Collaboration in Portland’s tech sector is tested as more companies arrive from the Bay Area.
There is a row of big white desks in a long office in Beaverton. A bold green logo has just been hung on the wall at the entrance. One employee sits at the far end of the room, wearing headphones and a plaid shirt; the other desks are empty and the airy, open space is nearly silent other than the tapping of his keys.
It is cloudy out, but when the sun returns to Portland this summer, all of the desks will face a brightly lit courtyard, and if the coronavirus pandemic subsides, they will all be filled.
Shavita and Sudhir Bhatti launched GrowthPlug in San Jose, California, in 2016. Shavita came up with the idea after visiting her Silicon Valley dentist, who was struggling with various components of office management. She founded GrowthPlug to fill a technology gap for medical offices, with tools to help practitioners and office managers optimize the patient experience.
The couple, originally from India, lived in California for eight years and both say they loved it there. But when it came time for GrowthPlug to really grow, the prospect of hiring in Silicon Valley presented challenges.
“We could have done it,” says Sudhir. “But to keep the profitability of the company, it would be very difficult. Attracting the right talent in Silicon Valley is hyper competitive.”
Combine that with the highest cost of living in the country (which continues to rise), and young tech startups are presented with a daunting ecosystem in which to grow.
They began to consider more affordable locations. Inc.’s list of “The 50 Best U.S. Cities for Starting a Business in 2020” brought Portland to the Bhattis’ attention at number 15. The promise of a vibrant tech scene with much cheaper housing was attractive, even if it lagged behind cities like Boston, Seattle, Nashville and Miami in terms of venture capital and the size of its technology talent pool.
The couple officially moved their lives and their business to greater Portland in January, opening the new GrowthPlug headquarters in Beaverton, where they plan to hire 25 new employees by the end of the year.
GrowthPlug founders Shavita and Sudhir Bhatti. Credit: GrowthPlug
They will join a wave of tech startups — including Genentech, Coinbase and 10net — that have chosen Portland for expansion or relocation in recent years.
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The Bhattis and fellow tech-preneurs enjoy lower overhead with more room for risks and mistakes in greater Portland. The GrowthPlug office in Beaverton costs about half of what they were paying per square foot in San Jose. And while they now live 700 miles north of the technology hub that continues to churn out millionaires and billionaires, Portland is a place where they can see themselves living for a long time.
It seems Portland is proving that not everyone in tech is looking to burn and churn through money in a manner that makes life unsustainable for so many in Silicon Valley. There is a more modest and practical form of success to aspire to in the Silicon Forest, and it is supported by a community that is determined to keep it that way.
There is a lot to love about living in Portland. The city’s proximity to outdoor adventures, an abundance of craft beer and a dedication to sustainability draw a steady stream of newcomers. The Bhattis considered all of those place-based perks of Stumptown, but it was an individual who finally convinced them this was the right move.
Nitin Rai, the founder and managing partner of Elevate Capital, is also originally from India and spent time living in Silicon Valley. He moved to Portland 30 years ago to work for Mentor Graphics in Beaverton. It was at that job where he first encountered racial bias.
Nitin Rai, managing partner of Elevate Capital. Photo: Jason E. Kaplan
“I was given every reason in the world for why I couldn’t move up in the company,” he says. “It was a great experience, but I was constantly hitting that glass ceiling.”
Rai left Mentor Graphics to launch his own business, First InSight, in 1994. Today his work at Elevate Capital allows him to support minority groups that might be overlooked by traditional startup funding, not just through investment but also in making them feel welcomed and supported in Portland’s tech community.
The Inclusive Fund at Elevate Capital invests exclusively in women-, minority- and veteran-founded startups. GrowthPlug is now one of them.
Skip Newberry, president and CEO of the Technology Association of Oregon, was another supportive figure in welcoming the Bhattis and GrowthPlug to Portland. Newberry first entered Portland’s tech scene back when it was not considered a “hub” at all.
Between 2008 and 2011, Newberry served as the economic policy advisor to former Portland Mayor Sam Adams, where he led the creation of the economic development strategy for software in Portland.
