The Great Tech Migration

New startup scenes are lighting up Bozeman, Montana and Burlington, Vermont — because both towns possess the ultimate prerequisite for growth.

GTM

Tech

Tech

April 18, 2023

The Great Tech Migration

New startup scenes are lighting up Bozeman, Montana and Burlington, Vermont — because both towns possess the ultimate prerequisite for growth.

Words by Ben Ryder Howe

Photos courtesy Hula and Beta Technologies

In retrospect, the turning point for Bozeman might have been the summer of 2014, the year Delta Air Lines began direct flights to the city from New York’s LaGuardia Airport. Bozeman at the time had a population of 42,000, a fraction of many U.S. cities with no direct flights to New York. Moreover, at a distance of 2,000 miles from the East Coast, getting there cost a considerable amount of airplane fuel. 

What motivated Delta? Anyone at baggage claim in Bozeman Yellowstone International Airport could see what the airline saw: Dakine ski bags in winter, Orvis fly rods in summer, Patagonia logos and other signs of committed outdoor enthusiasts willing to spend lavishly in pursuit of adventure. 

But there was another option. At the baggage carousel at Burlington International Airport in Vermont, a similar exhibition would have been on display. Burlington and Bozeman are both magnets for discriminating, in-the-know, often moneyed aficionados of pastimes such as blue-ribbon trout fishing, backcountry skiing and the sort of hiking that ends at a bed-and-breakfast serving a memorable saison.

Today, these cities are also home to thriving tech scenes, which have funneled cash into the local economies — for better and worse — and increased their allure as relocation destinations. Their tech scenes aren’t as well known as, say, that of Austin. They don’t have a Dell or even a Texas Instruments. But size can be a problem, too, as Austin, which has become the fastest-growing major metro area in the country, has discovered.

Like Austin, both Bozeman and Burlington have well-respected universities, which urbanists call the sine qua non of great cities (or micro-cities — both Burlington and Bozeman having around 50,000 residents). Burlington, the political hometown of Bernie Sanders and Ben & Jerry’s ice cream, sits an hour’s drive from the Canadian border and hosts the main campus of the University of Vermont, while Bozeman, known for its proximity to Yellowstone National Park, is home to Montana State. Both schools have, among other assets, strong engineering programs — UVM’s particular one being applied physics, while MSU is known for computer science.

“That’s a pipeline for talent,” says Laura Orvidas, CEO of onX, a popular Bozeman-based geolocation app for hunters and outdoor recreators. In fact, both Vermont and Montana are known to recruiters as breeding grounds for high-achieving students, which has in the past led to brain drains in each state. According to Orvidas, those traits are part of a cultural milieu that helped catalyze Bozeman’s economic boom. 

“One thing Montana has going for it is that there didn’t used to be a lot of industry here,” says the former Amazon executive, who came to onX in 2018. As a result, “folks have a very entrepreneurial spirit.” When she moved to Montana, Orvidas noticed that “most people had side hustles, like ‘I'm going to make a cornhole game and sell it on Etsy,’ or ‘I’m making wine glasses.’ People were into starting their own businesses because it was a necessity.”

Richard Morin, a longtime Burlington resident and tech executive, says northern Vermonters have a similar drive. “The joke used to be: Moonlight or die,” says Morin, who directs business development for Resonant Link, a Burlington-based startup making contactless-charging technology. “Everyone had like 12 jobs.”

Morin points out that technology isn’t new to the area. “There’s always been an established tech community people weren’t as aware of,” he says. Burlington may not have had Austin’s Dell or Denver’s Palantir, but it did have a seedbed of future startups in an IBM microchip plant (now owned by GlobalFoundries) in nearby Essex Junction, which at one time employed more than 8,000 people. 

Similarly, Bozeman, starting in the late ’90s, had RightNow Technologies, a software company specializing in customer service. RightNow put Bozeman on the tech map before it was bought by Oracle in 2011, and its founder, Greg Gianforte, became the Republican governor of Montana.

“What [RightNow] meant is there was a bunch of engineering talent that got brought to Bozeman, and those people started other startups or consulting firms, or started to mentor,” says Orvidas. “That’s one reason why onX has an office here, because engineers were here and we were able to get talent.”

Still, neither place had pools of VC money sloshing around, another critical ingredient for tech startups. 

“Montana has had a photonics industry forever, but there was no private capital,” says Liz Marchi, head of community engagement for Two Bear Capital, a Montana-based private investment fund. “So all of their income was from government contracts.” Marchi founded Montana’s first angel investing fund almost 20 years ago, back when Montana had the lowest per-capita venture capital investment in the U.S. She’s seen huge changes, including $87.4 million in series B funding for onX last fall, the largest investment in a tech company in the state’s history.

Still, according to Orvidas, “The capital coming into Montana is pretty low. The seed is there. It just hasn’t sprouted yet.” One thing that would help: better access to fiber-optic cable. Orvidas says she is still waiting for the bandwidth onX engineers need.

