead is planning to start a publication promoting such stories, he added.

Government funding

Some are suggesting that Idaho, or Boise, could become more of a technology hub through government investment on either the state or federal level. Neighboring states such as Washington and Utah have state-sponsored funds of hundreds of millions of dollars to encourage development of technology companies in those regions.

“The amount is not important, but it’s a vehicle for startup growth,” Rastegar said.

Stakeholders in the technology community have started brainstorming about how to create a similar effort here, he said.

On a national level, the Brookings Institution, in partnership with the Information Technology and Innovation Foundation in Washington, is encouraging the federal government to create a fund to help develop technology hubs outside of the coasts, and Boise is on the list.

“It’s not in the absolute top echelon, but it’s one of 35 or so places we thought looked very promising for tech growth,” said Mark Muro, senior fellow with the Metropolitan Policy Program at Brookings, in Washington, D.C.

The proposal calls for cities like Boise to compete for up to $1 billion each per year for 10 years to jumpstart investment in education, workforce training and placemaking.

“It would give a city the resources to pursue its boldest ideas,” Muro said.

Big exit

What Idaho’s entrepreneurial community really needs in 2020 is another big exit, like that of Truckstop.com in 2019 and TSheets in 2018, said Kevin Learned, a partner with the Sage Growth Capital revenue-based investment fund and a long-time member of Boise’s angel community.

“We need continuing exits of successful companies, because when that happens, it frees up capital,” he said. That could be either a sale, as with those two companies, or an initial public offering (IPO), he said.

Learned’s candidate for the big exit of 2020 is Cradlepoint, a Boise-based technology company that makes wide-area networking and 5G hardware and software, and which has been discussed as an IPO candidate since at least 2015. The company has received millions of dollars in several rounds of investment, including from the Boise Angel Alliance. Most recently, it received $89 million from TCV, a technology investment group that has been involved with the IPOs of a number of other companies. Cradlepoint has also partnered with Sonim Technologies, which went public earlier in 2019.

“Sooner or later, we expect that Cradlepoint will have an exit event,” Learned said. “That’ll free up a lot of capital that’s been tied up for a number of years in that company. Then it starts sloshing around, looking for new places to invest.”