A Tech Boom Is Coming For Utah
Michelle Rial / BuzzFeed News
A troop of giddy engineers is barreling out of Instructure's headquarters and onto a parking deck roof, paper planes in hand. It's a very hot Friday afternoon in a very suburban office park, and the engineering team has organized a paper plane throwing competition. These are computer developers, not mechanical engineers — Instructure sells educational software — but they are nonetheless quite excited about the game, spilling over each other on the way out the door like schoolkids en route to recess.
Meanwhile, down in a bright orange kitchen, the slightly more subdued sales team is playing a round of cornhole surrounded by the culinary bounty of your typical tech startup — jars of peanut butter, loaves of grocery store white bread, a box of Slim Jims, cases of ramen.
Instructure, which is eight years old and valued at more than half a billion dollars, makes a show of embracing the kind of performatively zany workplace culture that has become as emblematic of Silicon Valley as BlackBerry phones and wheelbarrows of cocaine once were of Wall Street. From a conference room on the seventh floor, Senior Vice President of People and Places Jeff Weber can see the paper plane competition, and, below the aviators' feet, a large black scorch mark on the parking lot floor. Weber says it was left there during the office's ribbon-cutting ceremony, which was conducted by a panda holding a flamethrower.
The panda turned out to be Instructure CEO Josh Coates. The flamethrower turned out to be more powerful than expected.
Via youtube.com
Weber's office is not in Silicon Valley. It's not even in California. Instructure, along with over 5,000 other tech companies, is located in Utah. Specifically, it's in a corporate park in Cottonwood Heights, a northwest neighborhood of Salt Lake City — when Coates nearly lit his staff on fire with a flamethrower, he didn't do it amid the low-lying scrubland of Santa Clara or Palo Alto, but against the backdrop of the regal Wasatch Mountains. But sitting in a massive conference room talking about open floor plans, a war for developer talent, and the benefits of offering unlimited vacation days, it's easy to believe Weber when he looks you in the eye and says, "Utah and San Francisco are more similar than people realize."
Indeed, Utah — once a home home for religious pioneers, perpetually the seat of a sort of conservative wholesomeness in the popular imagination — is changing fast.
In 2014, Thumbtack — a consumer-facing home services company that recently became one of San Francisco's newest unicorns, or companies valued at over one billion dollars — moved its customer support center to Sandy, Utah, almost 800 miles away from the company's SoMa headquarters; Jet.com, eBay, Adobe, and Netflix have all recently opened sales offices in Utah. At Church & State, a former Central Christian Church turned co-working space and incubator in Salt Lake City, would-be entrepreneurs dream up ideas, and at StartFest, a statewide startup competition, they pitch them in hopes of winning a chunk of the $150,000 prize money. On a warm afternoon, the office of Qualtrics, an research software unicorn founded in 2002, looked like a somehow even more collegiate, less foggy simulacrum of San Francisco: Coders worked on treadmills, clacked their keyboards in massage chairs, and raided a company kitchen — one of many — dedicated only to desserts.
When it opens this fall, the Lassonde Entrepreneur Institute at the University of Utah will be part home and part co-working space to a very lucky group of freshmen, with dormitory floors organized by themes like gaming and digital media. Most of the building, which is designed to look like a garage, is open to these young entrepreneurs 24 hours a day. A single street in Provo is now home to not one but three billion-dollar tech companies; though the road's official name is N 300 W, some have taken to affectionately calling it Unicorn Lane.
Utah's venture capital rounds are getting bigger, and more aggressive. The competition for talent has increased, putting pressure on salaries. The state is increasingly drawing cash from out of state, both in terms of tech workers moving in and financiers closing deals. New office buildings are popping up all over the place. Utahn entrepreneurs, long known for enterprise tech companies, are increasingly considering consumer plays. Meanwhile, the startup ecosystem that feeds off of all of this is bubbling with activity.
But Utah is — obviously, inherently, sometimes emphatically — not San Francisco. As the home state of the Church of Latter-day Saints, Utah's population is roughly 60% Mormon, compared with less than 2% of the national population. Mormons, as a rule, don't drink alcohol, and as a result, Utahns consume less alcohol per capita than any other state. Less than a third of Utahns reported having a drink over a 30-day period in 2014, according to a study conducted by the Utah Department of Health. At a bar in Utah, it's not possible to buy a draft beer with an ABV higher than 4%; major manufacturers like Pabst brew special low-alcohol-content versions of their brews to sell in the state. Many of the state's young men leave for two years at a time to go on missions, often abroad, and many of them have children young. As of last summer, fully half of Utahns were still "strongly opposed" to marriage equality, an issue that Silicon Valley leaders such as Apple CEO Tim Cook and Facebook CEO Mark Zuckerberg have come out strongly in favor of.
