The Denver startup community is nearing a tipping point

If you were looking for a convenient, if over-simplified, symbol of Denver, you could do worse than its Union Station.

Its age might surprise you — first built in 1880 — and yet inside it’s newer and changing more than you might expect. You can say the same about Denver’s startup community, a network of technologists, entrepreneurs and the people who serve them in a bid to bolster the Mile High City’s future.

“For 200 years, people have been coming here to carve their way,” said Chuck Sullivan, a Denver native and founder of Something Independent, a digital media and events group focused on the Colorado entrepreneurship community.

He was one of 40 Denver leaders brought together last Wednesday by Technical.ly and Comcast NBCUniversal to hear and discuss what was distinct about the city’s startup climate of today. The stakeholder luncheon was followed in the evening by the next stop on the Tomorrow Tour, a multi-city event series we’re organizing to explore how emerging entrepreneurship communities are similar and different. More than 100 came out to the evening evening at the Commons on Champa, an incubator space backed by a public-private partnership focused on downtown Denver’s development.

With 600,000 people and a shiny skyline, Denver is Colorado’s biggest city. It has an established and long-held business community, but Denver’s role in the state’s latest web and tech entrepreneurship wave is one of underdog. Denver is still something like part of the go-to-market strategy for startups that outgrow Boulder, the 97,000-person neighbor a half-hour to the northwest. Boulder is known for its heavy collegiate and creative-class influence only surpassed by its outsized founder culture. Throw in investor Brad Feld, Techstars and the Boomtown accelerator and you get why the smaller city has long outshone Colorado’s capital city.

“In the last three years, Denver has caught up,” Peter Adams of the Rockies Venture Club told Technical.ly. More than half of the state’s venture capital deals got done in Denver last year, including a massive $45 million round by Welltok to aid an acquisition for growth.

“You come for access to talent,” said Ben Deda, the muscly and clean-cut COO of Galvanize, a proudly homegrown tech education and coworking offering in Denver, Boulder, San Francisco and expanding to Austin. Count Techstars alumni like FullContact and SendGrid in that number, both of which moved to Denver after graduating.

“Really it’s a Colorado story,” said Yancey Spruill, the even-tempered East Coast-native CFO of SendGrid, which is eying an initial public offering in 2017, he said.

https://twitter.com/KarenCPMRCSP/status/695073766838296578

Ask enough Colorado founders and startup advocates, and you’ll sense there’s truth to that state pride. Don’t read too much into the Denver-Boulder teasing, many say. Denverites refer in jest to “the People’s Republic of Boulder, a few square miles surrounded by reality,” said native and Checkmate Ads founder Gareth da Cunha, a playful dig both at its size and its liberal politics. For all the jockeying between Denver and Boulder, there is a clear statewide identity, most say.

That’s something harder to find in the denser, more populous and fractured East Coast states. Yet the startup community there appears to get density too.

In this strange reversal, Boulder, the tinier city is perceived as the more expensive hub, meaning outflow to Denver. It’s one reason that transit access between the two is so often discussed — train access to the airport, too, is a frequent mention, as any $45 Lyft or $70 taxi ride might tell you.

Denver has added more than 1 million square feet in shared office space in the last five years, said Erik Mitisek, the deeply connected CEO of the Colorado Technology Association. Much of it has come in the walkable neighborhoods of Denver, though it has ranged from the more suburban Innovation Pavilion that opened in 2011 to more recent launches like the Commons and news that WeWork would open in Denver — General Assembly, too.

Denver has added 1M square feet in shared office space in the last five years: @ErikMitisek #TMRWTour16 pic.twitter.com/U9ow9Wlx9Z

— Technical.ly Philly (@TechnicallyPHL) February 3, 2016

Dish Network announced last week that it will open an office in downtown Denver near Union Station with plans to hire 100 new developers — a move mirrored last year by San Francisco-based solar installer SunRun. In the fall, healthcare service giant DaVita announced plans to nearly double its downtown offices, and earlier last year cable company Liberty Media, real estate firm Prologis and Comcast, which has 8,000 employees in the state, all relocated major offices downtown to attract talent.

It’s part of a major clustering that is bringing new wealth alongside others who are still struggling.

