Portland, Ore., Campaigns to Boost Startups

Portland, Oregon

A competition known as the Startup PDX Challenge has created a buzz in Portland’s tech community as the city aims to energize its startup scene. Created by the Portland Development Commission, the challenge offered winners free furnished office space for a year, a $10,000 stipend and free legal, accounting and other services.

From 240 applicants, six companies were named winners: ClutchPlay Games, whose four employees enjoy working in the same room after toiling in their respective homes; CoPatient, which scrutinizes medical bills for errors and overcharges; Safi Water Technology, which is developing a bicycle-powered water treatment system for the developing world; Walker Tracker, which creates custom programs to encourage walking; OnTheGo Platforms, which builds apps for Google Glass. Alum.ni Inc., which creates programs to track alumni (and later moved to the Bay Area), was replaced by Seamus Golf, which makes hand-crafted woolen golf accessories.

New Life to a Neighborhood

In addition to encouraging startups, the effort was an attempt to revitalize a former factory in an industrial zone known as Produce Row, according to Jeff Martens, co-founder and CEO of CPUsage. (His company already had office space, and so didn’t enter the competition.) It also created some excitement among very early stage companies, though the city’s traditional tech hub has been the Pearl District, where former warehouses have been refashioned with trendy boutiques and restaurants.

Increasingly, cities are stepping up their efforts to boost startups and create jobs – and it doesn’t hurt if they can spiff up some less-than-desirable areas in the process. In exchange for a a payroll tax exemption with San Francisco, for example, Twitter in 2011 signed up to lease 210,000 square feet of space as part of the city’s effort to revive the Mid-Market neighborhood. It’s now reportedly in advanced talks to boost its footprint there to about 600,000 square feet.

Tech hubs generally grow out of local universities – Chicago’s counting on that with more than a half-dozen idea factories set to open there in the next few years associated with the University of Chicago. Portland, a metropolitan area of 2.2 million people, however, lacks a major STEM research school on par with Stanford or those feeding the Research Triangle of North Carolina.

Attracting Investment

However, Oregon’s Employment Department recently reported that the tech industry is leading Oregon out of the recession by adding jobs faster than the overall economy. It’s also paying more than twice the state average. Tech salaries average $94,000 a year, compared with the overall Oregon paycheck of $44,300.

Although Intel’s massive presence there leads the way, Oregon startups raised $86.1 million in the first half of 2013, the strongest start to the year since 2007. Puppet Labs raised $30 million and Urban Airship raised $25 million in the first quarter, though not from local investors.

Established companies are setting up outposts there, too, most recently including eBay’s mobile team, Salesforce.com and application performance-monitoring firm New Relic.

Still, Martens — who says he loves Portland — finds himself looking to Silicon Valley for funding and customers. “Portland is startup friendly, but the area where we’re lacking is capital,” he told Dice News. “It’s not too hard to find four or five $50,000 investments in Portland, but if you need to go bigger than that, that’s where it gets a little challenging…. I think that’s because we haven’t had a lot of exits yet. We just need a new crop.”

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