Skip Newberry, president and CEO of Technology Association of Oregon. Photo: Jason E. Kaplan
Newberry notes that it is rare to see the public sector taking a leading role in collaboration with the tech community; it was an early recognition of the economic potential for tech in Portland, along with a willingness to collaborate between the public and private spheres, that set the stage for a supportive and collaborative ecosystem in Portland.
“[Adams] was kind of a catalyst in bringing people together around common economic challenges related to tech,” says Newberry.
That permeable relationship between local government and tech has fostered a community of people who value the city as a place to live — and a place to stay — not simply a launching pad for opportunities elsewhere. Newberry says Portland also tends to attract civic-minded individuals: “People say everyone is an armchair urban planner in Portland.”
And that means not only loving the city for what it is and fighting to keep the good parts, but also recognizing the weaknesses and addressing the opportunities for improvement.
Silicon Valley has attracted increasingly bad press and backlash for its unaffordability, along with toxic work environments, misogyny and racism. In “Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us,” Dan Lyons explores how the work culture and management style of Silicon Valley makes workers miserable.
In an interview with the University of Pennsylvania, he cites “technology products themselves,” along with poor business practices in Silicon Valley, for making so many people in the tech industry miserable.
“It’s a very transactional culture,” says Newberry of Silicon Valley. Whereas “Oregon’s tech community is collaborative and more relationship-based — which is owing in part to its size. There’s a genuine desire here to lift all boats because we haven’t yet ‘arrived’ as an established tech hub.”
Not everyone agrees that Portland’s size makes it more welcoming. Rai sees minority- and women-founded companies facing some of the same challenges he faced back in the ‘90s, which motivates him to focus on that work.
“Those gaps remain, even to this day, in terms of how investors write checks,” says Rai.
Portland has its own problems. A lack of diversity and historically racist housing policies have created pervasive segregation. Years of swift population growth have caused gentrification and widespread unease around the potential for Portland to become the next San Francisco (i.e., extremely unaffordable).
While Portland is still much cheaper than Silicon Valley, rents increased by more than 10% between 2015 and 2016. They leveled out for a while, but today they continue to increase.
“We have an awareness and a sense of urgency that there’s change that needs to happen here,” says Newberry. He sees growth in Portland’s tech sector not as something to contain, but as an opportunity for greater diversity and economic opportunity, as long as it is done responsibly.
“We can’t think about these issues in a way that’s zero sum; for example, where we have to stifle growth in order to solve congestion. Because then we’re cutting ourselves off at the knees.”
The criticism that Portland lacks venture capital might persist, but Newberry says that conversation has shifted. “It’s no longer that we don’t have capital; it’s that certain founders are having trouble getting access to that capital.”
And therein lies an opportunity for more diversity, equity and inclusion, which Newberry says Portland tech is leading the way on. “Anyone who is interested in tech in Oregon,” from K-12 to adults considering career changes, “we should be giving them every opportunity to do so.”
He says that right now, when minority founders or tech workers arrive in Portland, they may not see a lot of diversity. But they hopefully see efforts and opportunities to be a part of changing that. “We’re still defining ourselves,” he says. “And that’s very exciting.”
Rai agrees that there is still a lot of work to be done. “At the end of the day, Portland is a very white city. Certain people want to tout that they’re [employing] 46% women and people of color. Then you look into it. There’s a lot of lip service. More women are getting funded. But where are the people of color?”
TechTown, a coalition of tech companies in Portland, was established in 2013 with the objective of attracting more tech talent. In 2015 they created the “TechTown: Diversity Pledge,” asking Portland companies to come together “around a movement” to “cultivate a diverse, homegrown-talent pipeline and inclusive work environment.”
TechTown’s programming around the Diversity Pledge includes morning sessions and quarterly CEO roundtables to bring tech leaders together for training, discussion and evaluation of progress around increasing diversity, equity and inclusion.
But results from the 2018 Diversity Pledge Survey show that “few gains were made over the past year,” highlighting concerns over employee retention. Progress was made in hiring more applicants who were women and people of color, but those groups were still more likely to leave due to negative experiences in the workplace.