Hula is a technology-driven coworking campus, business incubator, and venture capital fund based in Burlington, Vermont.

Meanwhile in Burlington

Economically, Burlington, too, has yet to tap into a digital gusher the way Austin has. But startup financing is catching up to the reality of the area’s potential to build the requisite ecosystem.

“We were number one in the country in 2021 for growth in inflows of venture capital,” says Robert Lair, a Burlington-based venture capitalist. “Granted, that’s coming from a low base. But $1.17 billion is nothing to sneeze at.” 

Lair is co-founder of Hula, a coworking space in a converted oven factory on the shore of Lake Champlain. Launched in 2019, Hula was intended to focalize the creative energies of the local tech community in a physical location (with views of the Adirondacks and easy access to the Green Mountains) as well as provide a venture capital fund for Vermont-based startups. The timing couldn’t have been better, with the 14-acre campus opening its doors just as the pandemic hit. 

“Twenty-six percent of our 1,400 members have moved to Burlington since 2020,” Lair says. “People are realizing they don’t have to be in San Francisco.”

Not all of Burlington’s startup money is coming from VCs. Morin says a turning point for northern Vermont came when a pair of local companies — Ben & Jerry’s and Green Mountain Coffee Roasters — were acquired by multinational corporations. “This wasn’t something you would think of as technology-related, but lots of people got payouts,” says Morin. “Capital started being put to work. People started investing and starting their own companies.”

That kind of layeredness is what separates the premier small economies, according to Policom, a research firm that analyzes local and state economies. Last year, Policom, which publishes an oft-cited national ranking, rated Bozeman the strongest micropolitan area in the country for the sixth year in a row, calling it “large enough to provide a workforce to support an array of different primary industries.”

Coworking space inside Hula’s Burlington campus.

For Better, Or Worse

Of course, money has changed both Burlington and Bozeman, making both increasingly unaffordable for the very people they would like to continue attracting. 

“The biggest challenge in Bozeman is housing,” says Orvidas. Bozeman’s median listed home price is currently $849,000, according to Realtor.com.

“Bozeman is on the verge of losing its mojo,” says Marchi. “It used to be a cowboy town.” Now its nickname in the rest of the state is “Boz Angeles,” she says.

Still, both towns retain the ultimate prerequisite for future growth and the element that ignited their booms: quality of life, even if it comes with more glitz than ever. Neither town was exactly a stranger to glitz in the past.

“Why was [the IBM plant] here?” asks Morin. “Because [IBM President] Thomas Watson Jr. liked to ski at Stowe,” New England’s most exclusive ski resort, which sits on the horizon 30 miles away. For its part, Bozeman’s economy has been helped enormously in recent years by the success of the Yellowstone Club, a resort with a private ski mountain known for its billionaire clientele.  

But Bozeman still has Bridger Bowl, a ski resort actually owned by a nonprofit, and northern Vermont still has Mad River Glen, a member-owned ski cooperative popular with non-billionaires, including Burlington’s many tech workers. Both were recently included on a list of “4 World-Class Ski Resorts That Don’t Cost a Fortune” by the Wall Street Journal.

Burlington is still “a university town,” according to Lair. And according to Orvidas, Bozeman is a small community where she can get access to decision makers. “I know that I can get a meeting with the dean who runs the MSU school of computing and build a relationship,” she says. 

“The fundamental thing that makes Burlington special, unlike New York, Boston or California,” says Morin, “is that I can literally pick up the phone and ask to have coffee with somebody, whether it’s a Google executive who lives here or whoever. I’m not saying they will give you money, of course, but you can have conversations and get direction, which doesn’t happen anywhere else in the world I’ve experienced.”

Will that sense of community survive success?

Beta Technologies’ solar-powered charging station is made out of shipping containers.

Beta Technologies Recharge Pad

The current darling of Vermont’s tech scene is electric aviation company Beta Technologies, headquartered at Burlington International Airport. 

Despite the ailing global economy and a sense of stagnation in much of the national tech scene, hundreds of millions of dollars are pouring into Beta, as it attempts to pivot from development to manufacturing of its battery-powered airplanes. Soon, these will be built in a giant new facility rising across from the passenger terminal where passengers with their hockey sticks and cross-country skis deplane. 

Beta has a chic product and blue-chip backers, but its best asset might be a sense of identity and purpose drawn from local values. The company has been offered a fortune to relocate but has refused. Its success can be traced to being from, of and in Burlington in any number of ways, such as the region’s fierce commitment to alternative energy. If that success continues, it will have to wrestle with further changes to Burlington. For now, though, it’s in the sweet spot.

Ben Ryder Howe is a New York Times contributor and former senior editor of the Paris Review.

The ALIA electric vertical aircraft by Beta Technologies

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