Troy D'Ambrosio describes plans for the Lassonde Entrepreneur Institute in his office on the University of Utah campus.
Caroline O'Donovan / BuzzFeed News
Tech may never overtake Mormonism as the culture Utah is known for. But it's a swiftly growing industry in the state, and both the perks and the drawbacks are beginning to rear their heads in Provo office parks and Salt Lake City startup incubators. Executives say that Utah is about 10 years behind Silicon Valley, and they're working like mad to catch up. But the scene Utah's modeling itself after has some decidedly un-Utahn values. In chasing after California's eye-popping valuations and thriving tech scene, the Beehive State is also at risk of importing the sometimes greedy, homogeneous, exclusive, and work-obsessed culture Silicon Valley has become known for. With rents on the rise, its own brand of tech bro, and growing concerns over the state's changing way of life, maybe it already has.
If you head north out of Salt Lake City on I-15 for about an hour, you'll reach a fork at Canyon Road. Turn east and the road will narrow and steepen as it curves through the mountains. When the roadside pioneer-themed knick-knack stores thin out and you see signs warning cars of falling rocks, you'll know you are in Eden.
An array of snacks and cornhole players at the Instructure headquarters in Cottonwood Heights, Utah.
Caroline O'Donovan / BuzzFeed News
This is is not the first Mormon Eden. That one, better known as Adam-ondi-Ahman to followers of the faith, is located in what is now northern Missouri. The original Mormon pioneers ended up fleeing Adam-ondi-Ahman during what is sometimes called the 1838 Mormon War; today, hundreds of families visit Adam-ondi-Ahman every year.
Fewer visit Eden, Utah, which has, until recently, been a quiet, pastoral town with just 600 residents and a reservoir ringed by snowcapped mountains — most notably Powder Mountain. But that, like so much in Utah, is changing.
On a warm day, close to the top of Powder Mountain, a man is sitting at a picnic table, a thin band of plastic wrapped around his forehead. The table is attached to a wooden deck, and the deck is attached to a very handsome yurt. The man is alone, silent, with his eyes closed, wearing headphones; the plastic band is a "personal meditation device" called Muse. Muse, which retails for $249, helps people focus by measuring brain activity and playing auditory cues when the user is distracted: gamified relaxation. Below, on the scrubby brown-green slopes, visitors from New York and L.A. are trying their hands at archery. Nearby, a guru is holding a sack of what I'm told are magic mushrooms.
The yurt belongs to Summit, a group of Silicon Valley-ish wealthy tastemakers who have been putting on the Summit Series — a series of lavish salons for the millionaire set — since 2008. The organization has hosted events on the mountain, as well as on an island; last fall, Uber founder Travis Kalanick attended one on a boat, along with Eric Schmidt, John Legend, and Martha Stewart.
Summit bought Powder Mountain in 2013, with plans to turn it into a ski resort and modern community for the forward-thinking, a permanent home outside Silicon Valley for its community of futurists, financiers, athletes, artists, and other would-be trendsetters to rub elbows all year round. The plan, Summit co-founder and CEO Elliott Bisnow says, includes modernist, Ex Machina–esque homes for the billionaires (Summit's backers include Ray Kurzweil and Peter Thiel) but also cheaper hostels for the artsy set.
The Muse was demonstrated during one of Summit's so-called content sessions, a sort of a dry run for what the village will look like, as well as an opportunity for friends of Summit and friends of their friends to think about making a permanent financial commitment to the community. Ariel Garten, co-founder of Muse, was in attendance. On a shuttle ride from the peak down to the lake house, where antipasti and wine were being served lakeside, a San Francisco venture capitalist interested in the space offered to buy one of the Muse devices. He hadn't used it yet, he said, but he was excited to try, because the meditation tech he had at home didn't work quite right. Garten seemed pleased.