“Women (13%) were more than twice as likely as men (5%) and people of color (15%) more than twice as likely as white people (7%) to have considered leaving their company due to treatment based on their identity,” writes Shawn Uhlman for Prosper Portland.
It is not just young tech startups making the move to Portland. Big players in the tech industry are increasingly setting up shop and expanding their footprint here too.
Apple will soon expand its Portland presence with a new office in the Central Eastside and 30 open positions in Portland listed on their jobs site. Square recently leased 64,000 square feet of a downtown office building. Last year Amazon introduced 400 new Portland jobs and a new downtown office.
The household names are attracted by the same Portland-y things that draw tech startups: primarily affordability and a lifestyle that feels a little slower-paced and less cutthroat than Silicon Valley (or San Francisco).
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I asked Newberry if he thinks these bigger companies embody the same commitment to community that is being fostered at smaller tech companies.
Newberry sees big tech in Portland as an opportunity for the community here to reach even further and have a positive impact on a national or even global scale.
“There are so many examples of companies that have set up offices here, where those offices have quickly become a reflection of the local community,” says Newberry. The city also benefits from bigger corporate initiatives.
Salesforce, for example, brought their 1-1-1 model of integrated philanthropy to Portland when they arrived in 2012, through which the company contributes “1 percent of equity, 1 percent of employee time and 1 percent of product back into its communities.”
“They’ve since become one of the city’s largest partners in volunteerism through their employees,” he says.
Across big tech and startups, Angela Jackson, managing director of the Portland Seed Fund, an early-stage venture capital fund, says the city’s community remains its greatest strength.
“The joke is that someone comes to Portland and tries to set up 10 coffee [meetings], thinking they’ll get three,” Jackson explains. “But all 10 respond and then introduce [that person] to three more people each.”
She thinks tech-preneurs, founders and employees across the industry are willing to work on making Portland a more diverse place that continues to grow responsibly, but they have to be given the opportunities to do that. The challenge is “they’re so heads-down on their companies. But when invited into the process and given an avenue for their voice, they do come and participate, and they do care.”
Jackson started the Portland Seed Fund back in 2010, and she says she never expected Portland to become the tech hub it is now.
“We would go to Silicon Valley and try to interest somebody in a single conversation about Portland,” she recalls. “There was a real disinterest in funds and entrepreneurs coming to Portland.”
But things have changed, which requires a new kind of effort on the part of everyone in Portland’s tech community. “Now it’s as much about being able to be honest about what are the pros and the cons when an empowered talent pool arrives in volume.
There are cost-of-living issues to consider, there are diversity issues to consider — all of which have a profound impact on our community.”
Despite the challenges of growth, Jackson thinks Portland is well equipped to make progress in the right direction.
“Our community is still our secret weapon,” she says. And for now, Portland’s limited venture capital and smaller applicant pool compared with Silicon Valley might be the strength that keeps that community together.
“Entrepreneurs who come to Portland to build a company, they come aware of the fact that we have capital restraints here. They come with their best energy and imagination, and an intent to produce something the world really needs in a way that’s smart.”
The Bhattis are now a part of that as they settle into their new office and conduct phone interviews to expand their Portland team and fill those empty desks — eventually. For now, they are working from home.
It is a strange and challenging time to be new in town, with COVID-19 forcing most companies to start working remotely and everyone feeling anxious about the economy and the future.
Prior to the proliferation of COVID-19, during their first month in Portland, GrowthPlug had its best month yet, signing six new dental practices in Hawaii.
“Despite the coronavirus situation, we still have a good number of applicants interested in exploring opportunities at GrowthPlug, and our hiring is moving along well,” says Sudhir.
Rai says he is fighting for all of his founders amid COVID-19 panic. This unprecedented moment is especially challenging for young and small businesses.
“This experience, when we come out of it, there will be some new norms,” says Rai. “And some new thinking around what is important. It is difficult to watch, but it doesn’t matter. You have to fight.”
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