Fortune Magazine: Here's Why Utah Is a Magnet for Tech Startups
The secrets of the “Silicon Slopes.”
Qualtrics, a “customer-service experience management” company that specializes in gathering customer feedback through online surveys, is a big deal in Provo, Utah. It now employs 1,200 people, claims 65% of the Fortune 500 as customers, and enjoys a valuation of more than $1 billion, earning it “unicorn” status. (You can read more about Qualtrics in this feature from Fortune magazine’s 40 Under 40 issue.)
But Qualtrics isn’t the only unicorn in Utah—in fact, it’s not even the biggest one in Provo. That honor goes to predictive analytics firm InsideSales.com. Indeed, there are four $1-billion-plus tech startups in the state, and at least two other firms that hit that threshold before being acquired by private equity. All of which raises the question: What makes Utah’s “Silicon Slopes” such fertile ground for successful startups?
It starts with a strong local talent pipeline. The main campus of Brigham Young University is in Provo, and the University of Utah is 45 miles away in Salt Lake City. Both churn out plenty of job candidates, many of them with family ties that make them eager to stay in the state. Qualtrics’s co-founders have strong BYU connections: CEO and co-founder Ryan Smith, who ranks at number 12 onthis year’s Fortune 40 Under 40 list, was a business student there until he dropped out to work on Qualtrics full-time. He recently completed his credits for his management bachelor’s degree. (You can read more about Smith here.)
It also helps that real estate is ample and far cheaper than in Silicon Valley. Median home prices in the area are about $300,000, compared with the Valley’s $1.25 million. In August, Qualtrics, moved into a new, 151,000-square-foot headquarters building complete with an indoor basketball court and 1950s-themed ice-cream parlor—a project that could have been prohibitively expensive in, say, Mountain View. But you still get a mountain view: The new headquarters sit right at the foot of the Wasatch Range. Oh, yeah, there’s also a ski resort just 12 minutes away. “It sounds sort of loosey-goosey, but when I first went there and saw those mountains, there was something so inspiring about the physical landscape,” says Kim Scott, a formerGoogle exec who joined Qualtrics’s board this year. “It’s helped them attract some great talent.”
More recently, Smith has been able to recruit from other universities and regions—even from the Bay Area. That hasn’t gone unnoticed in Utah. “He’s pioneering a new way of doing tech outside of Silicon Valley,” Gov. Gary Herbert tells Fortune. “He has been key to expanding these businesses here.”