Unicorn companies, Silicon Slopes, and high-tech mecca — all phrases that have investors turning their heads in recent years to look at Utah’s entrepreneur potential.
Utah was ranked No. 1 in innovation and entrepreneurship and No. 2 in high-tech performance by the U.S. Chamber of Commerce this year, and it has also recently landed the number one spot on CNBC’s America’s Top States for Business.
This attention may seem unexpected, but the Beehive State has a history with successful tech companies such as WordPerfect, a word processing application created in 1979 by two BYU alumni: graduate student Bruce Bastian and computer science professor Alan Ashton.
Utah is now home to several “unicorn” companies, or companies that are worth $1 billion on paper. Businesses such as Domo, Vivint Smart Homes, Qualtrics, Pluralsight and InsideSales, started in the 1990s and have become notable unicorn companies.
In the 2000s, more companies headquartered in Utah cropped up, creating a series of tech companies dotting the Wasatch range between Davis and Utah counties. The corridor earned the moniker Silicon Slopes, a reference to its startup culture that is similar to that of California’s Silicon Valley.
Today, there are 4,388 technology companies in Utah that employ more than 53,000 Utahns. According to siliconslopes.com, these companies employ 8.6 percent of the state’s workforce and provide 14.3 percent of Utah’s payroll.
Several factors have scored Utah the number one spot in tech employment growth in the western region. Utah stands at a 6.69 percent combined tax rate. This is a welcoming statistic for start-ups who want a financially promising start.
Siliconslopes.com also stated that cheap real estate might be a deciding factor for companies who choose to plant their feet on Utah soil. For example, a $400,000 home in Utah can buy 2,898 square feet compared to 518 square feet in San Francisco.
Aside from its financially-friendly characteristics, Utah is also home to prestigious universities that produce a surplus of engineering and technology talent — including BYU.
The BYU Information Technology (IT) program was the the first university in the nation to become an accredited IT program in 2008, and since then has been recognized as one of the top programs in the nation due to its participation in the Special Interest Group for Information Technology Education, or SIGITE, conferences.
Overall, Utah has a strong emphasis on education, and Gov. Gary Herbert has put particular importance on the tech-friendly agenda in recent years.
In 2015, state legislators approved legislation providing the Utah Science Technology and Research Governing Authority with $18.5 million to support research teams at Utah State University and the University of Utah, and an additional $2.54 million to support technology outreach and innovation.
Gary Lunt, a technology entrepreneur and one of the founders of the BYU IT program said most of the students from BYU’s IT program use their technical skills to contribute to established companies, but about 10 percent of them will go on to start their own companies.
“To be successful in that, they need to take risks, have strong technical skills, and want to be an entrepreneur, which means they have to be their own boss and learn how to run a business . . . something we don’t teach in the IT department,” Lunt said.
Lunt said other states have strong talent, too, but that Utah has fostered a positive environment for entrepreneurs and businesses by providing incubation centers where entrepreneurs can work together and reduce their start-up costs.
One such incubation center is The Startup Building in Provo, which offers offices, co-working spaces, conference room, and an event space to help start-ups get on their feet and collaborate with other entrepreneurs.
Manager at The Startup Building Anders Taylor said the physical closeness provided in one space is a great way for entrepreneurs to network with other business entities and gain valuable collaboration.
Taylor also said a newer thought process in the start-up world, called the Lean Start-up model, contributes to the success of some entrepreneurs who visit The Startup Building.
“Instead of going out to find money to fund your idea, you spend time validating that your idea is a good one by doing customer interviews, researching the market, knowing who your competitors are . . . it’s an academic way to making sure that you will have the best chance of success,” Taylor said.
That’s not always an easy thing to do. For many aspiring entrepreneurs, the hardest part of getting started is finding the time, Taylor said.
“If start-ups seek out good mentors who know about the start-up world, and follow good methods like the Lean Start-up method, they won’t spend a lot of time and money on a bad idea,” Taylor said.
In general, Taylor explained a supportive start-up community is crucial for beginning businesses, and Utah has proven to be a good home for growth in both technology and the entrepreneurship now, and hopefully in the years to come.