Because not only are the big businesses looking downtown, but startups are clustering too. When encompassing the Denver-Boulder corridor, you see something vibrant happening. Consider the following:

• Comcast bought digital ad company This Technology and integrated its team in Comcast’s downtown offices in August 2015, as the Denver Post reported.
• Uber bought a division of Microsoft’s Bing maps, which had offices in Boulder, in June 2015, as the Denver Post reported.
• New York software giant CA purchased a publicly-traded B-Corp, Rally Software, for $480 million in May 2015. Rally had 280 employees split between Denver and Boulder, the Denver Post reported.
• Amazon acquired 2lemetry, a Denver startup that manages connected devices, for an undisclosed sum in March 2015, as reported by TechCrunch.
• IBM acquired 18-person, Denver-based AlchemyAPI for an undisclosed sum in March 2015, as the Denver Post reported.
• Oracle bought Datalogix, a 450-person adtech company based in suburban Westminster, for an undisclosed sum in December 2014, as the Denver Post reported.
• Twitter bought Boulder’s 85-person analytics startup Gnip in April 2014, as the Denver Post reported.

“The list of exits matter most,” said Deda of Galvanize. That’s how angel investors, new founders and major offices are established.

Denver is the ultimate entrepreneur community – progressive environment fostered by local government #TMRWTOUR16 pic.twitter.com/su9jKUhDd7

— Downtown Denver Partnership (@DowntownDenver) February 4, 2016

Those companies vary in their focus, from analytics and machine learning and geolocation, the kind of of diverse array you might find in any maturing modern tech-business ecosystem. So what is Denver’s “fingerprint,” as da Cunha put it, on the rapidly maturing hands of a nationwide entrepreneurship boom?

Denver’s early IT sector developed out of telecom, government security and a unicorn or two. Celebrations of Denver’s millennial boom and ensuing entrepreneurship boom all come with requisite mentions of the city’s outdoor lifestyle, with its few hour drive to rich skiing and closer still to hiking and rock climbing. Josh Swihart, the cofounder of Aventeer and the CEO of Aspenware, joked that some of his team might get snowed in their homes on workdays yet be able to make it out to ski.

That fits neatly with ideas that Denver is a strong hub for digital health and fitness startups — more than 125 of them are in Denver, many of which may take space at the forthcoming Catalyst Health-Tech Innovation space.

"A great tomato is just a great tomato sometimes-you don't always have to dress it up." @somethingindpnt #TMRWTOUR16

— ljs (@ljschwabtx) February 3, 2016

But there’s no need to a force a distinction if it isn’t necessary, said Sullivan of Something Independent. “Sometimes a great tomato is just a great tomato,” he said.

Today more new residents are coming to Denver for its urbanity, not the mountains anyway, said Tami Door, the CEO of the Downtown Denver Partnership, which operates the Commons. That’s according to survey data, she said. She’s an economic development veteran, 10 years at Downtown Denver after nearly that long leading the Detroit Regional Chamber of Commerce. She chuckles at the special hype around startups: “We had those in the 1980s, too. We just didn’t have the cute branding.”

It’s always been about business growth, she said, not just today. And Denver is excelling.

In periods of rapid change, you see regional distinctions and specialities develop, said young founder da Cunha, a Denver native who has also spent time in Iowa. Then things get homogenized as efficiencies are shared. The mobility and self-selection of workers today may reinforce those distinctions — a chance at maintaining regional specialties, he said.

“Denver does big things together well,” said Richard Lewis, the founder of RTL and former chair of the Colorado Black Chamber of Commerce. He cited how supportive the community is for new launches. So forget the weed jokes, said Downtown Denver’s Kate Barton of the state’s marijuana legalization, “we work as hard as any business community.”

So Denver may develop its regional differentiation, but the community is as proud of the width of its tech business sector as its depth.

What you will hear again and again is that state’s rural pioneering spirit of camaraderie remains.

#TMRWTOUR16, if it's innovation & CO that interests, you're talking 2 the right person Anna Ewing of @COIN_Colorado pic.twitter.com/MaVIecBf88

— The Wright (@TheWrightColo) February 3, 2016

Anna Ewing, the new director of the Colorado Innovation Network, can rattle off the state-backed initiatives to support that broad support — the Advanced Industries Accelerator Act of 2013, the Colorado Venture Capital Authority, the Colorado Business Intelligence Center and more.

“We all say it,” said Ewing, “but that collaborative spirit really is a hallmark here.”