September 17, 2018 | 4 minutes read( 663words)
By: Michael Lilly, Director of Business Development
EGFS has always had a presence in both Seattle and Portland, but due to the very impressive growth of the Pacific Northwest as a startup and tech market, we've decided to expand in both cities. As we grow in 2018 in this area, we've noticed a few things that may be interesting to you if you are familiar with both markets or are interested in expanding here yourself.
Seattle is the fastest growing big city in the US for this decade, and with that comes new opportunities for startups. Seattle has always been a hub for large companies including Microsoft, Amazon, Boeing, Starbucks, Costco, Expedia, Nordstrom and others. The talent pool for startups here is quite strong, particularly as entrepreneurs choose to leave Microsoft, Amazon, and Boeing to develop their own ventures.
The service provider and investor community here is a very close knit group of people that are welcoming to newcomers in the market. However, they tend to significantly value face time. Thus, it can be difficult to do business here as a drop-in from somewhere else. In order to be successful connecting to other service providers and investors in this market, you have to make it known that you have a physical presence in the area. While attending major events and meeting with the community frequently is important anywhere, it appears to be especially important in Seattle.
Regarding the startup environment here, we've found that the majority of our clients here have Founders with strong technical backgrounds. Most of the companies we come across are concentrated in software or B2B SaaS, although we've also seen life sciences, hardware, and e-commerce. Seattle also attracted the most amount of VC dollars this past quarter since the dot com era, which is an exciting prospect for emerging companies here.
Portland is also a fantastic market, and although it is smaller than Seattle, Portland has really valuable companies in their own right. The biggest challenge to companies in Portland (and Seattle to some extent) is the lack of local capital, especially beyond the seed stage. What tends to happen in Portland is that an entrepreneur typically has to look outside of Portland for investment, or they are forced into growing a company organically, and attracting outside investment later. We've noticed that overall, our clients in Portland typically generate revenue much earlier than average for a startup and do a great job managing their overall cash burn.
There's also a shift in Portland towards becoming more of an entrepreneurial city. For the longest time, the overall job market was pretty bleak in Portland. People who had good jobs were risk averse in terms of entrepreneurship because they feared that with a failed startup it would be difficult to re-enter gainful employment. With a growing job market and more companies entering the metro area, this shift is allowing more people to start companies without the fear that if the company fails, they'll be left unemployed for significant amount of time.
As a quick note--being physically present in Portland is even more important than in Seattle. The community there is also really cordial.
Other Important Cities and Places
We don't want people to get the wrong impression that Northwest tech only means Seattle and Portland. In fact, Vancouver is an extremely strong market, but we are US based firm, so we aren't in a position to comment on it. There's also the Oregon markets of Bend and Eugene that are vibrant and up and coming, along with the Washington markets of Olympia/Tacoma and Spokane, which also have lesser known but strong centers for entrepreneurial activity.
Overall, we are very excited about working alongside some great companies and funds in the Northwest.
Questions or Comments? Reach out to EGFS
Follow Us: @EarlyGrowthFS
Why Your Startup Business Structure Is A Loaded Decision
Financial Planning: Essentials For Startups That Mean Business
10 Tips for Building a Strong Sales Culture