Maybe it's the wide-open skies, or the harsh beauty of the landscape, but there's something in Utah that seems to draw people who want to live differently. Summit hopes to create on Powder Mountain an accessible yet exclusive paradise for like-minded people to live and work communally, in beautiful surrounds, with plenty of good food. And when the first Mormons arrived in Utah in 1847, after 17 months of travel and years of persecution, they saw in the Great Salt Lake Valley an opportunity to invent a new way of living together. But as their flight from Eden suggests, it's not easy to build a new way of life without making enemies.
Anyone driving the steep and winding road to Powder Mountain last summer would have noticed signs reading "Summit Sucks Water" plastered all over porches and front lawns. There is no running water at the top of Powder Mountain, and Summit's efforts to change that have led to concerns about whether the aquatic diversion they had planned would adversely impact Eden's original residents. It's the kind of problem many real estate developers face, but Summit wants to be seen as so much more than that. To that end, they've hosted communal dinners for their new neighbors, and even hired an intern from a local college who has family living in town. But, nonetheless, the conflict has slowed construction and, according to one observer, even hurt Summit's sales.
Summit will likely succeed in the end. But the rift between the residents of North Fork Utah and the wealthy weekenders traipsing over their pristine mountainside is a microcosm of a similar (if slightly less colorful) drama unfolding throughout the rest of the state.
There are many reasons why tech is bubbling up in this particular place, at this particular moment in time. Office space is cheap in Utah relative to San Francisco, for one, and the weather's nice enough to entice outdoorsy types who might otherwise make their homes in Northern California. But almost everyone will tell you that Utah's real secret weapon is its people.
Indeed, ask the leaders of Utah's tech scene about the benefits and drawbacks of their particular labor pool, and they'll respond with the discomfiting bluntness that only an in-group observer can offer: "They don't show up hungover," says Dave Elkington, a Mormon himself and CEO of InsideSales, a company that makes an intelligent tool for business-to-business sales. InsideSales is yet another Utah unicorn, this one also located in Provo, which is 89% Mormon and the home of Brigham Young University.
Workers at the Qualtrics office in Provo, Utah.
Caroline O'Donovan / BuzzFeed News
"They're more loyal, on average," says Gavin Christensen, founder of Kickstart Seed Fund and a member of the LDS Church. "Big generalization, but the perception is they're more loyal." Christensen's fund is located on what he calls Utah's Sand Hill Road in a comparison to the Menlo Park street that's home to Silicon Valley's biggest venture funds. Christensen also suggested that Mormons are more industrious and hardworking. "BYU wins most sober school every year by a landslide. You go to BYU, and it's intense. Nobody smokes, nobody drinks, nobody parties," he says. "People grow up fast. They get married and have responsibilities." Christensen sees a through line between what the challenges of Mormonism teach young people — "determination and grit" — and the qualities a good startup founder need. "That's a lot of what entrepreneurship is," Christensen says.
Every year, around 22,000 students receive a Bachelor's degree in Utah: Brigham Young University alone has more than 25,000 undergraduates enrolled, 99% of whom are Mormon. What makes Utah graduates unique is that most of them are looking to stay in Utah; or, if they are drawn to the coastal financial hubs, they eventually plan to return. Silicon Valley venture capitalist Ryan Sweeney says its ability to "retain homegrown talent" is just one reason Utah is such an appealing tech ecosystem for investment.
But before local job searches, the majority of the LDS students go on a mission — a two-year trip during which they spend every single day going door to door trying to convince people to talk to them about becoming Mormon. Christensen described the mission as a difficult couple of years in which "you face a ton of rejection."
"After I served my mission in Norway," he says, "everything else I've done in life is pretty easy."
"If you can sell religion door to door, you can sell alarm systems or software or solar panels."
And — as more than one person in Utah says with a hint of pride — selling religion may not be all that different from selling software.
"People know how to sell in Utah," says Elkington. "We have the same engineers as everywhere. The Valley will attract a more diverse and educated engineering workforce. But I think you'd be hard-pressed to find a more talented sales community anywhere else in the world." Many speak a second language, making them attractive employees not only for the many call centers that dot Utah's corporate landscape, but also for the tech companies that need strong sales teams to push growth and bring in revenue. When it comes to tech, Utah is known not for producing the next hot app or the biggest social media platforms, but for companies like Domo, a business intelligence company, and Vivint, a smart home and security company. "If you can sell religion door to door," says Elkington, "You can sell alarm systems or software or solar panels."
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